Should Bernie Madoff's investors be bailed out? Should you reimburse them?

@ladyluna (7004)
United States
March 12, 2009 9:46am CST
Hello All, I just heard one of the "Madoff victims" on the news. Essentially, Mr. Shapiro is blaming the SEC for his having lost his life's fortune, and he wants to see the federal government step up and "help victims of Madoff". Below is the exact statement that Mr. Shapiro made on Fox News this morning. Mr. Shapiro's exact quote: "The SEC had an obligation to protect us. They didn't do it. Now I want to know where's the government? Where are they going to be held accountable to make the investors here who relied on the SEC to protect them -- uh, us. Where are they going to step forward and take actions that are going to help victims of Madoff?" What say you: Does it sound to you as though Mr. Shapiro is wrangling for a taxpayer bailout for the improprieties of Bernie Madoff and his possible co-conspirators? And, do you think that you should have to cough up taxpayer monies to compensate stock investors who CHOSE to invest with Bernie Madoff? Gee, doesn't every single prospectus warn the potential investor of the inherent risks associated with investing in the stock market??? Hold on to your hats folks, the media is giving these Madoff investors the bully pulpit to make their case that "everybody's complicit" (quote from bilked investor Ilene Kent). Another quote from Ilene Kent: "We are average Americans who put our trust and faith in the financial system, the judicial system, in the government... and they all let us down."
3 people like this
8 responses
• United States
12 Mar 09
No, Madoff's investors should not be bailed out. These folks let greed over-ride their common sense. I related once before how I attended a similar meeting held by a mini-Madoff. This guy only stole millions, not billions. I tried to warn the others the guy's scheme had to be illegal. Only 1 believed me and most thought I was crazy. The crook and I even got into a shouting match before I left the meeting early. Even still, people invested with this guy and lost money. I really suspect Madoff's investors were much the same kind of people only with more money. Greedy fools should take their lumps as a warning to others to be more careful and not believe in pie in the sky. Bailing out Madoff investors equals being an enabler for suckers and marks. We can spend our tax dollars on better things.
3 people like this
@ladyluna (7004)
• United States
12 Mar 09
Wow! I would have liked to have been in that room with ya', Red! Rarely do we have a prescient moment before we leap off the bridge of faith, and dive into stupidity. You gave those folks that rare gift. And, I'll bet that all you got in returen were a bunch of snide looks and hisses, huh?
1 person likes this
• United States
13 Mar 09
Well, these people mostly wanted to be rich bad enough that all the crook had to do was say I was wrong, misguided, and misinformed. They were eager to believe him and disount me. When I called our State's Attorney General's office they were eager for the info and did issue a warrant after an investigation. Unfortunately, the last I heard the crook in our story left the country with a few million and had not been caught that I have heard.
2 people like this
• United States
13 Mar 09
They were eager to believe him and discount me. Kinda reminds me of a certain recent election....
2 people like this
@roberten (3131)
• United States
13 Mar 09
ladyluna, I hate to sound like a hard-hearted person but those who invested with Madoff took a big risk and lost the gamble. If we follow the mindset that the government should have had better oversite, then this favorism should also be extended to those who have lost or/are losing their homes, cars, etc., etc. The government's position (along with many other individuals) is that those who took bad/risky loans that they couldn't afford should not be helped because they knew full well what could happen if things went south. Well I say the same applies here. Isn't it funny when the shoe is on the richer feet the crisis is more serious and needs more attention and bailout? What's good for the poor is just as good for the rich; and that's all I have to say about that.
@mswengel (95)
• United States
13 Mar 09
If they should be bailed out, then everyone who has ever fallen for a scam should be bailed out. My answer is NO. Look, I feel sorry for them. They were scammed for a LOT of money. But, frankly, hundreds of people are scammed every day. We simply can't afford to bail THEM out too when we're already bailing out the criminal federal reserve. In a perfect world I would say yes. Unfortunately, the world is not perfect and we can't do everything.
1 person likes this
@ladyluna (7004)
• United States
13 Mar 09
Welcome to MyLot MSwengel. I hope that you thoroughly enjoy our little community. I'd like to thank you for seemingly 'getting it'. And, if it's alright with you, I'd like to use your terrific 'take' on this issue as a launghing pad to make another point. Would that alright? These people aren't stupid, and they're not deserving of scourn because they HAD money to lose (that's called class envy). They took risks. The same risk that every investor (whether its the stock market, real estate market, commodities market, tangibles market) takes when they gamble. And hey, let's face it that what it really was/is -- a gamble. Every investment vehicle warns of the inherent risks. That written explanation of the investment specifics and warnings is called a prosectus. Some of the Madoff investors actually did do their due diligence -- they made investigatory calls to the SEC to see if any charges had been alleged against him, and he got a clean bill, similar to the kind of answer one would get if they asked the Better Business Bureau if any charges had been levied against 123ABC Corp. (example). Thus far, every respondent to this thread agrees that the Madoff investors shouldn't be 'bailed out'. I'm expounding here because I believe that if we're ever going to be able to grow from this experience, as a people, as a nation, then we need to understand the reasons why it is unacceptable to bail out "the few" just because they've been given national air time to plead their case. If the initial risk is evenly shared, and the dividend is proportionally distributed, then so too should the losses be proportionally realized. As to return to your fine point, Mswengel -- we simply can't bail out every one who has ever been taken for a ride. Nor should we. We cannot grow and actualize as Human Beings if we are always protected from the pain of our mistakes! While I agree that it stinks, our greatest learning opportunities are quite often our biggest mistakes.
1 person likes this
@Destiny007 (5820)
• United States
12 Mar 09
No, we shouldn't be bailing out these investors... or anyone else for that matter. Yes it does sound like he is wrangling for a bailout. Whatever happened to the idea that "You pays your money and you takes your chances"?... or "Let the buyer beware"?... or "If it sounds to good to be true then it probably is"?. The returns Madoff was promising and apparently getting were unrealistic and suspect. People suspected a problem and invested anyway, people were warned and the warnings ignored. All investments carry a risk, and I consider investing to be a form of gambling, because returns are not guaranteed. As in any other form of gambling, there is a strong possibility that you will lose your money. Never play with the rent money, and never gamble more than you can afford to lose. How hard is that to understand?
1 person likes this
@ladyluna (7004)
• United States
12 Mar 09
Not hard at all, my friend. Unless of course we live in an entitlement reality where people actually believe that they should never have to suffer the consequences of their own choices. Criminies, my husband and I have lost a significant portion of our retirement accounts. But, we're not asking for the taxpayer to make it right for us. And, neither are the rest of those Americans who've lost their shirts. If the known risks of investing in the market were too high for the 'Madoff victims', then they ought to have put their funds in Certificates of Deposits, or Municipal Bonds.
1 person likes this
@peavey (16479)
• United States
12 Mar 09
Oh, good grief. "We... put our trust in the financial system, the judicial system, in the government" ??? No, they didn't. They put their trust in Madoff. Doesn't he have an estate? Why can't HE pay them back... he's the one who got their money! I am disgusted by this whole thing. People are showing themselves to be greedy, spoiled wimps who can't think past their selfishness.
1 person likes this
@ladyluna (7004)
• United States
12 Mar 09
Hello Peavey, I'm disgusted as well. There is no way for the funds to be returned. Madoff's Ponzi Scheme worked exactly as the US Government's Social Security Ponzi Scheme works. The shell game is to take money from Peter to pay Paul. All the while hoping and praying that enough Peters will keep lining up to cough up the dough needed to keep paying the growing number of Pauls.
1 person likes this
@irishidid (8535)
• United States
12 Mar 09
No we shouldn't. Investing even in the best of circumstances is a risk. Start a trend like this and we'll be bailing out anyone who tanked in the stock market. Of course I feel sorry for these people, but this isn't on my head.
1 person likes this
@ladyluna (7004)
• United States
12 Mar 09
"Start a trend like this and we'll be bailing out anyone who tanked in the stock market." Exactly! The current projections are that approximately 40% of American adults have lost between 30% - 50% of their stock, bond, and mutual fund assets. Why are "Madoff victims" any different than any other investor who accepted the known risks as outlined in every prospectus? The only reason is because they can put a face to thief who robbed them blind. Everybody else has to just take their lumps and move on -- they don't even know who to direct their anger toward.
1 person likes this
• United States
12 Mar 09
I am sick and tired of the tax payers' dollars being used to pay for every screw up. The average Joe did not cause the problems so why should we be the people who have to foot the bill that the government needs to fix everything.
1 person likes this
@ladyluna (7004)
• United States
12 Mar 09
I'm sick of it too, Heather. Thanks for sharing!
1 person likes this
@deejean06 (1953)
• United States
12 Mar 09
I wholeheartedly disagree. I do feel badly for these people - especially the ones who had their retirement accounts with Madoff. However I don't think this should be the subject of another bailout! Those people chose to put their money in his care and trust him with their life savings if that's what it was. They put their trust in his company, not the financial system, the judicial system and the government - just his company. I have to assume that at some point they received "profits" from their investments. So they did get something but now they want to be compensated for it all? I disagree.
@ladyluna (7004)
• United States
12 Mar 09
Great points, Deejean. Thank you! While this is certainly sad, and has a terribly rippling effect on the economy as a whole, the fact remains that these investors are way out of line in thinking that they were uniquely free of responsibility when the handed over their money to Madoff and his lead-in hedgefund. Talk about carrying the "entitlement mentality" to the extreme.
1 person likes this