The other underreported aspect of this is the greed of many of the investors and their foolishness in placing their entire net worth with one investment firm. Just as the investments you make should be diversified to minimize market risk, the channels you invest through should have some diversity to protect against his kind of catastrophic loss. And when I say “greed” I mean to suggest the there was some irrational justification these folks were going through – thinking, I get this high rate of return and there is no risk trade off! There always is… What were they thinking? Was this huge market and this enormous investment community out there just somehow worse than Bernie at garnering returns? And were they just lucky to be in his fold? I don’t feel perfectly comfortable saying that people who are in distress have to accept some of the responsibility for the impact (particularly those who placed 100% of their net worth – or that of their parents with Madoff), but what is the alternative they are after? Taxpayers being asked to make them whole? I had never heard of Bernard Madoff until December 11th 2008. And I may even have missed the story until the following morning. Now that Bernard Madoff has received his criminal sentence – some of the victims who are speaking in the press are lifting the veil a bit on their intentions to assert some liability on the part of the SEC, which is another way of saying people who had nothing to do with this (taxpayer-farmers in Kansas, for example) should make them whole. The only thing worse than the financial devastation Madoff visited on these people would be to make the federal taxpayer (about 99% of whom never heard of Bernard Madoff, couldn’t gain admission to his country club or social circle) pay for it.

Rot in hell Bernie!