Mort Zuckerman: "Madoff Is A Sociopath"



(image via observer)

McLaughlin Group regular, owner of the New York Daily News and US News & World Report and Madoff victim Mort Zuckerman is no longer holding back on his thoughts on the Ponzi schemer. "Madoff is a sociopath," he told Bloomberg's Greg Miles. He told Miles that he thought his charitable trust was investing in a more diversified

Miles: -- That's what he told you.

Zuckerman: Yes, Ezra Merkin. We had many conversations in which this was discussed and restated over and over again, he reassured me -- and many people, I wasn't the only one -- and he's being sued by just about everybody, he told them all the same thing, I mean Yeshiva University, NYU, all of these people who invested through him and found out, as did I, only after the fact, that he had invested the entire fund of Ascot, 1 billion and 800 million dollars, with Madoff. Now -- there was no diversification in that case. (Ezra) was getting a $27 million management fee for nothing.

Miles: He told you one thing and he did another.

Zuckerman: That is why he is being sued. Everybody does a certain amount of due diligence, but if someone lies and misrepresents to you .. you have to deal with it another way.

Miles: Let me clarify: Are you suing him to get the fees back for allegedly not managing the money. What do you want back from him?

MZ: -- Whatever I can, whatever I can get back -- well, not me, it's a charitable trust -- we're going to sue him because what he said to us misrepresented what he was doing. He had plenty of time -- I never, never would have invested in Madoff for 100% of the fund. I don't care who it could have been (the genius Warren Buffett) ..

Miles: Do you think you can get part of your $30 million back?

MZ: I don't know. We're going to find out. I don't know what his net worth is. We'll get back what we get back.

Later in the interview Zuckerman gets grimmer:

MZ: .. I believe the shadow banking system as we call all of those different institutions, whether they be investment banks, or hedge funds or money market funds or what have you .. the shadow banking system now makes up 70 percent of the financing of American business life and the commercial banking system now makes up 30 percent. We regulate the commercial banking system in the Great depression. They made up over 90 percent of the world of finance, today they're 30 percent. We have to regulate the shadow banking system for a very essential reason: If they get into the kind of excesses that they got into it will destroy the economy. And for that reason, because the whole economic system of the United States rests on credit, the ability to take money from the people who have it and to give it to the people who are going to invest it and keep the economy growing ... if you don't get the system working, then the economy is going to fall apart.