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Bernie Madoff on Violating Rules (Video)

"It's Virtually Impossible to Violate Rules," Madoff Says in a 2007 Video Interview

At a conference in October of 2007, Bernard Madoff discusses regulation and algorithmic trading where he ironically states, "It's virtually impossible to violate rules in today's regulatory environment." Here is an excerpt from the interview where he talks about the Chinese walls—separating proprietary trading from trading for investors—that are carefully enforced. He also talks about how the general public thinks everyone is violating rules, but he contends the infractions are very small compared to the volumes of trades the market. This was well before it was uncovered that his firm, Bernard Madoff Investment Securities, was charge with fraud for creating a giant Ponzi scheme that allegedly lost $50 billion in investors' money.

Here is an excerpt from the video below, or watch it here.

"Chinese walls are required to be established at brokerage firms--or information barriers--to wall off a brokerage firm from taking advantage of information he has about clients trading. It is very carefully enforced and surveiled, it doesn't mean there aren't abuses for sure. But, by and large in today's regulatory environment, it's virtually impossible to violate rules. And this is something the general public doesn't understand. If you read things in the newspaper and you see someone violate a rule, you say, "You know they are always doing this.""

"It's impossible for a violation to go undetected, certainly not for a considerable amount of time. When you consider the volumes of trading... we trade in excess of one trillion dollars a year and that's one firm ...when you look at the scope of trading and you look at the infractions, they're relatively small primarily be of all the regulation. And most firms do try to comply with them."

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