Blogs and Stories
Suicides on Wall Street
We may never know how much money was lost (or stolen) this year, but the human toll is starting to add up.
The latest tragedy to come out of the Madoff scandal involves a man named Rene-Thierry Magon de la Villehuchet, a money manager who lost more than $1 billion of client money, including much, if not all, of his own family’s fortune. Just days after learning of the massive losses, he sat in his office in Midtown Manhattan and methodically slit both of his wrists with a box cutter, and bled to death.
De la Villehuchet's suicide adds yet another gruesome chapter to the Bernie Madoff Ponzi scheme. For the past two weeks, I’ve reported about the red flags that were missed by inept regulators who could have uncovered the massive fraud sooner, and saved money for countless victims, as well as evidence that Madoff couldn’t have stolen $50 billion all by himself. Then there is the human side of the story—the charities that lost millions; the wealthy and not so wealthy people who lost everything after they handed Madoff their life savings, because like any good scam artist he spent years earning their trust with lies that he could be trusted. And now a suicide from someone who lost everything.
Since the beginning of the year, the Dow Jones Industrial Average has fallen to roughly the same level it was 10 years ago. In other words, Americans are no richer now than they were in 1998.
There will be countless stories, profiles, and books written about the Madoff scandal. It will be billed as the financial crime of the century, which, based on everything I know, is probably true. But it’s also part of a bigger story that broke almost the moment 2008 began, when the financial world as we knew it started to fall apart, and the human devastation that followed. In a span of 12 months, two major securities firms employing tens of thousands of people—Bear Stearns and Lehman Brothers—were wiped off the map. Big banks like Citigroup, Morgan Stanley, and Goldman Sachs have survived, but just barely, and not without government handouts. Job losses are everywhere on Wall Street, and most people I speak to predict things will get worse.
The tragedy goes beyond the loss of jobs and wealth, because de la Villehuchet's suicide wasn’t the first human casualty to result from the financial implosion of the past year. I know of at least two other people who have taken their own lives because of the Wall Street meltdown. One was Barry Fox, a former analyst at Bear Stearns. People who knew Barry said work was his life. He was committed and loved his job at Bear, which he’d had since 1999. But in May, just weeks after the company imploded and JPMorgan Chase took over the failed investment bank, Barry was told he was one of several thousand people who would be out of work. Not long after, he went home and threw himself out of the window of his 29th-story apartment.
I didn’t know Barry Fox, but I did know Eric Von der Porten, who was a managing partner at Leeward Investments, a small and for a time successful hedge fund in Northern California. I ran into Eric because he was one of the first financial types who saw the hype in the dot-com market in the late 1990s and began questioning the research calls of analysts like Henry Blodget. He wrote to regulators demanding that they crack down on what he thought were fraudulent stock ratings. Stock analysts, he said, were publishing positive ratings only to help their firms win lucrative underwriting contracts from the very same companies they were rating.
Eric was talented and smart; what I loved about him was that he also had a sense of outrage. The story of biased stock ratings was bigger than a bunch of Wall Street types ripping each other off, he believed; these biased ratings were used by brokerage firms like Merrill and Citigroup’s Salomon Smith Barney unit to lure small investors into buying crappy Internet and telecom stocks. Eric also seemed to have his priorities straight. Unlike most people I know in the financial business, Eric gave up jobs at big firms to manage money not far from his hometown so he could dedicate some time to serving on the local school board.
Most recently, Eric, like just about every professional investor I know, lost a lot of money in the markets. He also took his losses particularly hard, and in early December, he suffocated himself to death.
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Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
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Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
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Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for the Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His forthcoming book about the financial crisis, The Sellout, is scheduled to be published later in 2009.
"Eric also seemed to have his priorities straight....."
" ....He also took his losses particularly hard and in early December, he suffocated himself to death."
These two sentences are mutually contradictory. I'm sure Mr. Von der Porten was a decent man whose death is a tragedy to many...but "straight" priorities he certainly didn't have if he was willing to kill himself over the loss of money.
If you live by the money, then you die by the money.
Mutually contradictory indeed, this from a financial on-air editor who did not have a clue about our downfall. All the fraud and he never said a word. Some way to edit!!
I predict there will be more suicides in 2009 as the scope of the financial disaster starts to clear. I also believe that this will not only affect (or is it effect) "Main Street America" as well as the Wall Street movers-n-shakers. Once people in their late 50s find out they have no money right before they retire the chit will really hit the fan.
Suicide is always triggered by something, but the tendency exists long before the trigger is pulled. My guess is that these men had considered this option dozens of times before they actually did it.
People are going to trot out every hoary wise assed remark about Wall St types killing themselves in 2009 & thereafter. Perhaps, we may get a few fresh but heartless remarks & even wit about these unfortunate events. JeepRover is in the running to coin fresher remarks with, "...chit will really hit the fan...". Gallows humor has been around for a long time but we use English & there are wits who have mastered the useage of English still active & creating mordant humor.
"Amen" to the last paragraph!
If you don't earn the big bucks, losing money, job or house is devastating. If you have been a big earner, your overhead is likely to be bigger, making a large loss no less devastating.
But if you have been responsible for the losses of others - friends, family, customers, you have nowhere to go for comfort or sympathy. Your world is shattered.
I would like to wish everyone a better 2009, bankers & brokers included.
"The big players on Wall Street, people like Warren Buffett, Robert Rubin, Jamie Dimon, of JP Morgan Chase, Morgan Stanley CEO John Mack, and Lloyd Blankfein of Goldman Sachs are all smart, important men who run companies that are vital to our national economy."
They may be important - but I beg to differ that they're smart. I seriously question their moral values, as well. Anyone who's content raking in millions in personal income while throwing their employees under the bus, and then lobbying for lower taxes to boot, is a scumbag. When Goldman-Sachs can take our money with one hand and then ship it all offshore to get an effective tax rate of 1%, there's a serious problem. By calling them smart and important you deify them yourself.
Here's hoping that 2009 is a year of reassessment of both the value of money and the values that money influences.
Mr. Gasparino, this is a poorly written, sentimental ramble. I am uncertain as to the real point you are trying to make. Whatever you're intent may have been, this maudlin stumble turns personal pain and tragedy into a cheap platform for you to say, "The way things are going, I'm afraid there will be many more such incidents in the future." What a feckless thing to say. Perhaps people will read your thoughts here and realize that poor thinking and reckless theorizing is no way to approach their financial concerns and turn off CNBC.
How sad. The ones I feel really bad for are the family that never knew what being poor is about. Their children are set for a big let down. I know many wealthy families that their children never new what the word no meant. Whatever they wanted they got. Wow what a let down.
I know. How will they make it. Looking down their collective noses all these years only to find out that they were looking at themselves.
I'm having a lot of trouble seeing the suffering of multi-millionaire bankers as "tragic". These thieving bastards were living high on the hog while the other 99% of the country suffered with stagnant or declining wages, escalating health care costs, and lousy service industry jobs. If these cry-baby financiers, in the words of Mr. Scrooge, be like to die, then let them, and decrease the surplus population. Good riddance.
Everyone on Wall Street who gets fired should get a ukulele with their severance package/pink slip. I can't imagine anyone commiting suicide if there's a ukulele at hand. It's the most uplifitng thing to make your own music. Hey, Warren Buffett plays one, and I'll bet he'd tell you it helps keep things in perspective, as well as being the most fun imaginable.
Charlie Gasparino continues to be at the forefront of reporting the financial mess. Thanks, Charlie!
My condolences to the family and friends of these 3 people. Whatever their culpability or lack thereof, it's sad for those left behind.
No loss of money is worth taking one's life. Ever. Suicide has terrible, long-term repercussions for one's family, friends and for the larger society.
Although one's monetary wealth may never be recovered after a major financial loss, one's life may paradoxically be enriched by experiencing such a setback. We humans are amazingly resilient creatures. Read history. Talk to others who have survived such things and much worse to regain (or obtain) perspective.
To learn from such an experience one must be willing to accept that the value of human life is not contingent upon or even necessarily related to how much one owns or "produces," an idea at odds with our culture, and an idea completely anathema to those used to making lots of money.
This article opens up a much needed discussion about the problems of humans over-identifying with their work and their money-making ability. I hope anyone contemplating suicide over their monetary losses will just stop and get help. Human life is more valuable. Really.
I agree that this article is poorly written and really has no point. If the writer were being honest he'd point out that there really weren't all that many suicides after the crash of 1929, and that it's been shown to be an urban myth. And please....Larry "Let them eat cake and "survival of the fittest" Kudlow? He's not exactly a model of compassion.
Why not lay blame for the current economic catastrophe, as well as the looming environmental calamity, where it belongs: at the feet of the economic powerbrokers who organize and manage a colossal pyramid scheme, a modern representation of the ancient Tower of Babel? Is the pernicious denial of anthropogenic global warming and the human-driven destabilization of Earth's climate not primarily for the purpose of preserving the selfish material interests of a few wealthy and powerful people, and their minions?
Let's look a bit more closely at the scandulous 'business' of Bernie Madoff, confidence games, Ponzi schemes and other financial vehicles for funneling, accumulating and concentrating billions of dollars in unearned wealth into the hands of a tiny minority of people who comprise the top of the global economy.
There are many minions of the wealthy and their bought-and-paid-for politicians who "spread the word" of these schemes. Con men operate pyramid schemes. They assure "plausible deniability" and "legal cover" for all that is said and done.
Only a telling of the truth about what they are doing is forbidden. That is the one and only thing that is verboten. Do not break their vow of silence by telling what is true about the perpetration of the schemes {ie, the only games in town, so they say}, because the "houses of cards" out of which a modern Tower of Babel is constructed immediately is exposed as fraudulent and patently unsustainable. These pyramidal constructions can withstand any force except that which is presented by speaking out loudly and clearly about what is happening in these enterprises. As soon as light of what is true was shed on Bernie's scheme, the house of cards he had constructed fell.
Bernard Madoff may be the first of my "Not So GREAT GREED GRAB Generation's" kingpins to find that his "house of cards" has collapsed; but I dare say, Bernie will not be the last. There are other kingpins and many too many minions ready, willing and able to play along in what looks like the greatest self-enrichment scam in human history.
Why not say that greed is not good and mean it? Why not assign value to personal honesty, accountability and transparency?
Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
http://sustainabilityscience.org/content.html?contentid=1176
..."no new taxes"...
Eventually the national deficit (and DEBT) has to be reduced either through tax increases, or in the case of debt inflated away.
To not want to pay your fair share and whine about the loss of wealth, that in reality was never really there, is selfish and irresponsible.
I have to say that perhaps the word "Stole" as it relates to Mr. Madoff(sp) may be a bit of a stretch. He conned people into "giving" him vast sums of money because I'm guessing that he supposedly had his hands on questionable ways of investing money with rates of returns the rest of us commoners could never have access to.
As far as really, really, really wealthy people committing suicide because they'll have to learn how to scratch out a living like the rest of us......I empathize with their families but I'm afraid that I am having trouble feeling bad for them personally or anyone else who may do so in the coming year or so. I've seen too many truly tragic deaths over the years to count these people among them.
I can only feel bad right now for the charities the he bankrupted with his Greed. How many souls will stay in need this year because of his misgivings?
If all of the big shots on Wall St. and in the banks who are responsible for the economic mess our country is in committed suicide, the world might be a much better and safer place.
I fully agree with bghnow.
The suicides began before the Dow Jones meltdown. Here in Phoenix, the CEO of one mortgage finance company committed suicide several months ago. What was discovered in the aftermath of his death was the disaster of his company, which had financed some of our city's largest and highest-profile downtown developments with money it didn't have.
Let's say that Bernie Madoff commits suicide. Would that really make the world a better place? Some might celebrate. Most of us would forget about it soon enough. But his family, friends and society at large would be the worse for it.
Suppose instead that there is some possibility for partial redemption for Mr. Madoff. He is a brilliant man to have pulled off such a complicated hoax and we could learn a lot about how to regulate markets from him. We could possibly prevent other people from losing their investments in the future by learning how he was able to perpetrate this extraordinary fraud. It might even be possible (though not likely) to retrieve some of his wealth from bank accounts around the world and arrange some partial pay-offs to many who invested with him. But would this occur if he were dead? No.
For better or worse, people take their cues on how to respond to seeming disasters from individual behavior. One person committing suicide as a response to a financial failure sets a precedent for others on how to respond to such an event. People who are under a great deal of stress are not usually thinking clearly and are much more likely to mimic a behavioral response that seems to be an easy and socially condoned way of solving their difficulties. Do we really want to be the internet version of the societal Greek chorus yelling: "Jump,jump!" to those standing on the ledge?
Finally, if you're the family member, good friend or colleague of a person who kills themselves, you suffer a lot as a result of their decision. Yes, even if that person is Bernie Madoff.
Many, many people have been and will be affected by this downturn. Most are relatively innocent people who will be forced to make difficult decisions regarding their futures.Some were more actively complicit in their exploitation by investing all or most of their wealth in high risk ventures. Some were complicit in this debacle by being silent cogs in the wheel and cooperating with what they knew where highly questionable and sometimes outright fraudulent practices. But really, not a one of them deserves to die by their own hand or by the hand of others as a result of their decisions. Not one.
I agree with bezvodka...these robber-brokers are scumbags and we're better off without them. The whole problem with this country is that we have no notion of shame. We are NEVER ashamed of our behavior, we are always proud, good Americans! We need to bring shame back into the public realm. People who have destroyed others' lives for their own personal greed should be so ashamed that yes, they cannot bear to live another moment. And if suicide is so terrible for their families, then maybe they'll think twice before they do things so shameful they might have to kill themselves.
It's all about greed. Anyone giving Madoff money and accepting the idea that a 10% return was consistently possible in the big crap table of Wall Street was in collusion with their illusions, and lacked the moral fiber to question any method that consistently brought such large returns. Much of these investors had money stashed in tax free havens and illegally moved huge tax advantaged money to Madoff.
So their greed was a twofer. I am only sorry about the charities and foundations that collapsed that deprive the
needy they were designed to help. Thousands of poor and suffering souls will suffer or even perish.
I have no concerns for those that commit suicide. It's a coward's way out from those who simply cannot face failure, take responsibility or endure hardship.Life without money is obviously not worth living. More than ever we desperately need regulation and a renewed moral structure.
Capitalism needs to be reinvented. Having lived through the depression and remembering all the suffering and deprivation, it's hard to believe Americans would allow stupid greed to bring us to this.
First off, you people know little to nothing about suicide. It's a response to feeling trapped in either physical or emotional pain. They see no other options. I have worked as a crisis line listener for the past 16 years. We help find people other options and possible relief to the pain.
I would also like to comment on "no new taxes" for rich people. We see in the now what this continual tax cutting attitude has gotten for country - NOTHING !! This emphasis only increases the profits and enrichment of a very narrow class of people who feel absolutely no responsibility to anyone else or the greater community. Give business infinite tax cuts and you will get NO new jobs or investments.
Madoff simply took advantage of this self-centeredness and was able to dupe them out of their money. I am sure many innocent and nice people and charities got bilked, but it doesn't stop this attitude of "Me, First" so prevalent among social attitudes.
It's not the loss of MONEY is it for chrissakes.
It's the loss of what that money provides!
Including self-esteem, social status, freedom, home, lifestyle.
All the ' money isn't worth dying for ' comments. Jeez.
Ho ho ho. Add to that the ruin of your friends by your own hand. And at the moment they are retiring... etc etc.
I would jump out of a frigging window too.
deathpenaltyformadoff.com !
Thank you.
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