Saturday, March 21, 2009
Madoff case is a distraction, albeit a huge one
News that confessed swindler Bernie Madoff has been ordered to stay in jail until his sentencing in June must be some solace for his many victims, but it should not be confused with the current turmoil in the economic system. Madoff, who pleaded guilty last week to running a massive Ponzi scheme that defrauded investors of billions (!) of dollars over 20 years, lost his appeal of a federal judge's decision to jail him immediately after his plea, according to the Reuters international news service. The former Nasdaq chairman had apparently hoped to be released on bail prior to sentencing on charges that probably mean the 70-year-old will die in prison. But a federal appeals court said he was a potential flight risk and could have secretly stashed money overseas. Madoff had been confined to his luxury Manhattan penthouse for three months after his arrest in December and seems to have been seeking to return until at least June. "The defendant has a residence abroad, and has had ample opportunity over a long period of time to secret substantial resources outside the country," the judges said. But Madoff's crimes, while devastating to his victims, simply do not approach the level of misconduct on Wall Street that led to the loss of trillions of dollars in investments and devastated the world economy. The wheeler-dealers who gamed the financial system with recklessly over-leveraged investments and the regulators who let them do it, sometimes knowingly, still must face legal reckoning.