Commentary: Madoff saga is a sorry one

This editorial appeared in The Fort Worth Star-Telegram.

Investors ranging from wealthy individuals to charities were once mad about Wall Street money manager Bernard Madoff — mad as in crazy about the guy — because of the stellar investment returns he produced for them.

Those investors continue to be mad about Madoff — but it's now a far different mad, as in angry and resentful.

As astonished Americans learn of the enormous damage wrought by the $50 billion Ponzi scheme that prosecutors say was perpetrated by Madoff, timeless aphorisms come to mind. They might be clichés, but that doesn't make them any less worthy in terms of lessons learned and relearned.

If it sounds too good to be true, it probably is. Investors enticed by the lure of exceptional double-digit returns year after year from Madoff's firm ignored this adage at their peril.

Don't put all your eggs in one basket. Some investors and longstanding charitable and humanitarian organizations entrusted virtually all their money to Madoff, rather than spreading the risk.

Don't leave the fox to guard the henhouse. While America wisely has shown faith in a capitalistic economic system and vigorous financial markets, effective government regulation is nevertheless needed to avert chicanery and fraud. Not everybody is honest, as victims in the Madoff debacle — cited by The Associated Press as "the biggest financial scam of all time"— now know oh so well.

To read the complete editorial, visit The Fort Worth Star-Telegram.