How do you persuade investors to pony up for a Ponzi scheme? Now, thanks to the marketing materials for a derivative based on the “Fairfield Sentry Fund Ltd,” which existed only to invest in Bernie Madoff’s capital-vaporization engine, we know.
The Fairfield Sentry Fund was a $7 billion fund-of-funds that invested in Bernie Madoff’s investment firm. The Fairfield Sentry “3X Leverage” version, meanwhile, is a derivative “certificate” based on the fund that borrowed $3 for every $1 invested–and, thereby, earned 3X the return (for a while). Both funds are presumably now worth zero.
The “3X Leverage” fund’s marketing brochure is embedded below. (Click “full-screen” icon in lower righthand corner of player to get a sumptuous bigger version. Return to post by hitting “ESC”):