Bernard Madoff’s Epic Fraud

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I had written in posts on Mars in Sagittarius and the Sagittarius New Moon Cycle that the extra potent December 12 Full Moon would reactivate energies from the September 15 Full Moon when the fall of Lehman Brothers became the biggest US bankruptcy filing ever, accelerating the global financial crisis.

The collapse of the ponzi scheme operated by Bernard Madoff (appropriately pronounced “Made-off”), and his subsequent arrest for securities fraud last week is emerging to become the world’s biggest fraud of all time by an investment advisor. European banks are already reporting $3.2 billion direct exposure out of $11 billion total exposure from lending to hedge funds. Clients who invested directly or indirectly with Bernard L. Madoff Investment Securities LLC read like a Who’s Who of the global financial and social circuit, including NY Mets owner Fred Wilpon, NY Daily News owner and real estate magnate Mort Zuckerman, and GMAC Chairman J. Ezra Merkin. Client losses have affected several charities primarily in New York and Florida, as well as Steven Spielberg’s Wunderkinder Foundation.

The Full Moon tends to bring situations to a “boiling point.” Due to its unusually close proximity to Earth, last week’s Full Moon shone like a powerful spotlight on the conditions represented by the Sun and Moon. The Sun and planets in Sagittarius put the focus on issues concerning ethics and trust. The Full Moon in Gemini reflects that there are multiple layers involved.

Gemini is symbolically represented by the twins, and although the two sons of Bernard Madoff were not twins, they are two years apart in age and worked on the trading side of their father’s investment firm. Last Tuesday Madoff told his sons he wanted to pay bonuses to employees earlier than normal. When questioned by his sons the next day, Madoff told them to come to his two floor apartment on Manhattan’s Upper East Side that evening to discuss the matter. Madoff confessed to his sons that he was “finished,” as his investment advisory business was “all just one big lie.” “Basically, it’s a giant ponzi scheme,” that he estimated to be $50 billion. At 8:30 AM Thursday morning, Madoff was arrested by the FBI and charged with securities fraud. He was released on a $10 million bond. A federal judge has ordered Madoff’s firm to be liquidated, and a trustee has been appointed to sort through and return what money remains to clients.

Bernard Lawrence Madoff was born on April 29, 1938*(time unknown) in New York City. He started his firm in 1960 initially as a market making business serving institutional investors with $5,000 he raised through lifeguarding and installing underground sprinkler systems. Taurus and its planetary ruler Venus rule banking and finance. With his Sun (self identity) in Taurus conjoining progressive and electrical Uranus, Madoff was considered a trailblazer in electronic markets. His firm was one of the first to automate market making, and was involved in the development of the NASDAQ, where he once served as Chairman. (Madoff was also a member of the NASDAQ board of governors, the executive committee, and chairman of its trading committee.) Uranus is a rebellious energy that seeks dynamic change, and Madoff frequently criticized the NYSE for its traditional, monopolistic structure.

Madoff was probably** born with Venus in its “home” sign Taurus challenging his Jupiter in Aquarius. Taurus energy especially enjoys creature comforts and the challenge to Jupiter represents the desire for living an extravagant lifestyle. In addition to his Manhattan apartment valued at $7 million, Madoff owns a house in Roslyn NY, a beachfront estate in Montauk Long Island, a home in France, and a home on the Intracoastal Waterway in Palm Beach. Taurus is symbolized by the bull, and Bull is the name of Madoff’s 55’ fishing boat.

Taurus energy is also known for being solid and steady. Madoff’s “steady returns” attracted between 0.5 and 1% of the hedge fund industry’s total assets. With Venus challenging his natal Jupiter, Madoff’s claim of his investments returning an average of 15.7% a year going back to January 1996 were a big exaggeration. Jupiter takes about twelve years to cycle around the Sun, and it’s taken one Jupiter cycle for his grand scheme to catch up with him!

Jupiter rules country clubs, and it’s estimated that at least 300 members of the Palm Beach Country Club invested with Madoff. The Palm Beach Country Club was founded in 1959 by people restricted from the waspy Everglades and Bath & Tennis clubs. Madoff had at least one “agent” and major investor at the club who would recruit new clients to his fund that was described as returning “a regular variable income.” Some members were told that one of the benefits of joining the club was potentially being “invited” to invest with Madoff. Investors chose not to second guess their fellow club member who attended the Red Cross Ball and other fundraisers, was called upon by the SEC to comment at roundtable discussions, and chaired Yeshiva University’s business school and was treasurer of the Board of Trustees.

Venus favorably aspecting Pluto helped Madoff cultivate the aura of social exclusivity and mystique so prized by the wealthy and status conscious Palm Beachers. Key planetary alignments between Madoff’s chart and the incorporation chart for Palm Beach solidified his success there. For starters, both Madoff and Palm Beach have Venus in the same degree of Taurus. Country Club members were eager to sign up as the town’s Mars conjoins Madoff’s Jupiter. What Madoff had to say fed people’s egos, as Madoff’s Mercury in Aries conjoins Palm Beach’s Sun. The town’s Saturn in Taurus conjoins Maddoff’s Sun; their established wealth and traditions fed into his self esteem and solidified his professional reputation. Investor losses have already forced four condos adjacent to The Breakers to be put up for sale and a pawn shop owner across the bridge in West Palm Beach said he was offered a Ferrari and a yacht as collateral. Transiting Saturn in Virgo will turn stationary direct on Palm Beach’s progessed*** Venus on
May 16, 2009 indicating that the town and many of its residents are in for a lot more financial belt tightening. Some prominent social alliances and relationships might come to an end during this new period of financial austerity in Palm Beach.

With his Mercury in Aries challenging Pluto in Cancer, keeping his business all in the family helped to ensure that his operations remained secret. His sons claimed they were not privy to the investment advisory side of the business as Madoff kept the financial statements in his office under lock and key. Between his positions in the financial industry, donations to politicians (including Sens. Clinton, Dodd, Lautenberg, and Schumer) and DC lobbyists, and charitable contributions, it appears that the SEC was once again asleep at the wheel. Of course it helps when Madoff’s niece who was the firm’s attorney and compliance officer, is married to Eric Swanson, a senior SEC examinations official. In fact Madoff’s investment advisory business was not even registered with the SEC until 2006.

Many red flags existed to investors and regulators that were not hard to spot. Despite the amount of assets under management, the firm was audited by a three person firm rather than a top tier auditor. No one can make consistent high returns year after year. Madoff charged commissions for each transaction rather than a management fee. What’s particularly surprising is that Madoff’s wealthiest individual clients did not have their own accountant look into what Madoff was doing before investing. It just shows how powerful exclusivity and trust can be.

When Madoff confessed to his fraud last week, the Sun and Mars in Sagittarius were exactly challenging his Neptune in Virgo while Uranus was opposing it. Neptune represents fantasy, magic, deception, lies, fraud and scandal. The energies of Saturn and Uranus have been impacting his natal Neptune. The combination of established investors (Saturn) requesting redemptions with a sharp drop in the ability to attract new money (Uranus) made it impossible for Madoff to continue his charade.

Beyond the future fate of Bernard Madoff is the fallout from his actions on the hedge fund industry, particularly the Fund of Funds business. (A Fund of Funds/FOF is essentially a hedge fund that invests in several other hedge funds.) Ironically the main selling point to prospective investors is that a FOF is supposed to have performed due diligence on the funds and the managers that comprise the FOF. Fairfield Greenwich Group had $7.5 billion of its $14.1 billion total assets under management connected to Madoff (as of November 1). Fairfield acted as a distributor for Madoff’s funds to many European and private Swiss banks, hedge funds and FOFs. Madoff’s Mercury/Pluto alignment found its match in the secretive world of Swiss finance where The Wall Street Journal said his funds “were marketed as so-called black boxes, and attempts to look closely were largely rebuffed.”

Bernard Madoff’s role in the drama of global high finance was to serve as the lighting rod to shock government regulators and investors (Uranus in Pisces) to see how much havoc the lack of financial reporting, regulation, and structure (Saturn in Virgo) has created in the financial system. Pluto in Capricorn has arrived, uncovering the secrets of the status quo in this opaque world in order to transform the entire global financial system.

*Multiple news sources state Madoff was born in 1938/70 years old. The only place I have found his birth month and day is Wikipedia, which does not provide a source for the date. Based on other information I’ve outlined here, the date is probably correct. If not, I will write a new post to correct information written here describing his birth influences.

**Without a time of birth, Madoff’s Venus placement is not certain as Venus shifted from Taurus to Gemini around 7:45 PM EDT on April 29, 1938. Madoff’s Moon (our emotional instincts) is either in pioneering Aries or Taurus.

***Planets do not really move backwards, but appear to from Earth’s vantage point. When a planet appears stationary, the energies it represents are extra potent. Saturn represents contraction. Progression is a mathematical calculation that moves the birth planets forward in time as a method of prediction.

Town of Palm Beach Inc: April 17, 1911

My primary background sources for writing this post were the Financial Times and The Wall Street Journal. (Clicking on the links takes you directly to each paper’s special coverage of the Madoff scandal.)

1 comment:

Anonymous said...

Fantastic article. Thanks.