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Laura Stein

Laura Stein

Posted: June 30, 2009 01:10 PM

Losing Bernie

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Instead of a sense of relief or satisfaction after learning Judge Chin gave Bernie Madoff the maximum sentence, this wiped-out investor is left feeling apprehensive. What now? Without Bernie to kick around, how will those he harmed get the media attention they need to pressure Congress?

Legislation is pending that would benefit victims who are being subjected to additional injury (see my previous post, Navigating Through Madoff-Land) as well as future potential victims, who imagine themselves invulnerable.

I've spent surprisingly little time since December 11, 2008, thinking about the man who caused my husband, me, and so many others such pain. Madoff is a criminal, done in by the recession, not the SEC, despite Harry Markopolos's persistent efforts. Madoff will now get his comeuppance behind prison walls, which leave no opportunity for photo ops like the inexhaustible clip of his pushing the cameraman.

Speculation about other perpetrators will get some attention if actions are brought. The paparazzi will stalk Ruth and find unflattering pictures to run. But Bernie was the media draw; his impressive skill caused the havoc and despair. Whatever help he got from his wife and sons, from Frank DiPascali and others in the firm, will be investigated and pursued, one hopes. But, really, other than a possible flurry of prurient interest if Ruth goes to jail, none of them offer the same chance for headlines.

Headlines are needed. See my aforementioned blog. My husband and I will not be affected by the most important issues detailed there. Despite having lost all our savings, we'll recoup as much as is possible given the way the deck has been stacked. It's not enough, or close to what is legally defensible, but it's something. Others are not so fortunate. We've yet to learn how the victims of Allen Stanford will be treated. It's the Wild West when it comes to financial fraud. No investor is safe.

Meanwhile, articles like Eric Konigsberg's in the New York Times, "Investors in a Competition For a Piece of the Madoff Pie", refer to "paper losses" that don't qualify for tax deductions. What's not mentioned is that the phantom money was real enough to pay taxes on, in many cases for decades. We did for 21 years. In addition, while some investors, like one quoted, are concerned about competition for what's likely to be a relatively miniscule restitution from the bankruptcy, far more in my position, who stand to "profit" from clawbacks, are on record as being sickened by the idea of monies sent back from unsuspecting investors.

I found it strange that my thoughts today, post-sentencing, have turned to how the residents of New Orleans feel facing another hurricane season. How much have we heard recently about the status of the levees? Are they safe? At first I didn't understand why I was so suddenly preoccupied by their plight and my ignorance about it. Then I saw the reason: if we've forgotten them...

Like victims of countless less publicized crimes, Bernard Madoff investors will be putting their lives back together for years to come. People are cheated, brutalized and murdered every day with far less attention paid to them than we have had. But few crimes have such broad implications. (Unless you consider those committed with the aid of a gun.) The chinks in our financial industry have been exposed. To what effect? Without Bernie as our lightening rod, I fear the storm will come with no corps of savvy engineers having done the needed work.