Ponzi Paranoia Is Rattling ‘Madoffed’ Companies

[marmar]

Ponzi Paranoia Is Rattling ‘Madoffed’ Companies: Susan Antilla
Commentary by Susan Antilla


Feb. 20 (Bloomberg) -- Ever since the Big Kahuna of Ponzi schemers was arrested on Dec. 11, financial firms and publicly traded companies have been rushing to quantify just how “Madoffed” they are.

Happiest among those who map out their vulnerability to Madoff in press releases, letters to customers, and regulatory filings, of course, are those who have none. Flagstone Reinsurance Holdings Ltd. said Dec. 15 that “it has no exposure to funds managed” by Madoff, and that’s the cleanest sounding disclaimer you can get.

Saying you have no liability and actually having none, of course, isn’t always the same thing. In its December 2008 monthly report to investors, Stanford International Bank Ltd. said that it had “no direct or indirect exposure” to the Madoff virus. But it turns out it does. The Securities and Exchange Commission earlier this week accused Stanford of an $8 billion fraud, mentioning, among many allegations, that Stanford clients had money invested in the dreaded Madoff machine after all.

The Frontier Fund, a family of managed-futures funds, took the opportunity to tell investors that, not only did it not invest with Madoff, but it deserved credit because its operations were so different from those of the disgraced financier. “Important facts” that set Frontier apart from Madoff include regular filings with regulators, and its periodic reviews by the National Futures Association and Finra, the company said.

Of course, Madoff’s operation also underwent regulatory reviews, and we all know how that worked out. More important, Frontier boasts that it uses an auditor that people have actually heard of. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601039&sid=aSdHBvTvQqUk&refer=home

[KoKo]

1. Not only do funds not disclose Madoff but we now have "Stanford Investments"

where one doesn't know if they buy into a fund whether the fund was invested with Madoff or "Sir" Allen.

It's all a crap shoot.

[Supersedeas]

2. easy money