Thomas Friedman misses the boat:

I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the "legal" scheme that Wall Street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or Standard & Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial industry was doing. If that isn’t a pyramid scheme, what is?

Funny thing is, there really was a "legal" scheme connected to Madoff: it appears a substantial part of the money invested with him was not directly from clients, but through investment advisers who were specifically being paid huge sums of money (some on the 2% investment / 20% returns hedge fund fee scale) to perform due diligence and to ensure the investments were safe.

A number of these "advisers" — perhaps all of them given the obviousness of the fraud — did absolutely nothing at all to earn their money other than hand the money over to Madoff, no questions asked.

Textbook breach of fiduciary duty. If they misrepresented what due diligence they did, it’s fraud, too.

There will be a reckoning.