Lisa Gray

ContactLisa Gray has been a wealth writer since 2001. She has been involved in the wealth management industry since 1988. She is the author of two bestselling books—The New Family Office and Generational Wealth Management.
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graymatter Strategies LLC

Madoff Fooled Employees With Boastful Statements And Hubristic Retorts edit
Friday, March 23, 2012 09:54

Tags: fraud | madoff | securities fraud

When two computer programmer employees questioned why there was no record of stock trades, Bernard Madoff angrily told them to stop telling him how to run his business. He also said the trades were done overseas. The vehemence of the answer apparently stopped further inquiry… at least, at that point.

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Further explanation was that Madoff was acting as principal, not as agent, on the trades. The claim was that this allowed Madoff to back-date and reapportion trades into client accounts after the trades had been executed. If he had acted as agent, he would not have been able to do so. Further, Madoff needed the computer programmers to create false records to throw auditors off track. Boasting of big deals overseas gave credibility to trading activity and led the programmers to duplicate records they had been convinced had already been made.
 
As the programmers’ continued questioning his methods even to the point of advising him to get out of the business, Madoff would denigrate their positions as programmers, implying they were not sophisticated enough to understand what he was doing. He claimed his 40 years in the business trumped their computer prowess on a legacy-type system. The programmers were arrested along with other employees in 2009 and 2010. Their lawyers feel that the FBI has not fully disclosed its allegations against them. Without additional disclosure, the lawyers say it is difficult to understand the case against the programmers.

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