How did Bernard Madoff get away with his Ponzi scheme for so long? Securities Industry News says one factor was his firm’s Luddite approach to technology. Madoff Investment Services used antiquated computer systems that were expensive to maintain and difficult to adapt to new classes of securities. Had Madoff replaced the proprietary systems with more modern and open computers, they likely would have found the absence of data on countless stock trades that supposedly took place.
In a sense, the preservation of old computer technology helped Madoff successfully go undetected for years. A year after Madoff’s arrest, the publication says the affair amounts to “a cautionary tale to information technology managers and executives at shops up and down Wall Street. If you think something is amiss, don’t let it rest. Do your own investigation.”