Earlier this week most of you said you didn't think Bernard Madoff acted alone in the $50 billion-plus Ponzi scheme. Well one New York Times reporter thinks he found the accomplices: the victims. In the article, Joe Nocera asks: what were they thinking?
Nocera thinks what happened to Madoff's investors was horrible, but he also points out that the first rule of personal finance is diversification. He wrote:
People lose it all because they start a company that turns out to be misguided, or because they do something that is risky, hoping to hit the jackpot. Taxpayers don’t bail them out, and they shouldn’t start now. Did the SEC foul up? You bet. But that doesn’t mean the investors themselves are off the hook. Investors blaming the SEC for their decision to give every last penny to Bernie Madoff is like a child blaming his mother for letting him start a fight while she wasn’t looking.
Removing Madoff from the equation, do you think some victims acted negligently by putting all their money in one place, or does most of the blame lie with the SEC?