In the annals of white collar crime, few villains have gone as quietly or as quickly as Bernard Madoff. The speed of his conviction tells us much about the audacity of the crime.
Usually these trials take months and the investigations even longer. It took five years to convict Enron's Ken Lay, for example, but he died by the time it came to sentencing. Sir Allen Stanford (so far only accused of similar crimes) looks to be digging in for a long fight and has refused to testify.
But Madoff was discovered running such a humongous con there was little point pretending otherwise. The former chairman of the Nasdaq stock exchange spent the best part of three decades stealing money from the most powerful and influential people in American society. By the time it all collapsed, investigators could find almost no evidence of real investment activity: all his energies were diverted to keeping money coming in to keep the pyramid scheme aloft.
If you are going to lie on this scale, it helps to lie in plain sight. Such was the acceptance of the cult of star fund managers, that even the SEC refused to listen to those who suggested this one might not be all he seemed.
Short of Warren Buffett being caught with his hand in the till, it is hard to imagine anything quite on this scale happening again soon - except, that is, in one respect. In a way, everything Madoff did was being carried out on a smaller scale by all of the thousands of fund managers around the world who promised a way to beat the system.
The promise of 'Alpha' - or returns that were uncorrelated to the performance of the rest of the market - was peddled by the entire hedge fund industry. The myth of ever-growing investment returns was the cornerstone of our modern financial system. Even the system of money itself was built on the idea that debt could grow faster than the underlying economy. As my graphic a few weeks ago - Where Did All The Money Go? - suggests, the whole world looks a bit like a Madoff pyramid scheme.
