Madoff Interview contains unreported gem
Out of shear boredom, I read the SEC’s BernieMadoff interview posted at CNBC.
While the entire read is entertaining (from someone who did not have money invested with this thief), there is what I consider to be a gem in the bottom of page 11 and on to page 12, which I’ve copied below:
Madoff noted that the industry is growing incredibly complicated. He gave the
example of when his firm put up a credit default swap and didn’t know how to do the books. Madoff said he didn’t know, and it wasn’t in manuals, so he called (withheld) He said he didn’t know, but conferenced in another industry person, who told him to put it in his London office books. He said he called Merrill Lynch, Lehman Bros, five firms total, all of which didn’t know. He said the NASD had no clue. Madoff stated that today, lots of trades are done off the books because people don’t know what to do with them.
Wow! So that’s what is meant by off-book toxic assets!
PS: CNBC’s “version” of the story doesn’t even mention the portion above. Their story focuses on Madoff’s amazement at not being caught and his perceptions of the various SEC investigations and investigators.
Madoff: All SEC Did Before 2006 a ‘Waste of Time’
Newly released documents in the Bernard Madoff case paint a detailed picture of a feckless Securities and Exchange Commission, and an epic scam artist who was constantly amazed he did not get caught.
The documents, released Friday by the SEC following an August request by CNBC under the Freedom of Information Act, include thousands of pages of e-mails, transcripts and internal SEC documents compiled by Inspector General H. David Kotz in his investigation of the SEC’s handling of the case. Kotz issued a scathing report in September citing multiple lapses by the SEC in investigations dating back to 1992.
While Madoff’s Scam of the Century shocked the world, it appears Madoff was mainly shocked he got away with it so long, according to a jailhouse interview he gave to Kotz on June 17 as he awaited sentencing on 11 fraud counts. In the interview, Madoff says the fact that he did not get caught was “amazing to me.” Madoff was not under oath in the interview.
There’s Too big to Fail, and then there’s Too Complicated To Understand! <shaking my head>