Industry comment on the Madoff affair
Comment by Alberto Roldan, owner at R&R Analytics, who is working on the Madoff effect. He was asked why there has been so little comment from the Financial Risk community.
Let me suggest another potential scenario: that the Madoff effect is a more common fraud that institutional investors can even imagine. It is a lot easier for investors to think that Madoff is an exception rather than a rule. Imagine the effect on the markets if we cannot rely on traditional outlier detection to detect fraud, because the "population" under study is "corrupted".
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