Before you try and suggest that the financial authorities are 100% competent, I would remind you that Bernie Madoff did in fact dupe many people for many years. Financial authorities included. In fact it was a non-governmental person who blew the whistle and starting the whole thing tumbling down.
So I'm not saying that it's rampant and everyone is looking the other way. But it's definitely a possibility. What people are SUPPOSED to do and what they ACTUALLY do often don't overlap anywhere near enough.
Government always are full of con people who take advantage of weak laws, strong lobbyists and lots of money being spread around. Regulators (or even tax agencies) are weakened by politicians who want to enrich themselves, and everyone hopes it's the next person that gets caught. Bernie Madoff got away with his fakery for an eternity. These folks almost got away with it too (one is still on the lam). You have to have watchers (and someone to watch them, and hopefully a press that also watches).
That seems unlikely - this is too blatant and, as we saw with Madoff, mismanaging your clients money tends to be taken more seriously than some other white-collar crimes.
On the one hand, I just can not believe that someone would be audacious enough to try such a scam, when there is such a relatively huge amount of people with their eyes on this. On the other hand history has shown us that this happens A LOT. Human nature is a funny thing.
I re-read the article and you're right. The article seems to imply Madoff as an exception rather than the common case, but I still feel that if data is being manipulated at such a vast scale where an entire countries economic activity is misrepresented, you will be able to find people as smart as Madoff to 'fit' the data as per requirements.
Madoff was a product of the artificially low interest rates established by the US Fed, causing people to participate in all sorts of risky schemes to see some investment returns. So yes, one could argue that the Fed "succeeded" at creating lots of bubbles and fueling lots of scams in recent history, though the details of the situation are of course a lot more complicated.
These people generally work with clients that can move lots of money. If somebody who knew that Madoff was running a ponzi scheme democratized access to his fund by marketing the fund to small fish, collecting money from them, taking a management fee, and investing the remaining amount with Madoff, we would seriously question their ethics. Coinbase, Robinhood, and now Wealthfront seem to be getting away with the same thing without criticism.
Just because you know the identity of an individual, doesn't mean they are trustworthy. They might be compromised, or they might be willfully doing it for their own personal gain, regardless of their existing reputation (or even, leveraging their existing reputation - bernie madoff was a well known and well respected investment banker).
Just because you cannot see the mastermind doesn't mean that there isn't someone pulling strings. And the Madoff scam wasn't a single person. There were lots of naïve participants/benefiters enjoying the profits of that scam. In that sense it is a parallel to gamestop: A small cadre of people influencing things, and lots of little people participating in what they should reasonably understand to be a pyramid. The situation has Fyre written all over it..
So I'm not saying that it's rampant and everyone is looking the other way. But it's definitely a possibility. What people are SUPPOSED to do and what they ACTUALLY do often don't overlap anywhere near enough.
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