American Scandal

New episodes come out every Tuesday for free, with 1-week early access for Wondery+ subscribers.

Every scandal begins with a lie. But the truth will come out. And then comes the fallout and the outrage.

Scandals have shaped America since its founding. From business and politics to sports and society, we look on aghast as corruption, deceit and ambition bring down heroes and celebrities, politicians and moguls. And when the dust finally settles, we’re left to wonder: how did this happen? Where did they trip up, and who is to blame? From the creators of American History Tellers, Business Wars and Tides of History comes American Scandal, where we take you deep into the heart of America’s dark side to look at what drives someone to break the rules and what happens when they’re caught. Hosted by Lindsay Graham.

Bernie Madoff | Never Trust a Con Artist  | 4

Bernie Madoff | Never Trust a Con Artist | 4

Tue, 09 Mar 2021 10:00

Bernie Madoff conned some of the smartest people in the world, from savvy investors to famous artists. All the while, he deceived government regulators. So how did he fool so many people, and for so long? Diana Henriques is a journalist and author who's written extensively about Madoff. In this interview, she describes what made him such a successful con man. And she warns about the possibility of another Bernie Madoff.

Listen ad-free on Wondery+ here

Support us by supporting our sponsors!

See Privacy Policy at and California Privacy Notice at

Listen to Episode

Copyright © © 2018 Wondery, Inc.

Read Episode Transcript

From Wondry, I'm Lindsey Graham and this is American Scandal. Today we're wrapping up our series on Bernie Madoff. For decades, Madoff was considered a titan of Wall Street. He managed tens of billions of dollars in investments and was even chairman of the NASDAQ. Few others in the world of finance commanded as much respect and influence as Bernie Madoff. That's partly why in late 2008, the public was shocked to learn that Madoff was a conman. For years, he'd been running a massive Ponzi scheme. And after he was arrested and the scheme unraveled, Madoff's investors learned an even more shocking truth. Billions of dollars of their money were gone. The story of Bernie Madoff raised concerns about regulators and their relationship to the finance industry. But it also raised profound questions about conmen like Madoff. Investors and the public were left to wonder how Madoff managed to dop so many for so long. Today I'll speak with Diana Henriquez, who covered Wall Street and the Madoff case for the New York Times. Henriquez is also the author of the book, The Wizard of Lies, Bernie Madoff and the Death of Trust. While researching that book, she had the chance to interview Madoff in person. We'll talk about what Madoff was like and how he was able to exploit the trust of so many people. We'll also discuss the steps that officials are taking to protect us from the next Bernie Madoff. Our conversation is next. Peloton isn't just about bikes and treadmills. It's a team of instructors ready to motivate you 24-7. With Peloton, there are literally thousands of classes, ranging from strength training and yoga to running and boxing, which means Peloton is the perfect non-judgmental space to experiment with new types of movement, at a level in pace that feel good for you. Super busy, it doesn't matter if you have five minutes or an hour. If you're an early riser or a fan of the evening burn, there's a Peloton class that fits into your day. Peloton is where you'll find what works for you on your schedule wherever you happen to be. At home, at the gym, or even outdoors. Motivation that moves you, anytime, anywhere. Try the Peloton bike or tread risk-free for 30 days. Learn more at New members only, terms apply. If you're into true crime, the Generation Y podcast is essential listening. We started this podcast over 10 years ago to dissect some of the craziest and most notable murders, crimes, and conspiracy theories together, and we'd love for you to join us. Follow the Generation Y podcast on Amazon Music or wherever you listen to podcasts. Diana Henriquez, welcome to American Scandal. I'm delighted to be here, thanks. Well, for a lot of people, the news coverage of Bernie Madoff was the first time they heard the phrase Ponzi scheme. The concept, for some, can be hard to follow, because it's perhaps a bit outrageous. So could you perhaps just walk us through what a Ponzi scheme is and how it operates? Of course. It's easier to understand how it works if you call it by its old name. It's been called a Ponzi scheme since 1920, and honor off one of its great practitioners, Charles Ponzi, who was a con artist in Boston, who ran a nine month fraud in that city that year. But prior to that, the fraud had been around for, oh, decades and decades, when it was called a Peter-to-Paul scheme. After the old proverb, robbing Peter to pay Paul. And that's exactly what a Ponzi scheme is. The Ponzi Schemer robs his later investors to pay the promised returns to his earlier investors. And then robbs the investors who come in next to pay the returns to the second investors. So it's a constant robbing of Peter to pay Paul. And that is the essence of a Ponzi scheme. No real investing takes place. It is simply a transfer of money from later investors to early investors. And that's how you meet your promises to them. And presumably you're taking a cut all along the way. Yes. And the cut varies. It's always a bit of a risk to be greedy if you're a Ponzi Schemer, because the cash flow that you're getting from new investors is all the money you have to pay off old investors who might someday want to withdraw their money. And if you don't instantly cover that withdrawal, your fraud falls apart. That's ultimately what brought Bernie made off down. So you have to make very smart decisions about how much cash to keep in reserve to cover withdrawals from your investors. And how much you can slip into your own pocket or spend on rolls, voices or vintage Rolexes. The Ponzi schemes that have collapsed fast and furiously are those where the Ponzi Schemer got too greedy. And so we burned through the money people were giving him instead of using it to keep his promises to his earlier investors. And speaking about Bernie made off scheme in particular, what were the mechanics of it? How did it differ if at all from the mechanics you just described? It was what I think of as the modern Ponzi scheme. He really reinvented the Ponzi scheme in ways that we didn't fully understand until it was over. A classic Indisha of a Ponzi scheme is the sky high returns, you know, get rich quick, make money overnight. Those were the red flags that not only investors, but also regulators tended to look for to warn them that something might be a Ponzi scheme. Well, Bernie avoided that pitfall completely. His returns were always plausibly within the kinds of investments that affluent investors could expect from hedge funds or from other investors. So he was careful never to wave that red flag. He never gave these outrageously high returns that would have alerted people that something was wrong. That enabled him to solicit money from far more sophisticated and far wealthier investors than the typical Ponzi Schemer could hope for. The typical Ponzi Schemer with these sky high return promises is really left with the gullible investor, the unsophisticated investor, who's unless he's a sports figure sometimes or celebrity or someone who just won the lottery. There can be very unsophisticated about how to manage their money. They're not going to have a lot of money. So Ponzi schemes before Bernie made off tended to be relatively small. They tended to be constrained to the circle of people, the Ponzi Schemer knew and could persuade to invest with him or her. But Bernie re-indended the game. He kept the returns low enough to seem plausible to very wealthy investors to hedge fund managers, pension fund managers, people owned companies to retire chairman for Merrill Lynch, one of the best known Wall Street economists in the business, very sophisticated people. The simple fact that they were his investors gave comfort to the less sophisticated investors that they must know what was going on. So that was one of the big things that Bernie did differently. He kept the returns plausible. He also managed to keep the explanation for how he was getting those returns complex enough to be funneled even fairly sophisticated people. That wasn't as unusual, but it was certainly something that became increasingly useful as our marketplaces became more complex. The advantage of derivatives of options trading, the things that changed so dramatically in the early 90s for average investors like me, you'd look at Wall Street and say, I just don't understand this. I would say, that's okay, I do. I'll sort it out for you. So he was able to reassure people that he understood complex investments that they may not have understood completely themselves at a time when that world was changing very quickly. And just simply from a personality standpoint, made off was the anti-ponsy. He didn't show any of the personal characteristics or the behaviors that we have long associated with Ponzi schemers in history, who were typically flamboyant, larger than life characters, you know, telling jokes in the corner, buying drinks for everybody in the room. People who were certain to stand out and grab your attention. And Bernie did not strike anybody that way. He didn't seem to anybody to be a stereotypic Ponzi scheme, or they could not believe that he could be a crook because he didn't shit. And then, of course, in more recent years, as you so wisely point out, Ponzi schemes themselves fell out of attention. They were smaller, less visible in the news business. Those of us in the business press had much bigger stories to cover in the 90s and 2000s and certainly since the great meltdown in 2008. So a whole new generation of investors came along for whom Ponzi schemes were, as you said, ancient history if they'd heard it at all. So that gave madeoff access to a whole bunch of new people who didn't even know to be suspicious and even ask themselves, could this be a Ponzi scheme? So Ponzi schemes, as we know them, require a constant influx of new clients. If they don't show up, the game's over. You hinted at this that madeoff was the opposite of flashy, the opposite of what people peg as a con man. What else may Bernie made off so good at getting new clients? Well, bottom line, I think it would have to be his reputation on Wall Street. Now, I want to just quickly say that some shift the eye guy in a cheap suit with a terrible reputation can never run a Ponzi scheme. I mean, that's just impossible. Every Ponzi scheme or has to be able to cultivate the trust of other people, or they need to go into another line of crime, frankly. Bernie had a reputation that really, prior to his arrest, was darn near impeccable in a world where any brokerage firm is going to have a few, you know, blocks on its ledger. It's going to have a few difficult run ends with regulators. Bernie didn't. There was a huge price fixing scandal in Nasdaq stocks that hit Wall Street in 1998. And more than two dozen major Wall Street firms, household names were caught up in that litigation, the Justice Department sued 28 of them. They collectively paid nearly a billion dollars for fixing the prices on Nasdaq stocks. Bernie was one of the largest Nasdaq traders at the time and was one of the few who was not sued. So if you're a regulator in 1998, you could be forgiven for thinking that Bernie may not be one of the only honest Nasdaq traders on the street. So we can't dismiss the degree to which that reputation that he had with regulators with everybody on Wall Street, enabled him to open doors, to meet people, to be exposed to people who would be inclined to trust him. And that gave him access to this emerging community of hedge fund managers who began to collect around him in the early 90s, who themselves had credibility online. These were hedge funds connected with major banks, Bank of Centaur, with major brokerage firms, with major European investment funds. And when he started doing business with them, it exponentially increased the number of investors he could reach. I have said frequently that Bernie's was the first global Ponzi scheme and it was not because he was able to reach around the world, but because he was able to connect with people who could reach all around the world. Hello, I'm Florence Given, the best selling author of the book, Women Don't Are You Pretty and Girlcrush, and this is my podcast, exactly. Join me as I connect with fascinating guests from authors, cultural commentators, doctors, thought leaders to psychologist celebrities and comedians. And guess what? We're back to do it all again in season two with the likes of the holistic psychologist, Victoria Skohn and Iona David to name a few. Season two of exactly podcast out now wherever you get your podcasts. Now this character of Bernie made off you know if firsthand because you were one of the first riders who was able to visit made off after he went to prison. How was the man like in prison as a person? Well, I say I had actually known Bernie for 20 years before he was arrested. I knew Bernie from my days as a barren's reporter in the mid 1980s. Some of the strategies that his brokerage firm pioneered were very useful to reporters. He was one of the first progress on Wall Street to trade New York stock exchange stocks after the stock exchange closed. So back in those days trading wasn't 24 hours. It stopped when the bell rang on Wall Street, but trading continued after hours around the time zones through small firms like Burneys. So if you needed to know what had happened to Exxon when some oil refinery caught fire in Los Angeles, you'd call Bernie. So he was a source of mind for 20 years. I had known him very faintly, you know, seen him at conferences, talked with him and his brother Peter about issues of market structure as those were changing in the 1990s. And so he was in my role with Exxon. That's really the only reason I think that I was first to jump on the story when he was arrested. I recognize the name. He'd really been out of the headlines for at least a half dozen years, but I remembered him from those earlier stories and if you had an acquaintance with him and a much deeper acquaintance with his attorney, who was a former federal regulator, well known white collar defense lawyer. And I worked with in many other cases. He represented many other people that I had helped send the prison. So I knew him as a white collar crime reporter. He was already in my own book. So when he was arrested, I immediately started contacting his attorney to see if I could organize an interview that was out of the question until after he was sentenced. But once he arrived at prison, I continued to pursue the interview request. And he finally agreed in the summer of 2010. And I went through the bureau of prison ropes to get through to see him. And so I was seeing him there in prison in contrast to what he had been like in the wild. You know, I knew that the Bernie made off as a free man. And so then I met the Bernie made off as an inmate serving a life sentence. And what I think would strike most people was how incredibly normal he is. He seemed like you're someone's low key grandfather. But his prison guard was crisply pressed his breast belt buckle was beautifully polished his leather sneakers were shine. And he was still a dandy as he'd always been when he was in his normal environment. And as he always had, he worked at winning your confidence from the first syllable out of his mouth. He very deftly used these little small compliments to show you that he thought you were like the smartest person he'd ever met. He was so impressed with you. And I saw that little magic trick happening during the interview and didn't really quite take in how important it was until after I done the second interview with him. And then I began to see how he would have been able to use that gift of making the people he was talking to feel special and that he was so lucky to have met them. And then he thought they were so smart and so talented. I could see how that would have given him such immense power in terms of winning their trust. So he was still a dandy. He was still charming, but he was also still a charlatan. He pulled a fast one on you too. Tell us that story. Yes. He did. And you know, I can't blame him for it. I can only blame me. One of the terms that we had negotiated for this interview because Bernie was very concerned that talking with me in prison, not reignite the storm of tabloid coverage around his family. Finally, by the summer of 2010 started to calm down. You know, we've gotten to the point where his wife Ruth and his sons could leave their apartments without being, you know, absolutely assaulted by paparazzi. And he didn't want to re ignite that by giving a public interview. So his condition of talking to me was that I could only use the interview material for the book. I was writing. He believed in context that that would be less difficult for his family to deal with. I had discussed this demand with my editors at the times and they had agreed that I could do the interview under those circumstances. When we talked about it, I put to him, I said, Bernie, you're leaving me a little exposed here. You know, I'm barred by this agreement from printing anything out of this interview until my book comes out. But there's nothing to bar you from talking to other authors or reporters in the interval, which would allow them to scoop me in effect on this interview. And I'm sure you can understand what a problem that would be for me, Bernie. All, of course, he understood completely sympathetic understood completely and you wanted to be sure that my book would be the one where he would be heard speaking and telling his story. So of course, he would not talk to any other authors or reporters until my book came out. He even put it in writing, Lindsey put it in an email to me that this was our agreement. I would not use any the material from the interviews until the book came out. He would not speak with any other reporters until then. And I said, great, you know, don't ask me why I believe them. Do not ask me why I trusted him except he was such an exceptional con man. And I couldn't figure out why he would not keep that agreement. It seemed to me to be in his best interest to keep it. So I believed it. And when about my business, did the interview continued working on the book was about to go down for my second interview with him when I started hearing was first that there were there was a made off interview coming out that you know 60 minutes was being offered a reporter who had made off interview. I'm, you know, I go crazy. I call a few contacts close to Bernie and say, have you heard anything about this? And they said, no, but would it surprise you and betrayed you? And I had to say, well, I guess not actually, you know, I knew he was a liar when I made the agreement. So I confronted him when I got down to the prison and he admitted that yes, he had in fact done a telephone interview with the reporter and I'm holding the email in my hands, spluttering, I can barely speak to Bernie. And he said, well, he gave all kinds of explanations to try to exonerate himself, but the damage was done. I was able to engineer sort of a scoop saving device. We ran that interview the very next day in the New York Times. The interview he'd given by telephone to another reporter who didn't surface for years. So I managed to save myself, but I have to tell you, I felt so foolish for having trusted this man. I already knew he was a con man. I already knew he was a fraud and a liar, but I still trusted him. So yes, he never lost that skill he hasn't lost to this day. Well, one group in particular that didn't know already that he was a con man was the SEC Securities and Exchange Commission. They're the large federal agency that regulates financial markets. It's their job to be a watchdog for this kind of fraud. So how did they miss Bernie made off and his billions of dollars for so many years? Well, I'm not as harsh on the SEC as some people were at the time because I had as an amateur financial historian, I had been aware of the arc of the SEC's effectiveness over time. And since the Reagan years in the early 80s, it had really been squeezed for resources really almost put on starvation rations. The whole Washington obsession with deregulation meant that regulatory agencies were last in line for every bit of money that you could get out of the government. Moral had sunk. They were losing experience personnel, just hemorrhaging personnel who couldn't get raises at the SEC and could go to work at white collar all firms for twice or three times the money. So I was aware that the SEC at the time the made off scandal broke had been short changed for years in terms of having three sources and improved training and understanding of how to assess risks and so forth. That having been said, it is also true that this was the worst failure in the SEC's 70 plus of your history at that time. And the best explanation for it besides the shortage of resources was a failure of imagination. They simply could not imagine these young lawyers trying to handle these investigations simply could not imagine that a man like Bernie made off could be a crook. He didn't fit any of their stereotypes of a crook. He always seemed to have a plausible explanation for any questions that were raised about him. He was helpful to them on a dozen different issues where they were relying for advice from the street about how to handle problems and he had this sterling track record. And as it happened, a whistleblower who was trying to raise their suspicions about made off was just the opposite. He seemed squirrely and obsessive and paranoid and comparing him to Bernie made off the SEC just couldn't stretch far enough to imagine that this squirrely whistleblower could be right and Bernie made off could be a crook. There was an extensive investigation after made off was arrested into how the agency failed in this in this regard and it's heartbreaking to read really. And they were just made that phone call he would have been exposed. I have often said it was like watching the Titanic steer towards the iceberg and you keep wanting to say no make the call. And they didn't and they always had good explanations for why they hadn't pressed that step further. But in the end it was a devastating failure for them and obviously for the investors that they should have protected. In part one of their problems was just the one that you so wisely cited at the beginning of this conversation which was people forgotten about Ponzi schemes not one of the investigators the SEC marshal to look at Bernie made off had ever investigated the Ponzi scheme. And as it happened the whistleblower was telling the SEC that Bernie was running an extremely complex fraud he was citing all of these derivatives burning was allegedly using and all of these strategies burning was allegedly using and saying I'm the only one who can explain this to you because it's so complex. Well he was completely wrong about that to a Ponzi scheme is the simplest crime possible you know it's a liar with a bank account all you have to do is check to see if the assets are there. And that is the one thing the SEC never did. So this whistleblower he has some disadvantages then he's up against the sterling reputation of Bernie made off he's a bit of an odd duck himself and then has a theory of the crime that doesn't actually match up to the real crime eventually his whistle blowing gets heard and made off is investigated but whistleblowers in general seem to get ignored at the beginning of their whistle blowing. Why do our federal agencies that are entrusted with the duty to investigate potential fraud like this why are they so suspicious of these claims upfront. Well it must be said that some whistle blowing can be malicious on Wall Street in particular simple word that federal agency is investigating you can cause your stock price deployment in minutes and people can make money from back so there is a pernicious incentive in the world of money to use false accusations to profit from someone else's reputation. So it's not wrong for regulators to be initially suspicious although whistleblowers motives but that isn't what really happened here in large part there were some investigators at the SEC who did suspect that this whistleblower was just jealous of Bernie's success and that he had been unable to replicate it and so he was trying to tarnish Bernie. But fundamentally the problem that federal agencies confront is they receive more tips than they can possibly process one of the solitary consequences of the made off scandal was that the SEC really pulled up its socks about dealing with whistleblowers they launched a complete office of the whistleblower that was designed solely to receive. Access analyze and reach out to these tips to guide their investigations in return for which they paid the tipster about the bonus for any penalties that they were able to collect as a result of the tips to work and that that I think was a very promising consequence but it tells you how bad things were in the beginning Lindsey that a whistleblower's warnings could fall to the bottom of the in bottom. They could never be taken seriously they could be a scribe to malicious motives and just did not get taken seriously as they should have been so this whistleblower Harry Marka pull us he caught on to Bernie made off when he was unable to replicate made off gains in the markets his performance and you've mentioned that Bernie was smart to keep those gains small but still they were renowned for being good and consistent. Why didn't this give more people other than Marka pull us why didn't others grow suspicious or were there others that were suspicious. You know to great points there why didn't others grow suspicious well the key answer there is they were bonded by trust but Bernie always had the right answers if people would question him about the consistency of his returns you would point out that that was the beauty of the strategy was using. He was designing the returns to be consistent he was giving up some profits on the upside to avoid losses on the downside and the result was a much more consistent albeit not as profitable rate of returns so he would dismiss the consistency argument right away saying yes that's the point to be consistent if you want volatile returns go to the Magellan fund they're volatile enough so he was able to deflect those accusations and he was able to deflect those actions and he was able to do that. Those accusations about his consistency but as to you know whether they should have been suspicious there were some people who were suspicious and this is where the whistleblower question becomes so poignant really yes Harry Marka pull us didn't make a great impression on the SEC he he raised people's hackles he didn't explain things very clearly he was obviously suspicious of everybody. But if you had some people to back him up if it hadn't been just Harry saying you know you should take a look at Bernie if it had been others it might have one through and there were others there was an analyst with investment manager in Westchester County outside New York who had his suspicions but he didn't say anything he didn't report it to anybody that fund just quietly got its investors money out of made off fun. Before the crash came there was a very well known investment manager out on Long Island who had some money invested with some funds that were invested with made off they started to get a little antsy about it little worried about it and they started sending some emails around to within the asking questions well as luck would have it the SEC didn't email sweep of hedge funds that month and caught these warnings and I'm sure you know what I'm saying. And an SEC staffer went up to this big investment manager on long Island and said what's this about Bernie made off it says here in these emails that you have some questions about my not all no no they said no no no that was just like cop your party chatter we didn't really mean anything by that no no we we were just making this strategic decision to shift our money in a different direction we didn't pull it out because we had these suspicions about made off so they actually denied. That they had any doubts about so it was partly the fundamental plausibility of birdie made off being able to come up with answers to everybody's doubts and questions but it was also the unwillingness of the handful and less than the handful of other people who tweaked too early to report it. And I just didn't want to get involved somebody else's job to stop him will get our money safe and then who cares and so that failure of morality there's no other word for it to not be your brother's keeper on Wall Street that failure was part of what went wrong for a whistle blowing standpoint because if they had stepped forward if their voices had been added to Harry's voice I'm certain the outcome would have been different. You mentioned the fallout for the SEC was that they took a good long hard look at themselves I'm wondering what was the fallout for Wall Street it's been over 12 years since made off was arrested how is how is the street changed due to this fraud not enough in my opinion frankly there have been some procedural changes hedge funds that were under very light regulatory touch in the pre made off years are now subject to greater disclosure and greater regulatory. And that's a good thing a plus on the SEC side is they brought in people who were skilled at using computer modeling to identify investment returns that are out of the norm so that they'll kick out a fun manager who's returns don't make sense in larger context and that's allowed them to stop a few frauds prophylactically. But what hasn't changed on Wall Street is its attitude towards whistleblowers it is still justice fiercely hostile towards whistleblowers as it was in the pre made off days and so I think that's been the biggest disappointment I still don't see Wall Street that is anything but a hostile environment for those who try to blow whistle on bad behavior we know that Ponzi schemes are a chronic part of the world. The chronic part of the investor fraud landscape and the SEC does have some useful investor work items on its website if you just go to SEC dot gov and look for Ponzi schemes you'll also be able to come up with some helpful things I mean the key thing really is to not expect regulators to catch these guys there's a website called Ponzi tracker dot com that's one of my favorites and it keeps track of all the Ponzi schemes that surface in terms of size and size. In terms of size and scale and location and its data show that a new Ponzi scheme surfaces in the United States roughly every five to six days so it's a chronic problem I can guarantee you that we will have more Ponzi schemes whether they will be able to rise to the size and scale of Bernie's I think is less likely because of some changes that have occurred in how money managers have to keep track of the assets. They hold but Ponzi schemes are going to be with us forever because trust is with us forever and that's the only weapon a Ponzi scheme needs to go into operation is to be able to get people to trust him so yes we're going to have new Ponzi schemes we're going to have five new ones by the end of this month so that awareness means that people need to be vigilant about protecting themselves. From this chronic source of fraud as I said these are easy frauds to run all you need is a sterling reputation and a bank account and you can run a Ponzi scheme which means you are I probably qualify but that is only possible because people are inclined to trust one another their default position is this incredibly successful smart charitable person must be a good guy. Must be trust worthy and that's what we really need to address when we try to address Ponzi schemes you have to save yourself I look look I know I'm inclined to trust this person and therefore I'm not going to watch for the red flags that might show that this is a fraud and so I need to take steps to protect myself from my own trusting nature. And that's what I advise to investors everywhere is there's some simple steps you can insist that whoever manages your money uses a third party to hold the assets these are called third party custodians in the Wall Street world but it simply means a bank or a trust company that holds the certificates that holds the stocks and bonds that are supposedly being bought with your money. If you're dealing with a money manager who uses a third party custodian it's almost impossible for him to steal from you is almost impossible for him to be running a Ponzi scheme so that's a simple thing that investors can do but I think it should go a step further to none of us wants to live in a world without trust you know it's it's one of the most beautiful characteristics that humans are capable of it's essential to modern commerce it's essential to health. It's essential to healthy communities healthy relationships so we don't want to live with the world without trust but here's it here's the thing don't invest your money with people you blindly trust so don't invest your money with friends don't invest your money with family invest your money with people who are enough of a remove from you that you are not going to automatically trust what they do. That's the best way to protect yourself and no one really wants to hear that but it's true don't make money managers of your friends and don't make friends of your money managers keep them at a remove so that you'll remind yourself that you need to watch what they're doing you need to understand what's going on and that's really the best way to protect yourself. Diana Henriquez thank you so much for talking with me today I was delighted to be here thanks so much. That was my conversation with Diana Henriquez author of The Wizard of Lies as well as the upcoming book about the birth of Wall Street regulations next on American scandal in the 1950s America was gripped by a deep fear of communism one US senator found that by taking advantage of this fear he could gain prominence and political power Joseph McCarthy let a campaign to convince Americans that their government was under attack but as he grew more famous he would also make enemies so that they could be a better place. That's what makes enemies across the government including those who were determined to bring him down. From Wondry this is episode four of four of Bernie made off from American scandal in our next series in the 1950s America was gripped by a deep fear of communism one US senator found that by taking advantage of this fear he could gain prominence and power. Joseph McCartney let a campaign to convince Americans that their government was under attack but as he grew more famous he would also make enemies. American scandal was hosted edited and exeked produced by me Lindsey Graham for airship audio editing by Molly Bach music by Lindsey Graham this episode was produced by Susan ballot our senior producer is Gabe Riven. Executive producers are Stephanie Jen's Jamie Lauer Bachman and her non-Mopez for Wondry.