Three Ways To Ward Off The Next Madoff

Yesterday marked the five-year anniversary of Bernard Madoff’s sentencing to 150 years in prison. I am reminded yet again how vulnerable investors are at the hands of scam artists. Five years on, I’m afraid the regulatory environment has only emboldened the swindlers. The Securities and Exchange Commission, charged with protecting investors, is woefully underfunded. Whereas in 2006, the SEC could provide 19 examiners for every $1 trillion in investment advisors assets under management, last year there was enough funding for just 10 such examiners. And the investing world has become far more complicated. Guess who’s coming out ahead? In the last five years we’ve learned more about the depths of Madoff deceit and about his victims, many of whom still have not picked up the pieces. Among the hard-working teachers and small business owners, were also owners of sports franchises, a U.S. senator and scores of celebrities, people presumably experienced in the ways of Wall Street. They too didn’t spot the lies and bogus returns until it was too late. More on Forbes here.