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Hurt on the Madoff Victim Narrative

By Lawrence Solum

Christine Hurt (University of Illinois College of Law) has posted Evil Has a New Name (and a New Narrative): Bernard Madoff (Michigan State Law Review, p. 947, 2009) on SSRN. Here is the abstract:

Though not a cause of the 2008 financial crisis, the financial fraud perpetrated by Bernard Madoff against clients of his fictional investment advisory firm stands as a symbol of that time in history. Though Madoff?s crime was bloodless, sentencing judge Denny Chin described his scheme as ?extraordinary evil? and sentenced the seventy-one year-old man to 150 years in prison. This Article will examine the Madoff scandal and attempt to place it within the realm of modern financial frauds and the sensationalism surrounding them. Particularly, this Article will hypothesize that in the relatively safe and healthy environment of twenty-first-century United States, perceived threats to financial welfare are more salient to most Americans than perceived threats to our physical welfare. Because of this reversal from our traditional hierarchy of crimes from violent to nonviolent, the harsher sentencing of financial fraudsters reflects the changing values of modern U.S. society. In today?s world, life expectancy is lengthening and murder rates are decreasing. However, Madoff?s crime, which affected foundations and organizations, but also individual pensioners ranging from middle class to wealthy, touched on deep-seated fears among those who had built up retirement savings and nest eggs to be passed on to the next generation. To those whose greatest fear is to outlive their retirement funds, Madoff?s fraudulent investment scheme is an ?extraordinary evil.? Therefore, the Madoff victim narrative resonates with judges, lawmakers, and the public at large.

This Article explores how the Madoff victims were able to capitalize on public sentiment to change actively participate in the Madoff prosecution and even change federal law.

Highly recommended.

Full post as published by Legal Theory Blog on August 27, 2010 (boomark / email).