Breaking Down Bernie Madoff P2 & 3
Update: Sorry about the mis-postings here. Had an update malfunction. So some posts were updated out of order. To make it easier, Im just combining the 2 posts. Long, but less confusing.
There was a report in the WSJ today regarding possible Madoff accomplices. In it was a line, which if true, could make things interesting for investigators.
- “ Across the hall was another room, where an old International Business Machines computer generated client statements, former employees say. Nearby was a small cluster of employees responsible for “stuffing envelopes” with client statements, according to a former employee. The IBM server operated independently from Madoff’s other computer systems but was supported by tech staffers who also did work for the stock-trading group, according to former employees.”
- If this server was operated seperately from the other Madoff corporate networks, I can tell you from years in IT the following are true:
- 1. There are untold IT techs who worked for the Madoff companies, or were outside contractors, who bitched every day about having to backup and service this computer seperately from all the others. They wouldnt be able to do remote backup or software installs and version control. They would have to physically go to the computer every day or support an admin who did. That would piss them off.
- 2. Just how old that IBM computer is will tell us volumes. If its more than a couple years old, those same techs are complaining about why its still around. If its more than a few years old, it also means they probably cant update any software running to the latest versions. Again, a red flag to the techs because it makes their job more difficult, particularly since Madoff cant plead poverty as an excuse for not upgrading
- If its a PC (the article references a computer and a server, which dont necessarily have to be PCs), is more than 5 years old and acting as a server, its running an old operating system. NT or who knows what. Heck if its more than 10 years old, it could be running OS/2 ! Regardless, those techs are not only mad for having to deal with all this ancient stuff, you know they are telling jokes about the entire situation
- 3. The age of the hardware will also tell you volumes about the origins of the software. Custom software running on an old computer means that it either can’t be upgraded because its tailored to the system, or more likely, he no longer uses that same employees , contractors or vendors to maintain it, so he has to run what he already has. There is a chance there is a programmer out there who quit because they recognized something was wrong.
- 4. Madoff is a lot more technically astute than people seem to be giving him credit for. This is from a 1999 Marketwatch interview “”We are in the process of building a new trading platform, but it’s not a ECN,” Madoff told CBS.MarketWatch.com.” Whatever software they developed to run that trading platform, he understood it and probably knew how to use it. Would it be a shock if the 1999 version of the software could run on that old IBM computer allowing him to create his own virtual market and spit out statements ? A self contained trading platform could probably handle this from A to Z ?
Maybe. Curiousity got the best of me. So I started doing some searching on the electronic trading platform Bernie built. They called it Primex. Its an electronic auction system for securities. According to media reports, it was the “brainchild of Bernie and Peter Madoff”
So I searched some more and saw this Feb 16th , 2000 press release: The basics of which are “SST’s B4B FIX combines robust object-oriented architecture with push-based TCP/IP messaging to provide an extremely fast and stable platform for both FIX connectivity and message processing. B4B FIX can be combined with SST’s B4B OMS(TM) in a seamlessly integrated order management system that generically integrates with B4B FIX to facilitate the straight through electronic trading process and improve the operational and connectivity efficiencies of its users.
“We are excited about satisfying Primex Trading’s strict requirements for high performance and reliability,” said Larry Gusto, President and CEO of Silicon Summit Technologies, Inc. “B4B FIX’s reputation for best performance and high-quality electronic securities trading software is the key value proposition that we offer. With B4B FIX pre-installed on the server located at broker/dealers’ premises, broker/dealers can take full advantage of the B4B FIX functionality for accessing the PRIMEX AUCTION SYSTEM.”
Some I’m thinking I may have found the company that wrote the software Madoff used on his lonely IBM Computer. The obvious next step is to find out more about Silicon Summit. So I did a search. It’s website is gone, but there are remnants of an old site with a company history that ends a week after the Primex deal. Maybe they got acquired, but I didnt find it. Of course in these situations, you use what limited information you have to fit the last hypothesis you made, which in my last post was that it was possible that the software company that wrote the software Madoff used for his fraud was no longer working on the code. Which would explain why he continued to use an old computer.
But wait, there’s more. So I did a search on the address of the company and boom, up comes this nugget:
STATE OF CALIFORNIA
DESIST AND REFRAIN ORDER
The California Corporations Commissioner is of the opinion that Silicon Summit
Let me clear. This could all be a BIG BAG OF NOTHING and probably is. But you have to admit, its sometimes a long strange search trip we undertake when we are curious and have a search engine handy.
Update: dec 2009. As far as I know, this is a big bag of nothing and Larry Gusto is not involved at all in any of this madoff mess. Just an unfortunate random link
