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As the main supplier of capital to Bernard Madoff with over $7bn raised from clients whose investments have now evaporated it is a fair question to ask if Andres Piedrahita of Fairfield and his father in law (and boss) at Fairfield Walter Noel were victims of Madoff or part of the scam. I have known Andres Piedrahita and his wife for 8 years now. Andres Piedrahita invested with me in some of my tech start ups through our mutual friend Adam Horne. So I have had enough dealings with him to at least have an opinion on this financial disaster that I would like to share with my readers. I think that it is more likely that Andres Piedrahita and Walter Noel were victims of Madoff than his partners in crime. Indeed it seems to be the case that even Madoff children were not part of the swindle. That they themselves lost money in his “fund”. After a telephone conversation with Andres this morning I heard that he and many family members including his father in law Walter Noel lost enormous amounts of their personal net worth in Madoff´s Ponzi Scheme. Tragically it seems that Andres and his family took money out from many other hedge funds and recently put it with Madoff as he was one of the only hedge fund managers “doing well” this year. Now why did not Fairfield Greenwich do more due diligence and find out that Madoff was a crook? Where they happy with all the commissions they were making and did not feel like investigating? Andres answer to this question was that they did have 2 PhDs assigned to checking Madoff out and that they were simply given fraudulent data. This is probably true because even the SEC examined Madoff´s operation twice and could not find anything wrong with it. I think that Madoff´s scandal is another proof that the global financial regulatory system is broken and needs serious rebuilding.
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yani on December 14, 2008 ·
Martin
you might improve that system but there are always ways around it. These days, I am really deeply reflecting about money and greed. I have executed an investment last year in Australia – at that time, I was credited with having done a fabulous deal. Now, the deal went sour because of the markets, and I am the ‘bad guy’. (% of mezzanine vs traditional credit was too high and currency changed dramatically) Well, it was our family fund, so I don’t get punished really. But what it boils down to is that everyone in the game just wanted a lot (greed) without realizing that the world(and systems) is sometimes more fragile than you think. My conclusion is : lower expectations in general.
investorsconundrum on December 31, 2008 ·
Fairfield contibuted to the ponzi scheme, look at this link (in castellano but with english documents. Yo will see, for example, how in 2006 Fairfield helps Madoff in a FED investigation:
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Siegfried Wagner on December 14, 2008 ·
Martin,
Is not as easy as you said…, some of us knows that Fairfield lost money in your ventures, Walter Noel and Andres Piedrahita, nice people but VERY ARROGANT and VERY GREEDY, is not clear,
Yes you do not need to be a PHD to get easy questions as how you can have 10% profits when the S&P, Nasdaq , Dow and all the index are down by 16% or more.There are questions to be done, Madoff was given 10/12 profits each year and Fairfield Sentry 5/6% per year????
Are Walter N and Andres P also the OXIMORONS of the world???