An interesting quote:
“He had a true concept of capitalism,” Bertrand de la Villehuchet, 74, said of his brother. “He felt responsible and he felt guilty. Today, in the financial world, there is no responsibility; no one wants to shoulder the blame.”
How very true. Everyone seems unwilling to accept responsibility, let alone blame, and many still want bonuses. The top dog on this line is Richard Fuld of Lehman Brothers, who put his firm out on a highly leveraged financial limb of risk, saw it collapse, saw other collapsing firms rescued, and could only wonder why Lehman had been allowed to fail.
Mr. de la Villehuchet, a French aristocrat and professional investor who lived in the New York suburbs, had put at least $1.4 billion of his and his clients’ money with Mr. Madoff. He had lost his entire savings. He was overwhelmed and depressed, according to people who had spoken to him. Worse, he felt personally responsible for the money his investors had lost, his brother Bertrand said in a phone interview in Paris this week.
It is not easy to feel bad for an aristocrat, automatically or on reflection, but on further reflection, it is possible.
Suicide is the most intimate of acts, and no one can know exactly what Mr. de la Villehuchet was thinking as he decided to take his own life. But the fraud weighed heavily on him. “It’s a complete nightmare,” he told a longtime client in Paris, less than a day before he died, according to the client.
Thinking of how he must have felt, knowing all the money was gone, is literally impressive: I can imagine the heart ache, the horror, the weight of responsibility.
In a note to his brother written shortly before his death, Mr. de la Villehuchet said that he needed to be held accountable for the losses, his brother said. “If you ruin your friends, your clients, you have to face the consequences,” Bertrand said, explaining what his brother believed.
That is having a sense of honor and of responsibility.
Mr. de la Villehuchet’s attitude appears to be rare. So far, the leading players in Mr. Madoff’s case have maintained a stony silence, studiously avoiding apologies or statements of responsibility.
It is rare. No one accepts any responsibility for the debacle. Hell, even Bernanke is busy fixing the mess he took a pert in creating, or at least in not dealing with much earlier.
Mr. Madoff’s sons have said nothing about how they could have worked at their father’s firm for decades without noticing that the money he supposedly managed did not exist. The accountants and regulators who were supposed to protect investors have not explained their failure to do so. And the hedge funds that invested tens of billions of dollars with Mr. Madoff despite obvious red flags have said the fraud was his fault, not theirs.
The hedge funds can wallow in their own mess. Regulators should be embarrassed and fired. The sons should be punished in some way.
A "feeder fund" advised by Villehuche's firm, Access International Advisors, called Leveraged Options Arbitrage Fund, had $500 million in assets ... and charged investors a management fee of 1 percent of assets annually and 15 percent of any profits the fund generated. Fairly typical, though I've read of funds charging 20% of profits. So this one made $5 million to start with, annually.
A second feeder fund, called LuxAlpha Sicav, had $1.4 billion in assets. It charged a 5 percent upfront fee, a management fee of 0.8 percent annually and a 16 percent performance fee. It is not clear if, or how, the two funds were related.
5% of $1.4 billion is $70 million, charged upfront; 0.8% is $11.22 million, annually.
At the end, it all ended tragically, and sadly. Villehuche is dead, by choice, feeling disgraced; Madoff is alive, the cad.
No comments:
Post a Comment