Global markets continue to feel the shockwaves brought by the latest financial scandal involving US financier and Wall Street wiz Bernard Madoff who had been accused of engaging in a $50 billion pyramid scam. The 70-year-old Madoff was turned in by his sons after confessing that his financial advisory business was nothing but a big lie, “basically a giant Ponzi scheme.” Named after Charles Ponzi, the scheme involves paying unusually high profits to investors with the money coming from the funds brought in by subsequent investors, pretty much like a pyramid scheme.
Aside from some of the world’s biggest banks, those who have been hit hard were ironically Jewish philanthropic organizations and charitable institutions who entrusted their finances to the former Nasdaq chairman who is himself a Jew. Madoff started his business with an initial capital of $5,000 which he saved from his work as a lifeguard. Over the years, he developed a reputation as a business whiz and was recognized as a leader of Wall Street’s biggest trade group, the Securities Industry Association.
Why such a giant fraud was not detected earlier by the US Securities and Exchange Commission is now the big question, with insiders claiming that US regulators never inspected Madoff’s advisory business when it was subjected to oversight in 2005. SEC inspectors examining Madoff’s brokerage firm reportedly found three violations but never filed a suit. Prior to that, Madoff had been involved in a lawsuit involving Florida accountants accused of selling unregistered securities but was later cleared of any wrongdoing.
Apparently, Madoff – who was described as a psychopath by people who are familiar with him – was successful in projecting the image of a respectable businessman and philanthropist, donating millions to lymphoma research and establishing the $19-million Madoff Family Foundation that has been donating money to hospitals, educational institutions and other charities. He was well-known in political circles and has been a generous contributor to the Democratic Party, which is probably why suspicions about any wrongdoing were usually dismissed.
The fact of the matter is, there are a lot of Madoff types in this country who have been operating similar Ponzi schemes for so long. While some of the victims included wealthy people, a lot more were retirees, school teachers and average workers who were lured by the promise of big returns for their hard-earned money. Numerous investigations have been conducted about these pyramid scams but nothing much has been happening to prevent these schemes from luring fresh victims.
It’s sad how companies just seem to pay lip service to the concept of corporate governance, with profit still the primary motive. Take for instance the case of several rural banks – in Parañaque, Cebu, Batangas, Laguna, Negros Oriental and other provinces – who suddenly declared bank holidays and were subsequently placed under the receivership of the PDIC. Many of these banks already knew they were facing liquidity problems but they resorted to fantastic “double your money” schemes and gimmicks like offering cellphones or laptops to attract new depositors.
Depositors got the shock of their lives when about a week ago, these banks suddenly closed without notice, leaving them in the lurch. Unfortunately, many of the victims were fishermen, janitors and farmers who were enticed by the promise of very high interest rates. While the PDIC has assured depositors that they can get their money back, this will obviously take time. And now these poor depositors face the prospect of a bleak Christmas because some people were more concerned with making money without considering the consequences to others.
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Restaurant business continues to thrive
Despite the financial crisis, it looks like the restaurant business is insulated because a lot of wealthy people continue to eat out, enjoying the cuisine from some of the best restaurants in town especially during the Christmas Season. As a matter of fact, a lot of people I know are now into the restaurant business like Al Tengco with Nanohana, Tonyboy Cojuangco and his brother Choy with Lolo Dad’s Brasserie at the 6750 Building in Ayala and also Fu in Serendra. There’s even Erap Estrada who has joined the roster of restaurateurs, partnering with Bong Sta. Maria (former PLDT executive and special assistant to Manny Pangilinan) to put up Tangerine Restaurant in Greenhills.
But the one who has parlayed his lifestyle to fit into his business acumen is Louie Ysmael who has been extremely successful in the restaurant business, starting with the high-end Nuvo in Greenbelt which has integrated a bar concept with an al-fresco dining area and is a favorite both by expats and locals. He also put up Silk with his wife Cecille, located at Serendra in Fort Bonifacio which has also become very successful and is one of the few restaurants offering the best Thai food in town.
Partnering with Maricris Zobel, Louie has just opened a new restaurant and bar called Terrace at Fifth offering home-cooked food featuring treasured family recipes from the kitchens of Maricris, Cecille and their other partners like Carol Garcia, Menchu Soriano, Ching Cruz, Ivy and Cynthia Almario.
Louie was a party animal who successfully ran Stargazer in Silahis, then Where Else at the Intercon in partnership with Iñigo Zobel. From being the “disco king,” Louie Ysmael has now successfully transformed himself into the “fine dining king.”
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Email: babe_tcb@yahoo.com