“When you meet him, you’d like him.” – Pat Fishe, professor of finance at University of Richmond’s Robins School of Business.
Fishe met alleged fraud Bernard Madoff in 2000 while serving as a visiting fellow at the Securities and Exchange Commission. On occasion, Madoff provided expert insight for the SEC.
Below is an edited version of RBS’s phone chat with Fishe.
Richmond BizSense: You met him while at the SEC?
Pat Fishe: I was in a couple of meetings with him, advisory groups on different subjects. He was a well-thought of guy when we had something to do with his expertise.
RBS: So what kind of guy is he, and how was he able to get so many people to invest?
PF: It’s a behavioral thing (related) to the personality of individuals. I’ve met this guy, and that can have an overwhelming influence on your decisions. He has a track record, and he’s a nice guy; affable, easy to talk to. You’d want to have a beer with him. That’s the kind of guy he is. And that’s a big determinate in a decision even though the track record is bogus.
RBS: Why weren’t more professional money managers leery of his returns?
PF: He was offering outsized returns. They didn’t make sense even then. A lot of smart people didn’t see the signals. The key is to trust but verify. ‘Yes, I trust you, you’re a nice person, but I want to make sure the books were good.’
RBS: Have you heard of anyone locally being exposed?
PF: I have not heard of anyone locally being taken.
RBS: Does this quash the value of so-called fund funds?
PF: Fund to fund was never (a good option) in my opinion. All things the fund to fund did was give access to proprietary (managers).
RBS: It seems like the entire stock market seems like a Ponzi scheme right now. Perhaps that’s too strong, but what’s going on.
PF: We’ve flipped up a carpet to see what’s underneath, and some of the wood is rotten. But there are clear economics to it – the stock market falling has a lot do with the loss of wealth in home equity.
Click here to read RBS’s account of a Richmond Ponzi Scheme.
BizSense’s required reading on Madoff:
Innocence Lost: Portfolio
In the spring of 2001, a Barron’s reporter was among the first to publicly question Bernie Madoff’s record. She tells Portfolio.com how she did it.
Madoff Enjoyed $50 Pedicures, 9.8 Handicap, Boat Called ‘Bull’, Bloomblurg
Two weeks ago, Bernard Madoff stopped by the Everglades Barber Shop off Worth Avenue in Palm Beach, Florida, for the usual: a $65 haircut, a $40 shave, a $50 pedicure and a $22 manicure.
Aaron Kremer is the BizSense Editor. You can contact at [email protected]