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December 12, 2008

More Madoff Near-Misses: Barron's, MAR/Hedge, etc.

A Barron's story from 2001 is being forwarded everywhere today. In it, the publication came  close to nailing the Madoff story almost eight years ago. Here is a key paragraph:

Still, some on Wall Street remain skeptical about how Madoff achieves such stunning double-digit returns using options alone. The recent MAR Hedge report, for example, cited more than a dozen hedge fund professionals, including current and former Madoff traders, who questioned why no one had been able to duplicate Madoff's returns using this strategy. Likewise, three option strategists at major investment banks told Barron's they couldn't understand how Madoff churns out such numbers. Adds a former Madoff investor: "Anybody who's a seasoned hedge- fund investor knows the split-strike conversion is not the whole story. To take it at face value is a bit naïve."

More here, and the original MAR/Hedge story that seemingly sparked the Barron's piece is here.

And while I'm on the subject of Bernie Madoff near misses, an insider view from someone who did due diligence and walked years ago.

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