Powers On… Why Bernie Madoff should be a powerful lesson to stock and crypto memecoin investors
May 11, 2021. Summarized by summa-bot.
Compression ratio: 29.4%. 2 min read.
Dogecoin may not be a criminal enterprise, but the rise of social media-boosted cryptocurrencies raises red flags for those who've been in the wars against crooked operators.
is a monthly opinion column from Marc Powers, who spent much of his 40-year legal career working with complex securities-related cases in the United States after a stint with the SEC.
At this point I had never heard of him, but in a matter of days, the whole world would come to learn of this evil misanthrope and his fictitious transactions, which would become the world’s largest individual financial fraud and Ponzi scheme.
As the national leader of my law firm’s Securities Litigation & SEC Regulatory Enforcement practice, and one with experience in representing victims of Ponzi schemes and internal investigations, I would be invited to participate with a small group of lawyers to meet with Irving Picard, who would become the SIPA court appointed Trustee overseeing the recovery efforts by the SIPC for those who had lost monies through the failed broker-dealer Madoff ran, Bernard L.
Madoff Investment Securities, Inc. Once Irving came on board to Baker Hostetler and was selected by the court to be the SIPA Trustee, our efforts expanded at times to over 250 attorneys throughout the law firm.
For over four years, I was a core member of the Trustee’s effort, and would lead our national efforts to investigate, develop theories of liability, and bring litigation against hedge funds here in the United States to recover the reported $65 billion lost.
My small team was personally responsible for obtaining the largest settlement to this day against a hedge fund, Tremont, and the second largest cash settlement against anyone, during my firm’s twelve years of recoveries — over $1 billion in cash.
The same can be said of a large number of Madoff’s individual victims, and even institutions, which failed to understand and question his trading strategies which purportedly (and astonishingly, on reflection) provided “profits” in both up and down markets.
Nowadays, we have groups of individuals buying stocks like GameStop, pushing its market cap from under a billion dollars to over $12 billion since the beginning of this year.
I suspect many who followed the crowd that pushed the stock price over $400 and briefly drove GameStop to a market cap of over $20 billion lost a great deal of money, as evidenced by the significant margin calls and liquidity issues the Robinhood exchange experienced during the most frenetic trading periods.