Amber Partners, a London-based hedge fund certification business recently put out an interesting Amber Alert (comment) on Madoff.
Key points made were:
- Investors who invested directly with Madoff did not buy shares in an offshore company or partnership interests in an onshore limited partnership.
- It was extremely unusual for a firm of Madoff's size and supposed reputation to utilize an audit firm which was quite clearly not one of the "top 4" firms nor a specialist in auditing broker-dealers.
- Amber Partners has never known a broker that refuses to send trade tickets to clients, other than in hard copy form via the postal system.
- Madoff was infamous for not letting investors visit their offices to performan any on-site due diligence.
- Many who invested with Madoff recognized the risks involved. A logical counter argument to all of the above "red flags" was that there would have to be substantial collusion within Madoff for such a fraud to go undetected for such a long period, and there was also the fact of his continued regulation by SEC and FINRA.
If you want a copy of the release, please register at the NZARA website (www.nzara.org). Once website access has been granted you may find the document in the Library on the site. You could also register on the Amber Partners website at www.amberpartners.com for future alerts and announcements.