Was a broker for twenty or so years and early on in my career my assignment within the firm (one that handled ONLY managed accounts) was to examine each trader. I found it relatively easy since the scam artists at that time were sleeze balls with fake trading records. BUT I just don’t think anyone who didn’t do a painstaking look covering at least a year’s worth of trades and fills would doubt Bernie’s competence. I don’t think the fleeced should have known better, and “too good to be true” also stands for the Google offering, the near thirty year record of Exxon stock prices, splits, and earnings, Peter Lynch’s initial success over at Fidelity, Tudor Jones, and so on. Only a person with the connections like you, a person who had “day to day” contacts with the floor of the exchanges had a prayer of spotting this scheme. And a guy with a “Who’s Who” list of clients can’t be a crook, can he? However any regulator with literally unmatched power to comb through records at the exchanges, the accounting firm, and any and all phone records would have caught it within a week. The victims were preyed upon in large part by our faith that regulators would enforce regulations. Nobody at the SEC, CFTC, the Industry “Watchdogs,” and the press, offered proof that Bernie was doing people wrong. BTW, there is no way he picked up $50bln; many investors were paid off, many got redemptions, and not every trade went bad. I think this is like the drug bust where cops claim a $50mln street value for a haul that might be a mil or so at most just so the cops can justify their budget. Good piece. And always remember that the more clever the bad guy is presented to the public the less likely it is that said public will trash the enforcers.
