How Many Madoffs Are Lurking on Wall Street?

Bernard Madoff, the man who played the lead role in the American Wall Street massive fraud case, has been sentenced to 150 years in prison. This means that this chap will be spending the rest of his life behind bars. But even if Madoff does his time, it doesn’t return the more than $60 billion in losses that he caused through his Ponzi scheme. And what’s more important is that it is not possible that only one Madoff created this global financial disaster – how can it be possible that there could be only one Madoff involved? By only punishing him, it will be difficult to make amends with all the people of the world who have had more than their fill of this economic disaster, and it will be even harder to clear their accounts.

Wall Street is never lacking in a good scandal. Eight years before this current financial crisis, there was Enron. The difference is that this current financial crisis did not only smash to pieces the fragile extravagance of the Wall Street financial empire, but it also revealed the fatigue of the financial oversight system in America. On top of that, it caused the flood waters of the financial crisis to break loose and spread across the whole world. Madoff is certainly not the originator of this bad precedent, but rather just a symbolic figure in the development of this crisis. How could it be that only one Madoff could weave together his Ponzi scheme on such a massive scale on Wall Street for more than 20 years? Could it be that behind this man there are also some unseen forces working to manipulate things behind the scenes? Obviously one Madoff cannot be passed off as the scapegoat for this financial crisis. He needs to receive his punishment, but the rest of Wall Street also needs to receive theirs.

Up until now, except for one unfortunate Madoff, the financial elite on Wall Street have been kept free from trouble. This group of financial crocodiles are the same as Madoff. Their common belief is that “greed is good.” Is it possible that they could actually be pure and honest angels? Even President Obama could not help but reproach them as being “shameless.” Yet, because the Wall Street financial tsunami created a global financial crisis, and because the Madoff scandal is only one part of the Wall Street financial tsunami, the United States government has a responsibility to bring to light financial criminals like Madoff and uproot all evil in order to make amends with the whole world.

However, the Ponzi scheme that Madoff put together is not actually anything amazing. The game he was playing was nothing more than a pyramid scheme. He used money that was given to him by previous investors as bait to lure in new ones. From head to toe, Madoff has only been tearing down the east wall to mend the west wall and the process began to snowball. It is possible for this game of unarmed, backstabbing financial trickery to be widely adopted on Wall Street, and Madoff alone on the top of the pyramid would have no way to carry. Therefore, apart from the leading role played by Madoff and his close and trusted family members and followers, there must have been some participation by other important figures.

　　

A director of the Deloitte Touche Tohmatsu’s Auditing and Capital Market Advisory Department believes that there must be a big and powerful network working behind Madoff. This is because Madoff’s scam of 20 plus years has created thousands of false tax revenue records. Yet, the fact that this long term, massive scale fabrication has somehow gone unseen by the United States Internal Revenue Service has caused people’s suspicions to run wild. Furthermore, earlier on there was a report from the United States Securities and Exchange Commission that exposed the fraud, although that investigation was left unresolved, which led to President Obama rebuking them for being derelict of duty.

Some believe that all of this misfortune has happened because the system of American financial oversight is too fatigued. But one cannot exclude the fact that Madoff’s Ponzi scheme had a protection team made up of people from special interest groups. Don’t forget that Madoff was once chairman of the Nasdaq and an adviser to the SEC. With this type of situation, the scam that Madoff concocted can easily result in an atmosphere that resembles “The Emperor’s New Clothes.” Even if Madoff did pull off the fraudulent jugglery, there was still no one to take a stand and speak a word of truth on the matter. Even if these people are not working with Madoff as partners, they are still accomplices in this colossal fraud. As for the supervisors who were rebuked by President Obama as derelict and the financial institutions that were rebuked as being shameless, there should also be a thorough and sincere investigation into them so that those who are guilty can be punished accordingly and the public’s indignation can be appeased.

What is worthy of mention is that because of the pyramid scheme nature to Madoff’s fraud, some of the investors from earlier on who walked away with a major return on their money should also be regarded as accessories to the crime and should therefore be punished. Because it is only once these investors are well-versed in the ways of Madoff’s Ponzi scheme, cooperate with Madoff’s swindle and help expand the lower steps of the pyramid that they will be able to ensure that their own investments won’t incur a loss. It is only the Americans from the lower rungs of the scheme, the ones at the courts who accused Madoff with their tears of blood that deserve sympathy. As for the big time investors and the large-size banks, their losses do not deserve any sympathy – it would be more appropriate to investigate them to see what part they were playing in the swindle.

A large financial tsunami has smashed Madoff’s Ponzi scheme, but no one believes that he is the only crook on Wall Street. To continue encircling the other financial crocodiles that are still lurking beneath the surface will not only help rebuild Wall Street’s financial position, it will also strengthen the United States financial oversight system and help restore the world’s confidence in America.