Madoff trail turns up inconvenient questions

16 December 2008

Investigations into Bernie Madoff's schemes have revealed certain glaring irregularities in the invesment operations.

For starters the auditors to Bernie Madoff's $50-billion exclusive fund were an unknown firm consisting of a 78-year-old retiree living in Florida, one accountant and a secretary.

Further, the team technically operated from a small office in north New York state, which fact, investigators say, should have sent alarm bells ringing in the minds of investors.

Most of the investors comprising individuals, charities and hedge funds had never met Madoff, yet were more than willing to hand over huge sums of money, thanks to the funds allure.

With investigation revealing more duped investors, questions about the secrecy of Madoff's operations and how such a fraud could have escaped the eyes of regulators are now being asked.

Madoff had registered his investment advisory business with the SEC in 2006, however it was not until now that the operations had come under the regulator's inspection. It is understood that reason for the inordinate delay lies in the sharp rise in the number of registerd advisers since 2001.