Adrian

"To me regulation is not the problem but transparency. On this blog I've advocated for a FriendFeed like feed for brokerage, investment and institutions to provide of their trading activities: http://bit.ly/XfLT Obviously with hedge funds in particular, they'd want their trading activities secret. But with such activities publicized, at least scrutinies could be applied: are trades actually occurring (revealing a Ponzi scheme)? What actual shares and securities are being bought and sold? (to ideally reveal naked shorting) The more detailed the feed the better, so that different behaviors that seriously undermine stability can be revealed. I have also advocated on this blog a social network of market participants, where ratings, comments and feedback can be applied, whereby the aforementioned feeds can be embedded. Also, a rather experimental idea of allowing business and individuals to swap confidential data in a bid to build trust that would otherwise be hard to find. A centralized..." - Adrian

I am amazed that the SEC found nothing criminal in 1992 during their investigations, and despite serious suspicions in parts of the financial community regarding Madoff, nothing ever came about to discover his Ponzi scheme. It's like he was the equivalent to a mafia kingpin, and above the law. - Adrian

The reason it worked I reckon is because the consistent returns that were reported kept attracting more investors. And, most investors had a lot more money than they'd ever need to live off, so they probably kept it with him, only withdrawing comparatively small amounts needed to support a lifestyle. If the returns stayed good, more money would come. The crash meant that out-of-the-ordinary amounts were being requested and which obviously didn't exist. - Adrian

Another takeway: to separate asset management with brokerage. Dividing businesses out of compositional units has already occurred in terms of accounting and business consulting firms (eg Arthur Andersen, Deloitte). Now perhaps it should happen with brokerage and asset management? - Adrian