Kevin Bacon talks about investing in Bernie Madoff’s Ponzi scheme

0

Actor Kevin Bacon is not far removed from the infamous fraudster Bernie Madoff. In an episode of the SmartLess podcast, hosted by Jason Batemen, Will Arnett and Sean Hayes, Bacon described how he and his wife Kyra Sedgwick lost a large sum to Madoff’s pyramid scheme.

“We had most of our money in Madoff,” he said.

Bacon added that he was angry about the fallout from his investment, but that he and Sedgwick also had a cooling off period. “When something like this happens, you look at yourself and you’re like, ‘Well, this sucks, let’s roll up our sleeves and get to work.'”

Madoff ran the biggest Ponzi scheme on record, a fraudulent enterprise that targeted up to 37,000 people over a 40-year period and ultimately stole $65 billion in total.

In hindsight, red flags are often spread with any fraudulent scheme. “The financial mechanisms behind the scammer’s money-making scheme are always secret or difficult to verify,” said professor and author Tamar Frankel. Fortune. “There is still a whiff of illegality, lingering but subtle enough that people are willing to ignore it in order to get financial returns.”

Madoff’s Ponzi scheme is structurally different from a pyramid scheme in that it is more about investment than involvement. But pyramid schemes have the same gut feeling that something is wrong, which is often overlooked due to optimism or simply bad luck. And then there are multi-level marketing (MLM) schemes, which pyramid schemes can turn into, the difference being that there is no real product or business venture in a pyramid scheme. Even if an MLM is legit, it may not be what is promised.

“MLMs (multilevel marketing systems) basically tackle extreme versions of values ​​that all Americans learn to have ideas of meritocracy and priming, perseverance and progress,” Amanda Montell, author of Cult: the language of fanaticismTold Fortune. Tied to stories of self-improvement and the idea that the American dream is available to those who work hard enough, they focus on hope, she adds.

During tough times, fraudulent schemes erupt like wildfire. When the pandemic began, the Securities and Exchange Commission warned individuals to be on the lookout for other get-rich-quick schemes. Consider crypto hedge fund Three Arrows Capital, which research firm FS Insight has called an “old-school Madoff-style Ponzi scheme.”

Whether it’s an Instagram scam or as wide a web as Madoff, it can be essential to think critically about an investment or involvement before diving in, even if you’re struggling. keep up with the cost of living.

In retrospect, Bacon recognized the warning signs. “There are some obvious life lessons there,” he said. “If something is too good to be true, it’s too good to be true.”

Although he lost money, Bacon was able to recover some of it and acknowledges that he was not as hard hit as other more vulnerable people, such as those who lost all of their savings. retirement. “There will always be someone who is much worse than you,” he said, adding. “People won’t be happy to hear me whine about money.”

But on rare occasions, we can learn a thing or two from the stars.

Sign up for the Makeshift Features mailing list so you don’t miss our biggest features, exclusive interviews and surveys.

Share.

Comments are closed.