Crybabies over losing money with Madoff
According to the Fox Business website:
"A Florida couple who claims Bernard Madoff wiped out almost all of their $1 million nest egg says the government needs to pay up for the SEC's failure to protect investors"
Look, it's sad that they lost their money with the crook but it is not the governments job to guarantee investments. If someone is so stupid that they never have heard of the word "diversification" before, then that is their fault. You would think that Madoffs clients would be knowledgeable people with a high level of sophistication.
Clearly Bernard Madoffs firm was not a mutual fund. Naturally, his firm solicited "sophisticated" investors or those with a certain level of knowledge or a certain amount of assets. I highly doubt he had clients with $2000 invested with his firm.
It makes me furious when people whine over losing money, even if it is their entire life savings. Have these people never heard the saying, "If it sounds too good to be true, it probably is." It sickens me when people believe the government should control all the finances of everyone or they feel the need to have the government approve every decision that they make investment wise. IT IS NOT THE TAXPAYER (I.E. GOVERNMENTS JOB TO APPROVE OR DISAPPROVE OF ANY PARTICULAR INVESTMENT. Face facts that not all fraud is uncovered. Sometimes criminals are much smarter than the bureaucrats who work for government.
Clearly these people got greedy and saw what good returns he was claiming to achieve and they fell for it. If the returns are consistantly good, a general rule is to not believe them. NOBODY achieves consistantly high returns year after year.
The reality is that the government is just not large enough to have individuals approving every citizens portfolio's, which is apparently what this couple wanted. You want to blame the government for not discovering his fraud sooner? Well, why shouldn't the government be forced to review every individuals portfolio to see whether they are invested in individual mutual funds and publicly traded stocks? Why shouldn't the government review peoples portfolios to verify whether they are diversified accross varuous sectors and industries and various mutual fund asset classes? Apparently people have this strong desire to be treated like incompetent boobs.
A better way would be for insurance companies to offer insurance to investors that the investors could purchase. Say you pay a one time fee of 5% of the total amount you invested in publicly traded stock or hedge funds. It would only cover you in cases of fraud but then you would recover you initial investment minus any stock sales or withdrawls you made along the way. So if they had $1 Million invested, they could pay a one time fee for insurance of $50,000 and maybe a small premium after the first year to be covered for any fraud that might take place.
That would solve everything wouldn't it. Yes, it might take two to four years to recover the insurance premium but then people couldn't bitch about the government not protecting them from the poor investments they make.
