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Netflix’s new docuseries, MADOFF: The Monster of Wall Street, is excellent.
The five-part series chronicles the life, times, and most importantly, Ponzi scheme of perhaps the most notorious financial criminal in U.S. history. Using a combination of expert commentary, archival footage and dramatic reenactments, the show gives the reader a sense of being a Madoff employee in the iconic lipstick building in NYC, through the high times (when billions of dollars were sloshing around), the lowest times (when the fraud came to light), and every time in between.
We won’t go back over the Madoff story, which everyone in financial markets already knows. But we will offer five takeaways from the Netflix show:
- I used to believe Bernie’s wife Ruth and his two sons HAD to have known about the fraud. There was no way people so close to Bernie could remain ignorant of such a mammoth fraud, which went on for so long. But the docuseries really emphasized just how cunning and crafty Bernie Madoff was, and how strict he was about keeping the legitimate market making business, and the fraudulent “investment advisory” business two floors below, separate. So after watching the show, I think it’s at least plausible that Mark and Andrew Madoff, and perhaps even Ruth, didn’t know.
- The U.S. Securities and Exchange Commission looks even worse for missing the fraud, if that’s possible. Everybody knows the regulator whiffed big time, but I didn’t know the specifics, not only of the rank apathy toward whistleblower Harry Markopolos, but of the SEC’s two separate Madoff investigations. The second investigation, which involved more senior SEC staff, asked some of the right questions and came away with a follow-up plan that would have nailed Bernie, but the regulator inexplicably didn’t follow up.
- It was interesting to learn that Bernard L. Madoff Investment Securities, the legitimate market making business, at one point in the early/mid 2000s was in financial trouble, which Bernie addressed with a $700 million cash infusion from the Ponzi scheme. The squeeze was due to increased industry competition, a top-heavy firm with too many highly paid employees, and – quite possibly – too much advertising on Traders Magazine.
- There are some excellent narrators / commentators throughout the series, including long-time madoff secretary Eleanor Squillari, financial journalist Andrew Ross Sorkin, Markopolos himself, and several real-life people who had money “invested” with Madoff. But my favorite is Diana Henriques, author of Bernie bio Wizard of Lies and former New York Times reporter. Throughout the docuseries, nobody recounted what happened more authoritatively and interestingly than did Diana.
- Lastly, it was morbidly fascinating to learn how Bernie was able to brush off any questions from investors, yet still kept them invested. “I don’t have time for these questions, if you want we’ll give you your money back.” And almost everyone stayed.
Enjoy if you watch.