At the exchange rates prevailing at the time, it seemed that Madoff had made off with £33 billion of private and professional investors’ money. It was a sum roughly equivalent to the total spent by the British government on defence in that year.
It was a Ponzi scheme. That means that the people who made off with the money were the early investors at the expense of the later ones. Madoff took a cut, sure, but the vast majority of the losses were paid out to investors.
Which is, of course, why the administrator went after those early investors and made them pay back their earnings….
Association with Madoff made hedge funds appear prone to the lowest forms of witless foolishness, instead of being staffed by brilliantly intuitive experts as had been widely assumed.
That’s good tho’.