Madoff - the man who stole $65 billion by Erin Arvelund, published by Penguin

My choice of this book was partly for personal reasons; I have a morbid fascination with financial scandals and like reading about them. After reading the story my feelings were much the same as when I read about Enron; the more in depth study makes you realise that the superficial reporting in the newspapers hides the reality of personal tragedies caused by such large scale frauds. Maybe many of the investors were well off by many standards and should perhaps have realised that the high returns were too good to be true, but this does not alter the fact that this was a wicked fraud that ruined many lives.

My opinion of the book is that, while it is factually correct and full of detailed research, it is much less interesting than it should have been. This is partly presentational - the style is turgid and there is not a single picture and very few text breaks over nearly 300 pages - and partly because the author was perhaps too involved in the detail of the scandal. She had been saying that Madoff was a crook for nearly 10 years but nobody would listen and she has much evidence to confirm this. If she had been a journalist more recently on the scene looking for a story, it might have been an easier read. It compares poorly with, for instance, ‘The Smartest Guys in the Room’ which described the Enron story and read like a fast paced novel.

The other reason for the lack of excitement is that, apart from its sheer scale, this was not a particularly exciting story. Madoff conned people into giving him money by promising high returns; he spent most of it and then used new money to fund any cash payments that were needed. And he was such a good con man that the inevitable discovery took longer than it normally would have done. He had so many high profile contacts and trusting investors that everyone thought - ‘well if they trust him, he must be OK’.

The author describes in detail the large numbers of hangers on - family and business associates - who made extraordinary amounts of money out of the fraud, yet who seem to have got away scot free. Perhaps the only good thing you can say about Madoff is that he took the rap himself. She also reveals that the amount of money stolen is probably far less than is in the book title, because the amounts claimed include the many years’ fictitious returns that investors wrongly thought they were making.
Two other interesting insights emerge from the book; firstly that Madoff didn’t really need to do it; he was already making enormous profits from his legitimate brokerage business that would have satisfied even his elegant lifestyle. Secondly, that there was no point where he said - ‘I am going to commit a fraud’. As with many fraudsters and gamblers, it started when he found that he was not delivering the returns that he promised and he took in more money to cover the shortfalls.

But there is no way that any reader would feel sorry for this smooth con man; any danger of that is removed by the epilogue, which describes his sentencing hearing and some of the tragedies and traumas that have befallen those who moved from riches to rags overnight.