31 May, 2013

The Wizard of Lies: Bernie Madoff and the Death of Trust by Diana Henriques [Clare, Massey Library]

Bernie Madoff will go down in history as one of the most notorious fraudsters ever. During the global financial crisis of 2008, he was unmasked as the ringleader of a giant $50 billion Ponzi scheme. This is a system whereby someone takes your money to invest, but instead pays it out in interest to already established investors.

The book outlines his history. It tells how he started on Wall Street and then got himself into the situation where he had to lie to people and cover up what he was doing. He did have trusted employees who were hidden away on a inaccessible floor of his swanky New York offices. They were employed in making fictitious spreadsheets and records of non-existent financial transactions.

These were shown to regulatory authorities and those who became suspiscious of his never-ending success. But nobody investigated in depth.His giant subterfuge unravelled when the 2008 financial crisis meant that some of his clients needed their money out of his scheme, and of course there was not enough money available to comply.
I enjoyed this book as it revealed how easy it is to fool people most of the time. It gives an indepth look into how Wall Street operated and a background to the global financial crisis.It shows how gullible people were when they were told how good a return his scheme gave. Nobody really looked at how his system really worked, they were just happy to be making money. A real eye-opener.

Title: The Wizard of Lies: Bernie Madoff and the Death of Trust
Author: Diana B. Henriques
ISBN: 9780805091342
Published: 2011
Publisher: Times Books/Henry Holt

 - Clare, Massey Library

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