Unfortunately I know several people whose parents lost all or most of their money to Bernard Madoff. I was curious about what the statements looked like and hounded a friend to let me see one and post it to this blog. She agreed but after looking at it I changed my mind, besides you can see one embedded below. My friend's looked almost exactly the same: odd lots, Fidelity Spartan Fund, US T bills, blue chip stocks. The amounts were different but it is the same mix, and the trading days are the same since it is a statement from the same month. There was a computer and mailing system behind this too, so either Madoff or someone else punched in the fake positions.
I don't know why I expected it to look out of the ordinary, after all this man fooled regulators who even if they only gave a cursory look at his business must have seen these. True, it doesn't have some of the information and graphs that others I've seen have but would it cause you to blink? I doubt it. Especially if you were making money each month after being "let in" to the club.
Last night I learned another thing that would have quelled doubt if any had arisen, each trade was accompanied by a confirmation statement. So people got a reassuring blizzard of paper each month showing Madoff working hard, trading up a storm...so of course it was reasonable to think that year in and year out, profits were possible. How many of us really look at our confirms or statements that closely, in good times or in bad? (I'm speculating about the older investor who he fleeced and not the funds of funds or some people who I find it hard to believe didn't know better.) Madoff Trading Statement, November 2008
