More on Technology
Jussi Luukkonen, MBA
3 years ago
Is Apple Secretly Building A Disruptive Tsunami?
A TECHNICAL THOUGHT
The IT giant is seeding the digital Great Renaissance.
Recently, technology has been dull.
We're still fascinated by processing speeds. Wearables are no longer an engineer's dream.
Apple has been quiet and avoided huge announcements. Slowness speaks something. Everything in the spaceship HQ seems to be turning slowly, unlike competitors around buzzwords.
Is this a sign of the impending storm?
Metas stock has fallen while Google milks dumb people. Microsoft steals money from corporations and annexes platforms like Linkedin.
Just surface bubbles?
Is Apple, one of the technology continents, pushing against all others to create a paradigm shift?
The fundamental human right to privacy
Apple's unusual remarks emphasize privacy. They incorporate it into their business models and judgments.
Apple believes privacy is a human right. There are no compromises.
This makes it hard for other participants to gain Apple's ecosystem's efficiencies.
Other players without hardware platforms lose.
Apple delivers new kidneys without rejection, unlike other software vendors. Nothing compromises your privacy.
Corporate citizenship will become more popular.
Apples have full coffers. They've started using that flow to better communities, which is great.
Apple's $2.5B home investment is one example. Google and Facebook are building or proposing to build workforce housing.
Apple's funding helps marginalized populations in more than 25 California counties, not just Apple employees.
Is this a trend, and does Apple keep giving back? Hope so.
I'm not cynical enough to suspect these investments have malicious motives.
The last frontier is the environment.
Climate change is a battle-to-win.
Long-term winners will be companies that protect the environment, turning climate change dystopia into sustainable growth.
Apple has been quietly changing its supply chain to be carbon-neutral by 2030.
“Apple is dedicated to protecting the planet we all share with solutions that are supporting the communities where we work.” Lisa Jackson, Apple’s vice president of environment.
Apple's $4.7 billion Green Bond investment will produce 1.2 gigawatts of green energy for the corporation and US communities. Apple invests $2.2 billion in Europe's green energy. In the Philippines, Thailand, Nigeria, Vietnam, Colombia, Israel, and South Africa, solar installations are helping communities obtain sustainable energy.
Apple is already carbon neutral today for its global corporate operations, and this new commitment means that by 2030, every Apple device sold will have net zero climate impact. -Apple.
Apple invests in green energy and forests to reduce its paper footprint in China and the US. Apple and the Conservation Fund are safeguarding 36,000 acres of US working forest, according to GreenBiz.
Apple's packaging paper is recycled or from sustainably managed forests.
What matters is the scale.
$1 billion is a rounding error for Apple.
These small investments originate from a tree with deep, spreading roots.
Apple's genes are anchored in building the finest products possible to improve consumers' lives.
I felt it when I switched to my iPhone while waiting for a train and had to pack my Macbook. iOS 16 dictation makes writing more enjoyable. Small change boosts productivity. Smooth transition from laptop to small screen and dictation.
Apples' tiny, well-planned steps have great growth potential for all consumers in everything they do.
There is clearly disruption, but it doesn't have to be violent
Digital channels, methods, and technologies have globalized human consciousness. One person's responsibility affects many.
Apple gives us tools to be privately connected. These technologies foster creativity, innovation, fulfillment, and safety.
Apple has invented a mountain of technologies, services, and channels to assist us adapt to the good future or combat evil forces who cynically aim to control us and ruin the environment and communities. Apple has quietly disrupted sectors for decades.
Google, Microsoft, and Meta, among others, should ride this wave. It's a tsunami, but it doesn't have to be devastating if we care, share, and cooperate with political decision-makers and community leaders worldwide.
A fresh Renaissance
Renaissance geniuses Michelangelo and Da Vinci. Different but seeing something no one else could yet see. Both were talented in many areas and could discover art in science and science in art.
These geniuses exemplified a period that changed humanity for the better. They created, used, and applied new, valuable things. It lives on.
Apple is a digital genius orchard. Wozniak and Jobs offered us fertile ground for the digital renaissance. We'll build on their legacy.
We may put our seeds there and see them bloom despite corporate greed and political ignorance.
I think the coming tsunami will illuminate our planet like the Renaissance.
VIP Graphics
3 years ago
Leaked pitch deck for Metas' new influencer-focused live-streaming service
As part of Meta's endeavor to establish an interactive live-streaming platform, the company is testing with influencers.
The NPE (new product experimentation team) has been testing Super since late 2020.
Bloomberg defined Super as a Cameo-inspired FaceTime-like gadget in 2020. The tool has evolved into a Twitch-like live streaming application.
Less than 100 creators have utilized Super: Creators can request access on Meta's website. Super isn't an Instagram, Facebook, or Meta extension.
“It’s a standalone project,” the spokesperson said about Super. “Right now, it’s web only. They have been testing it very quietly for about two years. The end goal [of NPE projects] is ultimately creating the next standalone project that could be part of the Meta family of products.” The spokesperson said the outreach this week was part of a drive to get more creators to test Super.
A 2021 pitch deck from Super reveals the inner workings of Meta.
The deck gathered feedback on possible sponsorship models, with mockups of brand deals & features. Meta reportedly paid creators $200 to $3,000 to test Super for 30 minutes.
Meta's pitch deck for Super live streaming was leaked.
What were the slides in the pitch deck for Metas Super?
Embed not supported: see full deck & article here →
View examples of Meta's pitch deck for Super:
Product Slides, first
The pitch deck begins with Super's mission:
Super is a Facebook-incubated platform which helps content creators connect with their fans digitally, and for super fans to meet and support their favorite creators. In the spirit of Late Night talk shows, we feature creators (“Superstars”), who are guests at a live, hosted conversation moderated by a Host.
This slide (and most of the deck) is text-heavy, with few icons, bullets, and illustrations to break up the content. Super's online app status (which requires no download or installation) might be used as a callout (rather than paragraph-form).
Meta's Super platform focuses on brand sponsorships and native placements, as shown in the slide above.
One of our theses is the idea that creators should benefit monetarily from their Super experiences, and we believe that offering a menu of different monetization strategies will enable the right experience for each creator. Our current focus is exploring sponsorship opportunities for creators, to better understand what types of sponsor placements will facilitate the best experience for all Super customers (viewers, creators, and advertisers).
Colorful mockups help bring Metas vision for Super to life.
2. Slide Features
Super's pitch deck focuses on the platform's features. The deck covers pre-show, pre-roll, and post-event for a Sponsored Experience.
Pre-show: active 30 minutes before the show's start
Pre-roll: Play a 15-minute commercial for the sponsor before the event (auto-plays once)
Meet and Greet: This event can have a branding, such as Meet & Greet presented by [Snickers]
Super Selfies: Makers and followers get a digital souvenir to post on social media.
Post-Event: Possibility to draw viewers' attention to sponsored content/links during the after-show
Almost every screen displays the Sponsor logo, link, and/or branded background. Viewers can watch sponsor video while waiting for the event to start.
Slide 3: Business Model
Meta's presentation for Super is incomplete without numbers. Super's first slide outlines the creator, sponsor, and Super's obligations. Super does not charge creators any fees or commissions on sponsorship earnings.
How to make a great pitch deck
We hope you can use the Super pitch deck to improve your business. Bestpitchdeck.com/super-meta is a bookmarkable link.
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Our team has helped close $100M+ in agreements and funding for premier companies and VC firms. Use our presentation templates, one-pagers, or financial models to launch your pitch.
Every pitch must be audience-specific. Our team has prepared pitch decks for various sectors and fundraising phases.
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M&A Pitch Deck Perfect Pitch Deck is a template for later-stage enterprises engaging more sophisticated conversations like M&A, late-stage investment (Series C+), or partnerships & funding. Our team prepared this presentation to help creators confidently pitch to investment banks, PE firms, and hedge funds (and vice versa).
Browse our growing variety of industry-specific pitch decks.
Al Anany
2 years ago
Notion AI Might Destroy Grammarly and Jasper
The trick Notion could use is simply Facebook-ing the hell out of them.
*Time travel to fifteen years ago.* Future-Me: “Hey! What are you up to?” Old-Me: “I am proofreading an article. It’s taking a few hours, but I will be done soon.” Future-Me: “You know, in the future, you will be using a google chrome plugin called Grammarly that will help you easily proofread articles in half that time.” Old-Me: “What is… Google Chrome?” Future-Me: “Gosh…”
I love Grammarly. It’s one of those products that I personally feel the effects of. I mean, Space X is a great company. But I am not a rocket writing this article in space (or am I?)…
No, I’m not. So I don’t personally feel a connection to Space X. So, if a company collapse occurs in the morning, I might write about it. But I will have zero emotions regarding it.
Yet, if Grammarly fails tomorrow, I will feel 1% emotionally distressed. So looking at the title of this article, you’d realize that I am betting against them. This is how much I believe in the critical business model that’s taking over the world, the one of Notion.
Notion How frequently do you go through your notes?
Grammarly is everywhere, which helps its success. Grammarly is available when you update LinkedIn on Chrome. Grammarly prevents errors in Google Docs.
My internal concentration isn't apparent in the previous paragraph. Not Grammarly. I should have used Chrome to make a Google doc and LinkedIn update. Without this base, Grammarly will be useless.
So, welcome to this business essay.
Grammarly provides a solution.
Another issue is resolved by Jasper.
Your entire existence is supposed to be contained within Notion.
New Google Chrome is offline. It's an all-purpose notepad (in the near future.)
How should I start my blog? Enter it in Note.
an update on LinkedIn? If you mention it, it might be automatically uploaded there (with little help from another app.)
An advanced thesis? You can brainstorm it with your coworkers.
This ad sounds great! I won't cry if Notion dies tomorrow.
I'll reread the following passages to illustrate why I think Notion could kill Grammarly and Jasper.
Notion is a fantastic app that incubates your work.
Smartly, they began with note-taking.
Hopefully, your work will be on Notion. Grammarly and Jasper are still must-haves.
Grammarly will proofread your typing while Jasper helps with copywriting and AI picture development.
They're the best, therefore you'll need them. Correct? Nah.
Notion might bombard them with Facebook posts.
Notion: “Hi Grammarly, do you want to sell your product to us?” Grammarly: “Dude, we are more valuable than you are. We’ve even raised $400m, while you raised $342m. Our last valuation round put us at $13 billion, while yours put you at $10 billion. Go to hell.” Notion: “Okay, we’ll speak again in five years.”
Notion: “Jasper, wanna sell?” Jasper: “Nah, we’re deep into AI and the field. You can’t compete with our people.” Notion: “How about you either sell or you turn into a Snapchat case?” Jasper: “…”
Notion is your home. Grammarly is your neighbor. Your track is Jasper.
What if you grew enough vegetables in your backyard to avoid the supermarket? No more visits.
What if your home had a beautiful treadmill? You won't rush outside as much (I disagree with my own metaphor). (You get it.)
It's Facebooking. Instagram Stories reduced your Snapchat usage. Notion will reduce your need to use Grammarly.
The Final Piece of the AI Puzzle
Let's talk about Notion first, since you've probably read about it everywhere.
They raised $343 million, as I previously reported, and bought four businesses
According to Forbes, Notion will have more than 20 million users by 2022. The number of users is up from 4 million in 2020.
If raising $1.8 billion was impressive, FTX wouldn't have fallen.
This article compares the basic product to two others. Notion is a day-long app.
Notion has released Notion AI to support writers. It's early, so it's not as good as Jasper. Then-Jasper isn't now-Jasper. In five years, Notion AI will be different.
With hard work, they may construct a Jasper-like writing assistant. They have resources and users.
At this point, it's all speculation. Jasper's copywriting is top-notch. Grammarly's proofreading is top-notch. Businesses are constrained by user activities.
If Notion's future business movements are strategic, they might become a blue ocean shark (or get acquired by an unbelievable amount.)
I love business mental teasers, so tell me:
How do you feel? Are you a frequent Notion user?
Do you dispute my position? I enjoy hearing opposing viewpoints.
Ironically, I proofread this with Grammarly.
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Nick Nolan
3 years ago
How to Make $1,037,100 in 4 Months with This Weird Website
One great idea might make you rich.
Imagine having a million-dollar concept in college that made a million.
2005 precisely.
Alex Tew, 21, from Wiltshire, England, created The Million Dollar Homepage in August 2005. The idea is basic but beyond the ordinary, which is why it worked.
Alex built a 1,000,000-pixel webpage.
Each website pixel would cost $1. Since pixels are hard to discern, he sold 10x10 squares for $100.
He'd make a million if all the spots sold.
He may have thought about NFTs and the Metaverse decades ago.
MillionDollarHomepage.com launched in 2005.
Businesses and individuals could buy a website spot and add their logo, website link, and tagline. You bought an ad, but nobody visited the website.
If a few thousand people visited the website, it could drive traffic to your business's site.
Alex promised buyers the website would be up for 5 years, so it was a safe bet.
Alex's friend with a music website was the first to buy real estate on the site. Within two weeks, 4,700 pixels sold, and a tracker showed how many were sold and available.
Word-of-mouth marketing got the press's attention quickly. Everyone loves reading about new ways to make money, so it was a good news story.
By September, over 250,000 pixels had been sold, according to a BBC press release.
Alex and the website gained more media and public attention, so traffic skyrocketed. Two months after the site launched, 1,400 customers bought more than 500,000 pixels.
Businesses bought online real estate. They heard thousands visited the site, so they could get attention cheaply.
Unless you bought a few squares, I'm not sure how many people would notice your ad or click your link.
A sponge website owner emailed Alex:
“We tried Million Dollar Homepage because we were impressed at the level of ingenuity and the sheer simplicity of it. If we’re honest, we didn’t expect too much from it. Now, as a direct result, we are pitching for £18,000 GBP worth of new clients and have seen our site traffic increase over a hundred-fold. We’re even going to have to upgrade our hosting facility! It’s been exceptional.”
Web.archive.org screenshots show how the website changed.
“The idea is to create something of an internet time capsule: a homepage that is unique and permanent. Everything on the internet keeps changing so fast, it will be nice to have something that stays solid and permanent for many years. You can be a part of that!” Alex Tew, 2005
The last 1,000 pixels were sold on January 1, 2006.
By then, the homepage had hundreds of thousands of monthly visitors. Alex put the last space on eBay due to high demand.
MillionDollarWeightLoss.com won the last pixels for $38,100, bringing revenue to $1,037,100 in 4 months.
Many have tried to replicate this website's success. They've all failed.
This idea only worked because no one had seen this website before.
This winner won't be repeated, but it should inspire you to try something new and creative.
Still popular, you could buy one of the linked domains. You can't buy pixels, but you can buy an expired domain.
One link I clicked costs $59,888.
You'd own a piece of internet history if you spent that much on a domain.
Someone bought stablesgallery.co.uk after the domain expired and restored it.
Many of the linked websites have expired or been redirected, but some still link to the original. I couldn't find sponge's website. Can you?
This is a great example of how a simple creative idea can go viral.
Comment on this amazing success story.
Max Chafkin
3 years ago
Elon Musk Bets $44 Billion on Free Speech's Future
Musk’s purchase of Twitter has sealed his bond with the American right—whether the platform’s left-leaning employees and users like it or not.
Elon Musk's pursuit of Twitter Inc. began earlier this month as a joke. It started slowly, then spiraled out of control, culminating on April 25 with the world's richest man agreeing to spend $44 billion on one of the most politically significant technology companies ever. There have been bigger financial acquisitions, but Twitter's significance has always outpaced its balance sheet. This is a unique Silicon Valley deal.
To recap: Musk announced in early April that he had bought a stake in Twitter, citing the company's alleged suppression of free speech. His complaints were vague, relying heavily on the dog whistles of the ultra-right. A week later, he announced he'd buy the company for $54.20 per share, four days after initially pledging to join Twitter's board. Twitter's directors noticed the 420 reference as well, and responded with a “shareholder rights” plan (i.e., a poison pill) that included a 420 joke.
Musk - Patrick Pleul/Getty Images
No one knew if the bid was genuine. Musk's Twitter plans seemed implausible or insincere. In a tweet, he referred to automated accounts that use his name to promote cryptocurrency. He enraged his prospective employees by suggesting that Twitter's San Francisco headquarters be turned into a homeless shelter, renaming the company Titter, and expressing solidarity with his growing conservative fan base. “The woke mind virus is making Netflix unwatchable,” he tweeted on April 19.
But Musk got funding, and after a frantic weekend of negotiations, Twitter said yes. Unlike most buyouts, Musk will personally fund the deal, putting up up to $21 billion in cash and borrowing another $12.5 billion against his Tesla stock.
Free Speech and Partisanship
Percentage of respondents who agree with the following
The deal is expected to replatform accounts that were banned by Twitter for harassing others, spreading misinformation, or inciting violence, such as former President Donald Trump's account. As a result, Musk is at odds with his own left-leaning employees, users, and advertisers, who would prefer more content moderation rather than less.
Dorsey - Photographer: Joe Raedle/Getty Images
Previously, the company's leadership had similar issues. Founder Jack Dorsey stepped down last year amid concerns about slowing growth and product development, as well as his dual role as CEO of payments processor Block Inc. Compared to Musk, a father of seven who already runs four companies (besides Tesla and SpaceX), Dorsey is laser-focused.
Musk's motivation to buy Twitter may be political. Affirming the American far right with $44 billion spent on “free speech” Right-wing activists have promoted a series of competing upstart Twitter competitors—Parler, Gettr, and Trump's own effort, Truth Social—since Trump was banned from major social media platforms for encouraging rioters at the US Capitol on Jan. 6, 2021. But Musk can give them a social network with lax content moderation and a real user base. Trump said he wouldn't return to Twitter after the deal was announced, but he wouldn't be the first to do so.
Trump - Eli Hiller/Bloomberg
Conservative activists and lawmakers are already ecstatic. “A great day for free speech in America,” said Missouri Republican Josh Hawley. The day the deal was announced, Tucker Carlson opened his nightly Fox show with a 10-minute laudatory monologue. “The single biggest political development since Donald Trump's election in 2016,” he gushed over Musk.
But Musk's supporters and detractors misunderstand how much his business interests influence his political ideology. He marketed Tesla's cars as carbon-saving machines that were faster and cooler than gas-powered luxury cars during George W. Bush's presidency. Musk gained a huge following among wealthy environmentalists who reserved hundreds of thousands of Tesla sedans years before they were made during Barack Obama's presidency. Musk in the Trump era advocated for a carbon tax, but he also fought local officials (and his own workers) over Covid rules that slowed the reopening of his Bay Area factory.
Teslas at the Las Vegas Convention Center Loop Central Station in April 2021. The Las Vegas Convention Center Loop was Musk's first commercial project. Ethan Miller/Getty Images
Musk's rightward shift matched the rise of the nationalist-populist right and the desire to serve a growing EV market. In 2019, he unveiled the Cybertruck, a Tesla pickup, and in 2018, he announced plans to manufacture it at a new plant outside Austin. In 2021, he decided to move Tesla's headquarters there, citing California's "land of over-regulation." After Ford and General Motors beat him to the electric truck market, Musk reframed Tesla as a company for pickup-driving dudes.
Similarly, his purchase of Twitter will be entwined with his other business interests. Tesla has a factory in China and is friendly with Beijing. This could be seen as a conflict of interest when Musk's Twitter decides how to treat Chinese-backed disinformation, as Amazon.com Inc. founder Jeff Bezos noted.
Musk has focused on Twitter's product and social impact, but the company's biggest challenges are financial: Either increase cash flow or cut costs to comfortably service his new debt. Even if Musk can't do that, he can still benefit from the deal. He has recently used the increased attention to promote other business interests: Boring has hyperloops and Neuralink brain implants on the way, Musk tweeted. Remember Tesla's long-promised robotaxis!
Musk may be comfortable saying he has no expectation of profit because it benefits his other businesses. At the TED conference on April 14, Musk insisted that his interest in Twitter was solely charitable. “I don't care about money.”
The rockets and weed jokes make it easy to see Musk as unique—and his crazy buyout will undoubtedly add to that narrative. However, he is a megabillionaire who is risking a small amount of money (approximately 13% of his net worth) to gain potentially enormous influence. Musk makes everything seem new, but this is a rehash of an old media story.
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Adam Hayes
3 years ago
Bernard Lawrence "Bernie" Madoff, the largest Ponzi scheme in history
Madoff who?
Bernie Madoff ran the largest Ponzi scheme in history, defrauding thousands of investors over at least 17 years, and possibly longer. He pioneered electronic trading and chaired Nasdaq in the 1990s. On April 14, 2021, he died while serving a 150-year sentence for money laundering, securities fraud, and other crimes.
Understanding Madoff
Madoff claimed to generate large, steady returns through a trading strategy called split-strike conversion, but he simply deposited client funds into a single bank account and paid out existing clients. He funded redemptions by attracting new investors and their capital, but the market crashed in late 2008. He confessed to his sons, who worked at his firm, on Dec. 10, 2008. Next day, they turned him in. The fund reported $64.8 billion in client assets.
Madoff pleaded guilty to 11 federal felony counts, including securities fraud, wire fraud, mail fraud, perjury, and money laundering. Ponzi scheme became a symbol of Wall Street's greed and dishonesty before the financial crisis. Madoff was sentenced to 150 years in prison and ordered to forfeit $170 billion, but no other Wall Street figures faced legal ramifications.
Bernie Madoff's Brief Biography
Bernie Madoff was born in Queens, New York, on April 29, 1938. He began dating Ruth (née Alpern) when they were teenagers. Madoff told a journalist by phone from prison that his father's sporting goods store went bankrupt during the Korean War: "You watch your father, who you idolize, build a big business and then lose everything." Madoff was determined to achieve "lasting success" like his father "whatever it took," but his career had ups and downs.
Early Madoff investments
At 22, he started Bernard L. Madoff Investment Securities LLC. First, he traded penny stocks with $5,000 he earned installing sprinklers and as a lifeguard. Family and friends soon invested with him. Madoff's bets soured after the "Kennedy Slide" in 1962, and his father-in-law had to bail him out.
Madoff felt he wasn't part of the Wall Street in-crowd. "We weren't NYSE members," he told Fishman. "It's obvious." According to Madoff, he was a scrappy market maker. "I was happy to take the crumbs," he told Fishman, citing a client who wanted to sell eight bonds; a bigger firm would turn it down.
Recognition
Success came when he and his brother Peter built electronic trading capabilities, or "artificial intelligence," that attracted massive order flow and provided market insights. "I had all these major banks coming down, entertaining me," Madoff told Fishman. "It was mind-bending."
By the late 1980s, he and four other Wall Street mainstays processed half of the NYSE's order flow. Controversially, he paid for much of it, and by the late 1980s, Madoff was making in the vicinity of $100 million a year. He was Nasdaq chairman from 1990 to 1993.
Madoff's Ponzi scheme
It is not certain exactly when Madoff's Ponzi scheme began. He testified in court that it began in 1991, but his account manager, Frank DiPascali, had been at the firm since 1975.
Why Madoff did the scheme is unclear. "I had enough money to support my family's lifestyle. "I don't know why," he told Fishman." Madoff could have won Wall Street's respect as a market maker and electronic trading pioneer.
Madoff told Fishman he wasn't solely responsible for the fraud. "I let myself be talked into something, and that's my fault," he said, without saying who convinced him. "I thought I could escape eventually. I thought it'd be quick, but I couldn't."
Carl Shapiro, Jeffry Picower, Stanley Chais, and Norm Levy have been linked to Bernard L. Madoff Investment Securities LLC for years. Madoff's scheme made these men hundreds of millions of dollars in the 1960s and 1970s.
Madoff told Fishman, "Everyone was greedy, everyone wanted to go on." He says the Big Four and others who pumped client funds to him, outsourcing their asset management, must have suspected his returns or should have. "How can you make 15%-18% when everyone else is making less?" said Madoff.
How Madoff Got Away with It for So Long
Madoff's high returns made clients look the other way. He deposited their money in a Chase Manhattan Bank account, which merged to become JPMorgan Chase & Co. in 2000. The bank may have made $483 million from those deposits, so it didn't investigate.
When clients redeemed their investments, Madoff funded the payouts with new capital he attracted by promising unbelievable returns and earning his victims' trust. Madoff created an image of exclusivity by turning away clients. This model let half of Madoff's investors profit. These investors must pay into a victims' fund for defrauded investors.
Madoff wooed investors with his philanthropy. He defrauded nonprofits, including the Elie Wiesel Foundation for Peace and Hadassah. He approached congregants through his friendship with J. Ezra Merkin, a synagogue officer. Madoff allegedly stole $1 billion to $2 billion from his investors.
Investors believed Madoff for several reasons:
- His public portfolio seemed to be blue-chip stocks.
- His returns were high (10-20%) but consistent and not outlandish. In a 1992 interview with Madoff, the Wall Street Journal reported: "[Madoff] insists the returns were nothing special, given that the S&P 500-stock index returned 16.3% annually from 1982 to 1992. 'I'd be surprised if anyone thought matching the S&P over 10 years was remarkable,' he says.
- "He said he was using a split-strike collar strategy. A collar protects underlying shares by purchasing an out-of-the-money put option.
SEC inquiry
The Securities and Exchange Commission had been investigating Madoff and his securities firm since 1999, which frustrated many after he was prosecuted because they felt the biggest damage could have been prevented if the initial investigations had been rigorous enough.
Harry Markopolos was a whistleblower. In 1999, he figured Madoff must be lying in an afternoon. The SEC ignored his first Madoff complaint in 2000.
Markopolos wrote to the SEC in 2005: "The largest Ponzi scheme is Madoff Securities. This case has no SEC reward, so I'm turning it in because it's the right thing to do."
Many believed the SEC's initial investigations could have prevented Madoff's worst damage.
Markopolos found irregularities using a "Mosaic Method." Madoff's firm claimed to be profitable even when the S&P fell, which made no mathematical sense given what he was investing in. Markopolos said Madoff Securities' "undisclosed commissions" were the biggest red flag (1 percent of the total plus 20 percent of the profits).
Markopolos concluded that "investors don't know Bernie Madoff manages their money." Markopolos learned Madoff was applying for large loans from European banks (seemingly unnecessary if Madoff's returns were high).
The regulator asked Madoff for trading account documentation in 2005, after he nearly went bankrupt due to redemptions. The SEC drafted letters to two of the firms on his six-page list but didn't send them. Diana Henriques, author of "The Wizard of Lies: Bernie Madoff and the Death of Trust," documents the episode.
In 2008, the SEC was criticized for its slow response to Madoff's fraud.
Confession, sentencing of Bernie Madoff
Bernard L. Madoff Investment Securities LLC reported 5.6% year-to-date returns in November 2008; the S&P 500 fell 39%. As the selling continued, Madoff couldn't keep up with redemption requests, and on Dec. 10, he confessed to his sons Mark and Andy, who worked at his firm. "After I told them, they left, went to a lawyer, who told them to turn in their father, and I never saw them again. 2008-12-11: Bernie Madoff arrested.
Madoff insists he acted alone, but several of his colleagues were jailed. Mark Madoff died two years after his father's fraud was exposed. Madoff's investors committed suicide. Andy Madoff died of cancer in 2014.
2009 saw Madoff's 150-year prison sentence and $170 billion forfeiture. Marshals sold his three homes and yacht. Prisoner 61727-054 at Butner Federal Correctional Institution in North Carolina.
Madoff's lawyers requested early release on February 5, 2020, claiming he has a terminal kidney disease that may kill him in 18 months. Ten years have passed since Madoff's sentencing.
Bernie Madoff's Ponzi scheme aftermath
The paper trail of victims' claims shows Madoff's complexity and size. Documents show Madoff's scam began in the 1960s. His final account statements show $47 billion in "profit" from fake trades and shady accounting.
Thousands of investors lost their life savings, and multiple stories detail their harrowing loss.
Irving Picard, a New York lawyer overseeing Madoff's bankruptcy, has helped investors. By December 2018, Picard had recovered $13.3 billion from Ponzi scheme profiteers.
A Madoff Victim Fund (MVF) was created in 2013 to help compensate Madoff's victims, but the DOJ didn't start paying out the $4 billion until late 2017. Richard Breeden, a former SEC chair who oversees the fund, said thousands of claims were from "indirect investors"
Breeden and his team had to reject many claims because they weren't direct victims. Breeden said he based most of his decisions on one simple rule: Did the person invest more than they withdrew? Breeden estimated 11,000 "feeder" investors.
Breeden wrote in a November 2018 update for the Madoff Victim Fund, "We've paid over 27,300 victims 56.65% of their losses, with thousands more to come." In December 2018, 37,011 Madoff victims in the U.S. and around the world received over $2.7 billion. Breeden said the fund expected to make "at least one more significant distribution in 2019"
This post is a summary. Read full article here