With one very easy mathematical formula.
For France’s financial education week, I published a series of 5 posts on LinkedIn, one of them about PFOF (in French), payment for order flow. That way of getting paid by your market maker was reportedly invented by a former Nasdaq chairman, who also happens to be the author of the biggest and longest Ponzi scheme in the world: Bernard Madoff.
Almost everything has been said about his 48 years of swindling (his investment product was a scam from start to finish), but the fact remains that he could have been found out much earlier. Not only by the SEC, which had the warnings in hand, but by… anyone. With public documents and a basic Excel spreadsheet. In just a few minutes.
And that is today’s subject.