When traveling biz class you get free movies in flight, plus earphones if you don’t have your own. On my recent flights to and from MSP, I watched two gems. The first was the HBO special “The Immortal Life of Henrietta Lacks” starring Oprah Winfrey as the daughter of the deceased cancer patient from which the HeLa research line of cells was taken. Henrietta Lacks was a poor black woman whose cells were harvested without her permission, and without any compensation — ever — for her family for the use of the cells. Pharma and health care companies, on the other hand, have made millions of dollars producing drugs based on the their research on the HeLa line. Many researchers don’t even know the name Henrietta Lacks — for them, it’s simply a very productive cell line on which to do their work of discovery.
The story is profoundly moving and troubling. I came away reminded what a fine actress Oprah Winfrey is.
The second film, also an HBO special, is the Bernie Madoff film “The Wizard of Lies”. The Madoff scandal has always driven me nuts. My late husband Jerry and I had a small securities operation as part of our overall fee based financial planning business. Because we were modest in size, we got the newest and least experienced SEC and NASD examiners, who showed up like clockwork about every 18 months. They scoured our client records and transactions for the slightest sign of deviance from the copious rule books were obliged to follow. Their goal, as I used to tell staff, was to find something wrong. The examiners would spend hours reviewing 25 case files, literally line by line, and find that all was in order. Rather than saying, “you do a good job following the rules”, they would tackle a 26th file, and perhaps find some minor failure of documentation. We’d be cited, have to take time to develop and submit a formal plan of correction, and we were then passed through until the next audit.
The Madoff operation was huge, and so should have drawn the best examiners. The entire Madoff business was a fraud, a sham, a Ponzi scheme. But no one on the examiner side seemed to notice. I simply don’t get it. What brought down Madoff was not the SEC or the NASD, but the failure of the Ponzi scheme to keep bringing in enough new money to cover withdrawals by existing clients.
Bernie lost 18M in client money in the fraud, and is in prison for a 150 year term. Both of his sons are dead, one by suicide and one of cancer. Ruth Madoff, who was allowed to keep 2.5 million of their assets, lives quietly in Old Greenwich, Connecticut.
And the securities biz rolls on.