

The Technology Behind the [Madoff] Scam - cwan
http://www.iddmagazine.com/issues/2009_42/the-technology-behind-the-scam-199529-1.html?partner=thestreet

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arohner
This article seems a little misplaced. They talk as if it was the technology
alone that allowed Madoff to scam, but the human factors were at least as
important.

[http://finances.unanimocracy.com/money/2009/01/07/harry-
mark...](http://finances.unanimocracy.com/money/2009/01/07/harry-markopolous-
markopolos-letter-to-the-sec-2005-against-madoff/)

Markopolous, a guy who didn't work at Madoff's company sent letters to the SEC
several times, was convinced Madoff's returns were a scam. Several other
financial firms on Wall Street didn't deal with Madoff either. They didn't
know what he was doing, but they were convinced it wasn't legal.

Markopolous's letter is so detailed about the different ways Madoff was lying
is proof that either 1) the SEC is incompetent or 2) the SEC was bribed to not
investigate him too hard.

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chasingsparks
Markopolous's letter was brilliant.

BTW. Take a lookat Madoff's current web page: <http://www.madoff.com/>

    
    
      Determined Claims: 2,875
      Allowed Claims:    1,564
      Denied Claims:     1,311
    
      Amount of Allowed Claims:               $4,443,335,043.32
      Amount of SIPC Coverage Committed:      $536,189,466.60
      Amount by Which Allowed Claims Exceed Statutory Limits of SIPC Protection: $3,907,145,576.7

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jbyers
There's really not much detail about the technology behind the scam in this
article.

Summary: intentionally proprietary and out-of-date software, oversized and
chaotic IT/IS department, AS/400, two disconnected trading systems, AS/400,
lots of printing, AS/400, fake split/strike trades managed in Excel, AS/400,
anyone who looked into the details would have smelled a rat, enough paper
evidence to tax even the substantial computing capacity of a mighty AS/400.

~~~
gaius
Even shorter summary: The AS/400 was created for good, but has been turned to
evil.

