{"id":533321,"date":"2023-01-01T06:49:48","date_gmt":"2023-01-01T03:49:48","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-sam-bankman-fried-madoff-with-regulators\/"},"modified":"2023-01-01T06:49:48","modified_gmt":"2023-01-01T03:49:48","slug":"how-sam-bankman-fried-madoff-with-regulators","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-sam-bankman-fried-madoff-with-regulators\/","title":{"rendered":"#How Sam Bankman-Fried &#8216;Madoff&#8217; with regulators"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25b64763b0b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25b64763b0b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-sam-bankman-fried-madoff-with-regulators\/#%E2%80%9CHow_Sam_Bankman-Fried_%E2%80%98Madoff_with_regulators%E2%80%9D\" >&#8220;How Sam Bankman-Fried &#8216;Madoff&#8217; with regulators&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-sam-bankman-fried-madoff-with-regulators\/#%E2%80%98Virtuous_Madoff\" >\u2018Virtuous\u2019 Madoff\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/how-sam-bankman-fried-madoff-with-regulators\/#Garys_%E2%80%98bro_meetings\" >Gary\u2019s \u2018bro\u2019 meetings\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CHow_Sam_Bankman-Fried_%E2%80%98Madoff_with_regulators%E2%80%9D\"><\/span>&#8220;How Sam Bankman-Fried &#8216;Madoff&#8217; with regulators&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/><\/div>\n<\/div>\n<\/aside>\n<p>To his credit, Securities and Exchange Commission chief Gary Gensler is arguing that the Sam Bankman-Fried crypto scandal doesn\u2019t mean we need more regulations to rein in digital-coin excess and fraud. Laws are on the books that give the current regulatory and legal system plenty of tools to prosecute bad actors. Plus theft has been illegal since the beginning of civilization.\u00a0<\/p>\n<p>But if our regulators are properly armed, how did the furry-haired alleged fraudster get away with something that could rival the wrongdoing of the notorious Bernie Madoff and his $65 billion Ponzi swindle?\u00a0<\/p>\n<p>To answer that question, you need to dissect how both Madoff and the dude known as SBF worked the regulatory <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>aratus \u2014 \u201ccapturing\u201d it, if you will, so that the inquiring minds in government didn\u2019t think it was worth their time to look into the duo\u2019s too-good-to-be-true dealings.\u00a0<\/p>\n<p>Yes, \u201cregulatory capture\u201d \u2014 that is, the industry having sway over regulators and not vice versa \u2014 is a real problem, and has been as the financial system has grown in size, wealth and power.\u00a0<\/p>\n<p>On one hand, the revolving door between financial business and government is inevitable. People who work for the SEC or DOJ have a knowledge base that could benefit Wall Street firms looking to avoid trouble. The flip side of all of this is when the regulators have an eye on making a lot of money when they decide to switch sides. That\u2019s when the toxicity of the arrangement often sets in. It\u2019s all too human to think the person you might want to work for, and your former colleagues work for, could never have committed fraud.\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-2-1.jpg?w=1024\" alt=\"Sam Bankman-Fried\" class=\"wp-image-25201333\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-2-1.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-2-1.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-2-1.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Sam Bankman-Fried was arrested in the Bahamas for on charges of defrauding investors out of $1.8 billion.<\/figcaption><figcaption><span class=\"credit\">Jeenah Moon\/REUTERS<\/span><\/figcaption><\/figure>\n<p>That\u2019s what went down with Madoff and SBF and the people who were supposed to be watching them.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"%E2%80%98Virtuous_Madoff\"><\/span>\u2018Virtuous\u2019 Madoff\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For years, Madoff was considered a virtuous member of the Wall Street club \u2014 and his access to the system of checks and balances to detect fraud was vast. He helped create the Nasdaq stock market, became a senior member of its self-regulatory organization. He and his firm partners worked in various capacities in the financial industry\u2019s main lobby group. Madoff and his family gave money to connected politicians with financial-system oversight responsibilities. His compliance officer, a niece, was married to an SEC official.\u00a0<\/p>\n<p>Madoff had a prominent market-making business and an investment fund that grew to enormous heights on paper \u2014 around $65 billion in alleged assets, making it one of the biggest private investment funds \u2014 yet it never generated much interest from the SEC because it had the Madoff name on it.\u00a0<\/p>\n<p>On paper, his investments produced implausibly stable returns in good markets and bad, eventually prompting a handful of securities-industry insiders to conclude that Bernie was a crook. Whistleblowers went to the SEC, which kicked the tires a bit but not enough.\u00a0<\/p>\n<p>The 2008 financial crisis, and Madoff\u2019s investors needing cash, exposed the fraud the SEC and the alphabet soup of watchdogs missed: Those returns were fictional and investor money was pilfered in a massive Ponzi scheme. Madoff died in prison after serving about 12 years of his 150-year sentence.\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-5.jpg?w=1024\" alt=\"Bernie Madoff\" class=\"wp-image-25201336\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-5.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-5.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-5.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Bernie Madoff is infamous for his $65 billion Ponzi scheme. <\/figcaption><figcaption><span class=\"credit\">Louis Lanzano\/AP<\/span><\/figcaption><\/figure>\n<p>Shades of Madoff can be seen throughout the SBF narrative as it relates to how Bankman-Fried worked the regulatory apparatus. SBF funneled money to pols with crypto oversight; hired people from crypto regulatory agencies such as the Commodity Futures Trading Commission to work at his FTX crypto exchange; wined and dined others.\u00a0<\/p>\n<p>His money to DC opened doors \u2014 even at the Biden White House (SBF was a major contributor to the president\u2019s 2020 campaign). He was also a favorite speaker before various committees in Congress looking to hear from the millennial crypto sage. Maxine Waters (D-Calif.), head of the House Financial Services Committee, appeared so impressed with SBF\u2019s knowledge of crypto that after hearing him speak, she blew him a kiss.\u00a0<\/p>\n<p>Like Madoff, there were a few SBF skeptics \u2014 particularly how he was seemingly thriving while others were getting crushed in the 2022 crypto correction. He ran an exchange and a hedge fund on the side, which is always a recipe for trouble when the hedge fund loses money and customer accounts can be fleeced.\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Garys_%E2%80%98bro_meetings\"><\/span>Gary\u2019s \u2018bro\u2019 meetings\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-1-1.jpg?w=1024\" alt=\"Sam Bankman-Fried \" class=\"wp-image-25201330\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-1-1.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-1-1.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-1-1.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>It was revealed that Bankman-Fried met with White House officials four times this past year. <\/figcaption><figcaption><span class=\"credit\">AbacaPress \/ Splash<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a>.com<\/span><\/figcaption><\/figure>\n<p>Gensler, the SEC chief, isn\u2019t the kissing type, but he met with SBF twice in less than six months \u2014 and not because he uncovered something shady.\u00a0<\/p>\n<p>Nearly up to the moment it was revealed that billions of dollars in customer money was taken from SBF\u2019s FTX crypto exchange and lost in his hedge fund\u2019s gambling, SBF continued to meet with supporters in Congress, his contacts at the CFTC and big investors, not to mention all those fawning \u00ad<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>-types.\u00a0<\/p>\n<p>Like Madoff, SBF is now likely heading to prison. The SEC\u2019s charging document lists SBF\u2019s impressive array of alleged wrongdoing, having a risk-taking hedge fund associated with customer money in an affiliated exchange, lack of controls, the alleged theft of customer money to trade with, etc., etc.\u00a0<\/p>\n<p>It\u2019s a vast, serious fraud that occurred right under the SEC\u2019s nose.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/12\/31\/how-sam-bankman-fried-madoff-with-regulators\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;How Sam Bankman-Fried &#8216;Madoff&#8217; with regulators&#8221; To his credit, Securities and Exchange Commission chief Gary Gensler is arguing that the Sam Bankman-Fried crypto scandal doesn\u2019t mean we need more regulations to rein in digital-coin excess and fraud. Laws are on the books that give the current regulatory and legal system plenty of tools to prosecute&#8230;<\/p>\n","protected":false},"author":1,"featured_media":533322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/12\/gaspo-comp-1-2.jpg?quality=75&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[135234,89897,137843,77869,118979],"class_list":["post-533321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ftx","tag-sam-bankman-fried","tag-12-31-22","tag-bernie-madoff","tag-gary-gensler"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/533321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=533321"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/533321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/533322"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=533321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=533321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=533321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}