Is it possible the financial media played a role in facilitating the alleged $50 billion Bernard Madoff Ponzi scheme? An interesting theory by Jon Najarian, CNBC analyst and cofounder of optionMONSTER, contends that they very well may have unwittingly done just that. Madoff, he believes, used media publicity to lure investors to his scheme.
As Najarian explained on CNBC's Dec. 22 "Fast Money," Madoff got his reputation on Wall Street in the payment for order flow business. That's when a brokerage firm receives a payment as compensation for directing the order to the different parties that can execute the order at a lower cost.
"First of all you needed something that was very credible, because what he started off with was very credible," Najarian said. "As we both know, Dylan, he was in the payment for order flow business before anybody else. That meant folks that he was buying on the bid and selling on the offer back when the spread on NASDAQ stocks was 50 cents wide."
Poor schlumps out there know how to get along with next to nothing. But these were multi-millionaires that Bernard Madoff wiped out: show some sympathy! That was The Donald's daffy drift in speaking to Wolf Blitzer on this afternoon's Situation Room on CNN.
The wires services and the rest of the Old Media have also been reporting on a scandal that doesn't have to do with Illinois Governor, Rod Blagojevich. But, like the Blago story line, the media seem to be forgetting one small aspect of the story of Wall Street rip off artist Bernard Madoff. Like Blago, Madoff's connections to the Democrat Party seem to be of little interest to the media.