What the Bernie Madoff and Sam Bankman-Fried Fiascos Have In Common: Red Flags Ignored

It Pays to Be a Healthy Sceptic

Stephen Foerster
7 min readDec 6, 2022

Bernie Madoff mugshot, U.S. Department of Justice; Sam Bankman-Fried in an interview during the Bitcoin 2021 conference, YouTube “Institutions are ‘DESPERATE’ for crypto! | Exclusive interview with Sam Bankman-Fried”

He was well-respected in the industry, as head of a major exchange. He was able to attract billions of dollars in investments. He was known for his major philanthropic initiatives. And then his world suddenly collapsed, wiping out billions for his investors.

Stephen Foerster

I’m a Finance prof, CFA, and author of In Pursuit of the Perfect Portfolio (with Andrew Lo). I write stories about investing. (I don’t give financial advice.)