On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.
Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.
But how much weight does the comparison deserve — particularly as a guide to how prosecutors ought to be handling the case? Unfortunately for those seeking immediate action by the Department of Justice, while the juxtaposition — between the swiftness of Madoff’s arrest and the fact that SBF is apparently enjoying life in the Bahamas — is superficially compelling, it does not withstand more than a few minutes’ worth of scrutiny. In fact, these claims run the serious risk of misleading the many people, including victims, who are understandably angry about what may have been a gigantic fraud. Those who are eager to see Bankman-Fried charged with serious financial crimes will just have to be patient.