Madoff 2008 : Audit Verification Gap & Feeder Fund Incentive Misalignment | GP/LP Analysis - 3 Red Flags | EP19 T2

Fairfield Greenwich had seven and a half billion dollars with Madoff. It earned three hundred million in fees. It never called the Options Clearing Corporation to confirm the positions existed. That call takes twenty minutes. This episode is the institutional autopsy of the Madoff case — the specific due diligence gaps that kept the fraud alive, the three verification steps that would have ended it in any year they were performed, and what the feeder fund incentive structure reveals about any current manager relationship where the strategy depends on market activity that hasn't been independently confirmed. For GPs and LPs.