Posted by David Post:
Would a Blog have Stopped Madoff?
http://volokh.com/archives/archive_2009_02_08-2009_02_14.shtml#1234103083
Here's a [1]nice little essay by Ray Pellechia, on the "official" NY
Stock Exchange blog, suggesting that Harry Markopolos, who had figured
out the Madoff scam a long time ago, would have been a lot more
effective had he blogged about what he found, instead of doing what he
actually did in 2005 (i.e., sending [2]a detailed, 19-page memo to the
SEC. Pellechia writes:
Certainly, any failure to convince others was not due to lack of
effort. Perhaps Mr. Markopolos lacked only an effective medium to
communicate his warning. Here's a thought experiment: What would
have happened if Mr. Markopolos had blogged his analysis? That is,
what if he had posted the entire piece on a blog, under his name or
a pseudonym?
We'll never know the answer, but here's what I think might have
followed:
�� The post would have quickly spread far and wide among traders
and investors. It's a small Street, as the saying goes, and an
analysis raising questions about the investment results of a
prominent name such as Madoff would have sent e-mails flying.
�� Those who had money invested with Mr. Madoff -- or who were
thinking of investing -- would have done the same math that Mr.
Markopolos had done, undoubtedly reaching the same conclusion. The
resulting rush to pull money out and the avoidance of adding new
money would have meant a faster end to the alleged Ponzi scheme.
References
1. http://exchanges.nyse.com/archives/2009/02/madoffblog.php
2. http://www.scribd.com/doc/9189285/Markopolos-Madoff-Complaint
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