Madoff who?

So, let's join in for the hottest topic of the financial world at the moment, since everyone else is also doing it... I'm just merely following the flow....

Before this, I've not heard of Madoff, but he's now the talk of the world. What attracted me is the simplicity of the scam. It's just an old trick. U use principle investment fund from new 'clients' (or, more likely the victims) to pay as dividend to the existing investors. Am damn sure I could have tat idea too!! But something called logic and morale told me that's wrong.

Madoff's method apparently is known as pyramid fraud. It works well if the existing investors do not withdraw their funds. Tat's exactly who he's caught when he can't return the funds which supposedly he used to do investment.

I think I would admire his personality and character. One would need some pretty persuasive methods to convince the big and small fish. Seriously! I mean, he's allegedly accumulated US$50 billion and his 'victims' included gigantic financial firms too such as HSBC. Surely he must be very good at selling his product.

Having said that, I wonder how can big financial instituitions with 'experts' on board still make mistakes like this? Is it because they trust Madoff, based on his past performance? But I understand Madoff had closely guarded his ledger books. So, Madoff fabricated his financial papers for his fund? If people like him does that, what guarantee I have that other fund managers or even companies not doing the same thing? The financial reports that I read before I decided on my investment is not true?!

Is there any law and regulation in the financial world? I'm beginning to believe that the players of the financial market have their own set of rules, and the bend the rules whenever possible. After all, rules are made to be broken.

Dear investors, who do u place ur faith in? Perhaps keeping ur hard-earned cash under ur pillow is not such a bad idea after all.