There is still no evidence that Bernie Madoff’s sons, Mark and Andrew, knew about the fraud. Both did, however, interact with Frank DiPascali and other executives deeply involved in the asset management business. Both also had money invested with Madoff (a new detail).
Andrew apparently lost “several million” when the fraud collapsed. Mark, meanwhile, took all of his money out in 2000, eight years before the scheme collapsed. His spokesman would not tell the WSJ why he did so, and it will obviously be a question that he’d better have a persuasive answer for.
It is easy to assume that Mark and Andrew were complicit in the scheme. We would not be surprised to learn that they were, but we still think it’s possible that they were not.
The “red flags” that made it obvious to some experts that Madoff had to be doing something crooked were easily explained away to even sophisticated Wall Street folks (witness the tens of billions of dollars of “smart money” Madoff vaporized). Assuming Mark and Andrew trusted their father, it’s easy to see how they would have been able to confidently explain to employees why the sceptics were wrong, as the WSJ says they did, without ever really understanding how their father generated his returns.
The detail about Mark and Andrew having money invested with their father helps their case (or at least Andrew’s). It doesn’t prove anything: If you’re hell-bent on demonstrating your innocence, the first thing you would do is lose money, too. But it at least addresses the pressing question about why on earth the sons were NOT invested with Madoff, given his otherworldly returns.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.