Turns out that Bernie Madoff’s fraud took clients for more than what investigators originally claimed – $50 billion. Latest count is $64.8 billion  and it’s not clear that that’s the end. (Correction: I read that wrong. $64.8 is the figure alleged by prosecutors. Others say the statements are inflated and the actual losses might be less).

The new reports show things to be different from the picture the media originally gave us.

Now it looks as if Madoff didn’t promise just middling returns of 7-10% to everyone (which would imply that the scheme was believable and not on its face suspect).  The truth is he lured many people with promises of an incredible 46.5% returns that he claimed he generated through a technique called “split strike conversion” – a technique that was demonstrably incapable of providing such returns consistently.  In other words, fund managers, investors and regulators who had been doing their due diligence, would have known without difficulty that he was lyng through his teeth.

Now, this isn’t the first time this angle of the story has been reported, but it’s the first time the media has been willing to admit that Madoff’s scheme was an outrageous, flagrant fraud that went on for decades under the noses of the very people now writing the stories about it in righteous indignation (the New York Post, in this case). Regulators were told repeatedly by reliable people that Madoff was running a Ponzi scheme. Where were they?

Why do I bring all this up? To lay to rest the idea that more regulation (presumably by the same bunch of corrupt, incompetent, treacherous hacks in DC and New York) is going to help things.

More interesting details from the Post article:

* Contrary to early reports, the Madoff family and an inner circle of Madoff friends seem to be deeply involved with money laundered through “an English bank.”

* Wife Ruth is now “an object of investigation.”

* It seems that low-level employees were hired to create the appearance of a trading operation, with money even being moved from New York to Europe and back to bolster that impression (shades of Enron’s Potemkin office).