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If Bernie Madoff has lost $50bn of other people’s money, as he is said to have admitted, why did they trust him with it?
With hindsight, the whole affair seems deeply implausible. We know that nobody produces rock-steady returns of 15 per cent or more, year in and year out, unless he or she is either a genius or a crook.
Yet people lined up to entrust their savings to Mr Madoff. Many of them got a tip from a friend or adviser about a Wall Street operator with a great record. The Madoff broker network also included many funds of funds and private banks that oozed financial sophistication.
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