CNN ran a Special Investigative Report on Madoff Secrets on the weekend of January 10/11 but failed to dig into the information technology (IT) part of the story. Admittedly, IT is boring but the scheme that Madoff admits to could not have been pulled off without major IT support from people working for Madoff or for a service-bureau that supported him. Some IT guys had to know.
Massachusetts Secretary of State Galvin, a PR-happy pol, is reportedly wading in with his own subpoena however, into a morass you would think a securities regulator would fear to tread. You would think, that if the SEC should have protected all investors, Galvin should have protected Massachusetts investors. But he doesn't seem to see it that way. Especially when there is a headline to be had.
In reality all Galvin can do is some weak-kneed administrative stuff (just like the SEC) but as a result he might be stumbling on the answers to the questions CNN did not ask.
Who wrote the programs that made up the fake trades? Who wrote the program that spit out the bogus statements? Who entered the data that must have changed every month? And on and on?
Who wrote the programs that made up the fake trades?
Who wrote the program that spit out the bogus statements?
Who entered the data that must have changed every month?
And on and on?
I am sure Galvin is more interested in the sales vs. service side of the equation; there is a lot of publicity up here about the Palm Beach Country Club guys with the MG. But while he's there, hopefully he'll ask the important questions that CNN failed to investigate.
-- Dennis Byron
(As an aside, as for the victims the TV people keep dragging up, I feel sorry for the millionaire widows and orphans interviewed but it is not correct to blame "the U.S. system." The entire U.S. financial system pushes people not to invest in one basket. Examples include FDIC insurance encouraging people to put savings in multiple banks, SIPC rules to use multiple brokers, and ESOP rules that encourage those over 50 (or maybe 55?) to diversify out of their employers' fund. I don't need Massachusettspols to tell me that. But that's not really the point of this blog.)
-- Dennis Byron