Amanpour and Company

>>> THE PONZI SCHEME ORCHESTRATED BY THE INFAMOUS AND DECEASED BERNIE MADOFF. JOE TURNED HIS CAMERA TO THE CRIME THAT SHOOK AMERICA AND REVEALING DETAILS, NEVER BEFORE SEEN FOOTAGE FOR A NETFLIX DOCUMENTARY CALLED "MADOFF THE MONSTER OF WALL STREET". >> TO LOSE YOUR LIFE SAVINGS AND YOUR HOUSE IS TERRIBLE. >> ONE THING, EVERYBODY IN THE INDUSTRY, GREEDY. >> TRUST. BETRAYAL. PURE EVIL. >> THE DIRECTOR TALKED TO HARRY ABOUT THE FILM AND WHY IT'S ABOUT MORE THAN JUST ONE MAN. >> CHRISTIANE, THANKS. JOE, THANKS FOR JOINING US. FIRST QUESTION, THERE ARE SO MANY BOOKS WRITTEN ABOUT BERNIE MADOFF AND WHAT HAPPENED. THERE ARE INVESTIGATIONS DONE. WHY CHOOSE THIS PERSON AND WHAT HE DID AS A TOPIC FOR A FOUR-PART SERIES? >> GREAT QUESTION. BERNIE OVER THE YEARS AND PARTICULARLY IN THE INITIAL REPORTING HAS AND WAS THIS INCREDIBLE EVIL GENIUS THAT DID SOMETHING SO COMPLEX AND PULLED THE WOOL OVER WALL STREET'S EYES FOR DECADES AND THE TRUTH IS WHAT HE DID WASN'T SO COMPLEX. SIMPLE GREED CAUSED PEOPLE TO NOT ASK THE RIGHT QUESTIONS AND WE SEE A BIG FRAUD AND SAME INGREDIENTS COME INTO PLAY. VERY SIMPLE. YOU HAVE REGULATORS ASLEEP AT THE WHEEL, THE FAILURE OF THE SCC HERE WAS MIND BOGGLING AND PEOPLE WHO KNOW BETTER. NOT THE MOM AND POP BUT SOPHISTICATED MIDDLEMEN THAT TOOK PEOPLE'S MONEY AND GAVE IT TO BERNIE SHOULD HAVE KNOWN BETTER. THE RED FLAGS WERE ABUN -- ABUNDANT AND WE SEE THIS WITH ENRON AND SAM BANKMAN-FRIED AND THE SIMILAR SEEDS OF FRAUD WHICH IS PEOPLE SO GREEDY, NOT THE VICTIMS BUT THE MIDDLEMEN WHO JUST DON'T WANT TO INQUIRE BECAUSE THEY'RE MAKING TOO MUCH MONEY AND YOU SEE REGULATORS NOT DOING THEIR JOB. THE REGULATORS ARE GREAT TO COME WANT THEM TO SPOT IT BEFORE IT BECOMES A MESS. >> MOST PEOPLE WON'T KNOW THE HISTORY OF BERNIE MADOFF AND THE FIRST EPISODE GOES BACK INTO A PIVOTAL MOMENT IN HIS LIFE WHERE HE KIND OF HAD A CHOICE TO MAKE AFTER A FINANCIAL CRISIS BACK THEN AND THE -- ONE OF THE JOURNALISTS THAT LOOKED INTO HIS LIFE I THINK HER QUOTE WAS THE CHOICE HE MADE IS HE COULD LIVE WITH HIMSELF AS A LIAR MORE EASILY THAN A FAILURE. WHAT DID BERNIE MADOFF DO BACK THEN THAT WAS AN INDICATOR PERHAPS FOR THE REST OF HIS LIFE? >> POOR KID FROM QUEENS WHO LOOK AID CROSS THE RIVER WANTED TO BE IN THE ACTION OF WALL STREET IN THE EARLY 60s DECIDES TO OPEN UP HIS OWN FIRM. HIS FATHER IN LAW IS AN ACCOUNTANT AND STARTS FEEDING HIM CLIENTS TO MANAGE MONEY AND HE INVESTED IN RISKY STOCKS IN THE EARLY '60s. THERE WAS A BIG MARKET CRASH IN 1962 AND HE WAS WIPED OUT AND IT WAS $30,000 FOR A KID IN HIS 20s AND EARLY 60s, THAT'S A LOT OF MONEY. INSTEAD OF TELLING CLIENTS HEY LIKE EVERYBODY ELSE IN THE MARKET, WE LOST YOUR MONEY. HE BORROWED $30,000 FROM HIS FATHER IN LAW AND GAVE IT TO HIS CLIENTS AND SAID HE GOT OUT JUST IN TIME AND LOOKED LIKE A GENIUS AND THAT STARTED HIS REPUTATION AND MADE THAT FUND FUNDAMENTAL DECISION HE WOULDN'T BE A FAILURE LIKE HIS FATHER. HE WAS A FINANCIAL INNOVATOR IF HE HAD JUST FOCUSED ON HIS LEGITIMATE BUSINESS, WHICH WAS MARKET MAKING, HE POPULARIZED ELECTRONIC TRADING AND HELPED CREATE THE NASDAQ SO HE IS AN INNOVATOR AND SMART GUY WITH A LEGITIMATE BUSINESS. WHY HE FELT THE NEED TO MANAGE MONEY SECRETLY AT FIRST ON THE SIDE AND CREATE THIS PONZI SCHEME IS A MYSTERY NOT EVEN THE SHOW ANSWERS. NOBODY KNOWS WHY HE WOULD DO THAT. >> YEAH, BECAUSE AS YOU'RE WATCHING THIS, YOU ALMOST SEE THIS JEKYLL AND HYDE QUALITY AND WONDER LIKE IS THIS THE SAME GUY IN THE SAME PLACE? HE HAS A LEGITIMATE BUSINESS ON THE 19th FLOOR AND ILLEGITIMATE PONZI SCHEME ON THE 17th FLOOR. THE STAFFS DON'T INTERACT. PEOPLE DON'T KNOW WHAT IS GOING ON ON EITHER SIDE. ON THE ONE HAND HE'S HANDING OUT BIG CHECKS TO PHILANTHROPY AND ON THE OTHER HAND, HE'S ROBBING PEOPLE. >> HE'S TAKING WIDOWS' EVERY DIME. THAT'S A GREAT TRAGEDY. PEOPLE WERE SO BLINDED BY HIS PERSONALITY THEY GAVE HIM EVERYTHING. YOU KNOW, ONE OF THE BASIC RULES OF INVESTING IS DIVERSIFY. DON'T PUT YOUR EGGS IN ONE BASKET. SO PEOPLE PUT IN 10 OR 20% OF THEIR MONEY WITH BERNIE AND LOST IT ALL, THEY STILL WOULD BE OKAY LIKE ANY INVESTMENT THAT GOES BAD BUT PEOPLE GAVE THEM THEIR LIFE SAVINGS. ELLIE AND MOM AND POPS ACROSS AMERICA. IT'S TRAGIC BUT IT'S INTERESTING. THE LAST COUPLE YEARS I'VE BEEN DOING SHOWS ABOUT SERIAL KILLERS, LITERALLY SERIAL KILLERS, JEFFREY DOMER AND TED BUNDY. HE HAS THE SAME QUALITIES. LACK OF EMPATHY. YOU CAN'T LOOK A WIDOW IN THE EYE AND TAKE THEIR MONEY AND SAY YOU'RE GOING TO TAKE CARE OF THEM AND WIPE THEM OUT. THERE SAY LACK OF EMPATHY. THERE IS A DELUSION SOMEHOW IT WILL WORK OUT BECAUSE I DON'T THINK BERNIE THOUGHT IT WOULD ALL BLOW UP. IN FACT, ONE OF THE SCARIEST PARTS OF THE STORY IS THE FACT THAT I DON'T THINK HE WOULD HAVE BEEN CAUGHT HAD THERE NOT BEEN A ONCE IN IS CENTURY BLACK SWAN EVENT CALLED THE FINANCIAL CRISIS WHERE EVERYONE WAS CALLING IN CHIPS WHEREVER THEY COULD AND MADE THE PONZI SCHEME IMPOSSIBLE TO SUSTAIN BECAUSE A PONZI SCHEME DEPENDS ON MORE MONEY COMING IN THAN GOING OUT. HE HAS ALL THESE QUALITIES OF A SERIAL KILLER. LACK OF EMPATHY, BLAMING OF THE VICTIMS AND YOU SEE IN THE DEPOSITION HE BLAMED HIS VICTIMS FOR THEIR GREED AS OPPOSED TO SAYING HEY, I DID SOMETHING HORRIBLE. >> I ADMITTED TO DOING ENOUGH THINGS THAT WERE TOTALLY EMBARRASSING BUT THIS IS MY OWN DOING. NO ONE HAD A GUN TO MY HEAD. YOU HAD TO UNDERSTAND UNLESS YOU KNEW ME AND YOU KNEW MY RELATIONSHIP WITH THESE PEOPLE, MY FOUR BIG CLIENTS BEING THE GREEDY PEOPLE THEY WERE NEVER WANTED TO CLOSE OUT THE TRANSACTION. >> YOU KNOW, THAT'S SOMETHING THAT I DON'T THINK MOST PEOPLE HAVE SEEN IS BERNIE MADOFF IN DEPOSITION. HOW DID YOU GET THAT? >> THAT'S INCREDIBLE FOOTAGE AND SO EYE OPENING INTO HIS MIND. AND JUST LISTENING TO HIM MATTER OF FAJTLY DESCRIBE THE PONZI SCHEME. THERE WAS A LOT OF VICTIM LAWSUITS RELATED TO THE CLAW BACK WHEN EVERYTHING WENT SOUTH, LOTS OF PEOPLE LOST A LOT OF MONEY BUT THERE WERE PEOPLE WHO ACTUALLY TAKEN MORE MONEY OUT THAN HAD PUT IN SO THEY WERE NET WINNERS OVER THE YEARS, WHICH WAS THE PHRASE USED SO BECAUSE THEY COULDN'T HAVE PAID ALL OF THESE CLAIMS, THEY HIRED A TRUSTEE TO OVERSEE THIS PROCESS. KIND OF GETTING, FIGURING OUT WHO SHOULD GET WHAT MONEY, BASICALLY WHAT MONEY COULD BE RECOVERED HAD TO BE MOVED AROUND. AND EQUALIZE THINGS FOR THE LOSERS AND THAT PUT A LOT OF PEOPLE IN A VERY POOR POSITION SO THERE WAS AN ATTORNEY HELEN THAT REPRESENTED VICTIMS AND DEPOSED BERNIE AND I REACHED OUT FOR AN INTERVIEW AND SHE WAS GRACIOUS ENOUGH TO LET US USE IT. WE HAVEN'T SEEN BERNIE TALKING SO FROM PRISON SO FOURTH RIGHTLY ABOUT WHAT HE DID. >> KIND OF EXPLAIN THE CLAW BACKS FOR PEOPLE WHO HAVEN'T BEEN FOLLOWING THIS. WERE PEOPLE WHO INVESTED WITH BERNIE MADOFF MADE WHOLE? DID THEY GET KIND OF TEN SENTS ON THE DOLLAR, HALF THE MONEY BACK? HAPPENED? >> WELL, THE ON PAPER $64 BILLION BECAUSE THEY THOUGHT THOSE INVESTMENTS HAD WENT TO $64 BILLION. IN REALITY, IT WAS A $19 BILLION HAD BEEN INVESTED. IRVING AS THE TRUSTEE TO TRY TO FIGURE OUT WHERE THE $19 BILLION IS AND HE WAS ABLE TO RECOVER 14 OF THE $19 BILLION AND THE PROBLEM IS A LOT OF MONEY WENT FROM INDIVIDUAL INVESTORS BECAUSE THEY HAD TAKEN OUT MORE THAN THEY PUT IN AND THAT MONEY WAS TRANSFERRED TO INSTITUTIONS THAT LOST MONEY. IT WAS KIND OF LIKE A REVERSE PONZI SCHEME. MONEY FROM ONE GROUP OF INVESTORS TRANSFERRED TO ANOTHER. SOME PEOPLE, YOU KNOW, GOT THEIR MONEY BACK BUT RELYING ON THE FUNDS AND PAYING TAXES ON IT. IF YOU GET BACK AN INITIAL INVESTMENT, THAT DOESN'T MEAN YOU WEREN'T WIPED OUT. >> LET'S TALK A LITTLE BIT ABOUT THE ROLE OF THE REGULATORS THROUGHOUT THIS FAILURE. THROUGHOUT THIS FILM, YOU POINT OUT THE NUMBER OF TIMES BERNIE MADOFF CAME SO CLOSE TO BEING DONE AND THE WATCHDOGS WHO ARE SUPPOSED TO KNOW BETTER THAN US AND SUPPOSED TO -- WHO DO HAVE BETTER ACCESS THAN US WHO CAN ASK ANY QUESTION AND SUPPOSEDLY GET ANY ANSWER TIME AND TIME AND TIME AGAIN IT'S FRUSTRATING TO WATCH. >> THIS IS THE MAIN REASON I WANTED TO DO THE SHOW AND EMPHASIZE IS THE UTTER FAILURE FAILURE OF THE REGULATORS. THERE WERE SO MANY RED FLAGS AND OPPORTUNITIES TO BRING THIS TO A HEAD MUCH EARLIER. YOU KNOW, THE HERO OF THE STORY IS HARRY WHO IS A PORTFOLIO MANAGER IN BOSTON BUT HE'S A MATHEMATICIAN AND HIS JOB IS TO CREATE NEW PRODUCTS AND HE LOOKED AT THE BROCHURE FOR BERNIE AND WITHIN FOUR MINUTES KNEW SOMETHING WAS WRONG AND TOLD HIS COLLEAGUE THIS COULD BE A PONZI SCHEME. AND BECAUSE AS HE SAID, THEY WANTED TO THROW THE DIRTY PLAYER OFF THE FIELD. YOU CAN'T COMPETE WITH SOMEBODY WHO IS CHEATING. SO HE WROTE A CORRESPONDENCE TO THE SCC LAYING OUT 29 OR 30 RED FLAGS WHY THIS SHOULD BE LOOKED INTO FOR EXAMPLE, YOU KNOW, HIS BERNIE'S RETURNS WERE A STRAIGHT LINE UP EVERY YEAR MAKING MONEY THAT IS IMPOSSIBLE TO FINANCE. HIS STRATEGY HE USED A CERTAIN OPTIONS STRATEGY THAT WOULD HAVE IF YOU BELIEVED THAT HE WAS USING THAT STRATEGY, IT WOULD HAVE REQUIRED MORE OPTION CONTRACTS TO EXECUTE THOSE RETURNS AND THAT STRATEGY, IT WOULD HAVE REQUIRED MORE OPTIONS THAN OUR INEXISTENCE IN THE UNIVERSE OF THE ONE EXCHANGE IN CHICAGO THAT TRADES THOSE OPTIONS. SO THE RED FLAGS WERE ABUNDANT AND TIME AND TIME AGAIN, HE WENT TO THEM FIVE TIMES OVER EIGHT YEARSPLETELY IGNORED. >> I THINK YOU DID A GOOD JOB F TRYING TO HUMANIZE SOME OF THE VICTIMS BECAUSE WHEN THE INITIAL NEWS CAME OUT ABOUT IT BESIDES THE HIGH PROFILE CELEBRITIES LIKE RICH PEOPLE LOSING MONEY ON A PONZI SCHEME, YOU FIND PEOPLE WHO MADE THE MISTAKE OF IN SOMETIMES TRUSTING THE WATCHDOGS THAT SHOULD HAVE BEEN HELPING THEM AND LOOKING OUT FOR THEM AS CONSUMERS AND ARE SUFFERING BECAUSE OF THE BAD DECISION TO PLACE FAITH IN BERNIE. >> THAT'S A GREAT POINT. HE REALLY WIPED OUT A LOT OF REGULAR PEOPLE AND I THINK THE STORY WAS MISREPORTED AND PEOPLE WANTED OUT SIZED RETURNS. THE PEOPLE THAT WANTED THE OUT SIZED RETURNS WERE THE MIDDLEMEN TAKING MONEY FROM REGULAR PEOPLE LIKE A FAIRFIELD FEEDER FUND. THOSE PEOPLE WERE GREEDY AND GETTING OUT SIZED RETURNS IN TERMS OF FEES BUT THE REGULAR MOM AND POPS INVESTING WENT TO BERNIE BECAUSE IT WAS CONSERVATIVE WITH REGULAR BUT CONSERVATIVE GAINS AND BELIEVED OR TRUSTED BERNIE DIRECTLY OR THE PEOPLE THEY WERE GIVING THEIR MONEY TO AND THEY WERE COMPLETELY WIPED OUT. I WANTED TO REALLY FOCUS ON SOME OF THESE VICTIMS' STORIES JUST TO KIND OF DISPEL THAT MYTH. >> THE LAST EPISODE IS SOMETIMES DIFFICULT TO WATCH BECAUSE THERE ARE SO MANY ALMOST KIND OF SHAKESPEARE ELEMENTS TO IT. HERE IS A GUY WHO COULDN'T BE HIGHER THAN HIGH ON WALL STREET AND LIFE, REDUCED DOWN, HIS CHILDREN, HIS WIFE AND WHAT THEY GO THROUGH AFTER THIS. >> MARK AND ANDREW TAKE THEM BACK TO THE PENALTY HOUSE IN MIDTOWN. RUTH IS THERE. AND THIS IS THE FIRST TIME THAT BERNIE COMES CLEAN. >> I WAS A MENTAL STATE I COULD NO LONGER CONTINUE SO IT WAS ALMOST LIKE A RELIEF TO SAY THIS IS IT. I CAN'T CONTINUE THIS CHARADE ANY LONGER AND THAT WAS WHAT WAS ME TO ACRE KNOWLEDGE TO MY FAMILY THAT I HAD BECOME MITTING THIS FRAUD. >> YEAH. IT'S A SHAKESPEARE TRAGEDY OF EPIC PROPORTIONS. YOU HAVE A GUY ON WALL STREET WHO ACTUALLY DID SOME GREAT THINGS. AGAIN, THE CREATION OF THE NASDAQ WHICH WAS A BUNCH OF LITTLE OPAQUE STOCK MARKETS AROUND THE COUNTRY NOW NASDAQ IS, YOU KNOW, THAT'S WHERE GOOGLE, MICROSOFT, APPLE TRADE UPON AND THE GENERAL DEMOCRACY OF MARKETS THROUGH ELECTRONIC TRADING IS AN INCREDIBLE ACHIEVEMENT AND HE WOULD HAVE BEEN A WEALTHY MAN HAD HE JUST DONE THAT AND -- BUT HE NEEDED MORE. HE NEEDED TO BE THE GUY THAT EVERYONE LOOKS UP TO AND FOR THAT FEELING OF IMPORTANCE, HE SOLD OUT HIS SOUL AND HIS FAMILY. YOU KNOW, A LOT OF PEOPLE WONDERED WHETHER THE BROTHERS KNEW THERE IS NOTHING I FOUND THAT WOULD SUGGEST THEY KNEW. I DO THINK THEY SHOULD HAVE KNOWN BETTER. THEY WERE PRINCIPLES OF A COMPANY AND SHOULD HAVE PUSHED HARDER BUT THERE WAS, YOU KNOW, A WALL THAT BERNIE PUT UP AND DIDN'T ALLOW THE DEPARTMENTS TO TALK TO EACH OTHER. AND SOME HAVE SPECULATED WELL, RUTH MUST HAVE KNOWN. I DON'T THINK SHE DID. IMAGINE FINDING OUT EVERYTHING YOU BELIEVED WAS TRUE IS FALSE AND HAVING ALL HER FUNDS TAKEN AWAY FROM HER. HER SON, MARK, COMMITTED SUICIDE ON THE TWO YEAR ANNIVERSARY OF BERNIE ADMITTING TO THE PONZI SCHEME AS AN F-YOU TO, YOU KNOW, HIS FATHER, ANDREW, THE OTHER BROTHER AND HAD CANCER PRIOR TO THE PONZI SCHEME BEING REVEALED BUT IT WAS IN REMISSION, THE STRESS OF THAT CANCER CLAIMED HIS LIFE A FEW YEARS LATER AND SO RUTH, YOU KNOW, WE TRIED TO REACH OUT TO HIM MULTIPLE TIMES. TRIED TO GET HER TO BE INVOLVED IN THE SHOW BUT SHE DIDN'T WANT TO. WE ACTUALLY DIDN'T EVEN GET A RESPONSE BACK. BUT I WOULD HAVE LOVED HER POV IN THE SHOW. BUT SHE IS ALL ALONE. SHE'S LOST HER TWO SONS, HER HUSBAND, SHE'S, YOU KNOW, AND THE WHOLE HOUSE OF CARDS CAME TUMBLING DOWN, IT'S TRAGIC. >> THE SERIES IS CALLED "MADOFF THE MONSTER OF WALL STREET "TRENDING ON NETFLIX ALL OVER THE WORLD. THANKS FOR JOINING US. >> THANK YOU SO MUCH. GREAT TO BE HERE.