SEC probes new Ponzi schemes for more Madoffs in the making
With a completely straight face, a very nice fellow at a New Year’s Eve party told me his investment adviser was racking up 40 percent returns on his portfolio. The other guests audibly gasped and then asked if the adviser was Bernard Madoff’s younger brother?
In a year when the Dow Jones plunged to near record levels — losing 34 percent of its value in a single year — the lure of get-rich-quick schemes seem to have no end in sight for newly energized SEC regulators, according to Bloomberg News.
In “SEC Said to Examine More Ponzi Schemes After Madoff,” Bloomberg notes:
U.S. regulators working to untangle Bernard Madoff’s alleged $50 billion Ponzi scheme are probing other money managers suspected of using similar tactics, two people with knowledge of the inquiries said. The U.S. Securities and Exchange Commission is pursuing at least one case in which investors may have been cheated out of as much as $1 billion, according to a person who declined to name the manager and asked not to be identified because the probe isn’t public. Regulators may discover additional Ponzi arrangements as declining stock markets prompt investors to withdraw their cash and they question how their money is being managed.