| VCAM: September/October 2009 Newsletter | VOLUME 9 ISSUE 4 |
Bernie Madoff-The newest member of Dante's 9th Circle of Hell:
In Dante’s epic, Inferno, we follow Dante as he wanders fearfully through the darkness of hell’s 9 circles in order to arrive to an understanding of holiness, light, and forgiveness. In the opening of the novel, we learn that earth (the dark forest that leads to the sunshine of the mountain tops) is where souls struggle between light and dark, good and evil, and their choices on earth lead them either to Heaven or Hell.
According to Dante, the center of hell is bitterly cold where those of ice cold, greedy hearts and souls exist. Each circle of hell holds sinners that committed works of evil and each circle progressively holds souls that commit more heinous crimes. The First Circle holds minor offenders—mostly those in Limbo. By the time we reach circles 8 and 9, we see those that would be major violent offenders. Specifically the 8th circle of hell is full of those with evil pockets—the thieves and falsifiers. The 9th circle (the circle where Lucifer resides) is full of those who betrayed their kin, their country, and their benefactors. Judas and those who betrayed Julius Caesar are those submersed in the icy cold ring of hell’s center. Other examples for this circle could be those who stole and deceived from their employers, clients, and family.
According to Dante, those who steal, cheat, and betray are more socially offensive than murderers because thieves, cheaters, and betrayers violate the core of social and divine order.
I would imagine if Dante wrote about the circles of hell for the 21st century, Bernie Madoff would be alongside Judas.
Madoff, former Chairman of the NASDAQ stock exchange, is the operator of the largest investor fraud ever committed by a single person. Madoff admitted to defrauding thousands of investors of billions of dollars and confessed to operating the largest Ponzi scheme in history. Federal prosecutors estimated client losses, which included fabricated gains, of almost $65 billion.
Madoff, based on Dante’s definition, would be a thief, falsifier, and betrayer and obviously, a shoe in for both the 8th and 9th circles of Hell.
Greed has existed since the beginning of man. It is one of the seven deadly sins and a prominent sin in Dante’s circles of hell.
Greed doesn’t affect just the minds and lives of individuals; it has oozed itself into every crevice of society and, unfortunately, has become a cultural norm. Let’s not fool ourselves, people are no longer surprised to hear about public entities and officials lying and deceiving the public. We have become saturated with a culture engulfed with fraud, deception, stealing, and lies.
| I take personal offense when people like Madoff behave with flamboyant disregard to the principles and ethics that instill confidence into the very markets requiring trust and transparency to succeed. Whatever happened to fiduciary responsibility??? |
Madoff violated the holy grail of the financial world...the investor's and client’s needs must come first. The Prudent Man Rule directs fiduciaries to “to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of the capital to be invested” (www.wikipedia.com). Regardless of your profession, an individual responsible for the affairs of others must think unselfishly. Under the Investment Advisors Act of 1940, financial advisors must have a fiduciary responsibility to their investors/clients. A fiduciary responsibility is one where the advisor acts in good-faith, honesty, integrity, loyalty, confidentiality, and utmost care and service to the principal party. In other words, the advisor must have the best interest of the investor in mind. In Madoff’s case, he had a responsibility to his shareholders and employees and he violated his duty to practice to a higher professional ethical standard. This standard should also be held for an employee—they must have responsibility, loyalty, and respect for their employer’s philosophy and core business values, which in turn shows respect to the client.
| When someone entrusts you with their money, it’s expected that you will be honest and trustworthy. You must behave as a reasonable, prudent individual. Sheer respect for another individual's character is ordinarily insufficient for the creation of a fiduciary relationship. The obligation of a fiduciary includes loyalty and concern for the assets in custody. Even if the government didn’t establish a law that told advisors to be honest, wouldn’t your gut tell you it is wrong to hurt and steal from others? Whatever happened to common courtesy? Whatever happened to having pride in honestly serving others? |
We, at Valentine Capital, pride ourselves in establishing strong bonds and relationships with our clients. When you become a Valentine Capital client, you aren’t simply another account—you become a member of our family. We take our ethical, professional, and moral responsibility seriously. We have decided to be part of the light.
