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”