Excess Returns Behind the Scenes of the Madoff Scandal with a Trader on the Inside | Andrew Cohen
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Apr 16, 2025 In this engaging conversation, Andrew Cohen, a former Goldman Sachs trader turned finance professor, shares his harrowing experience of working at Madoff’s firm and being caught in the largest Ponzi scheme in history. He discusses the intense trading culture and the advanced technology of the era, as well as his interactions with Madoff's sons. Andrew reflects on the trauma of losing everything and the journey to rebuild his life in academia, offering valuable lessons on risk management and the importance of ethics in finance.
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First Day Trading at Madoff
- Andrew Cohen's first day at Madoff was on the trading desk assisting Andy Madoff to learn market-making.
- He traded about 26 stocks, relying on advanced technology and techniques to manage order flow effectively.
Basketball Trading at Goldman Sachs
- Andrew learned trading skills through Goldman Sachs' operations and by making futures markets on NCAA basketball teams.
- He automated odds calculations for basketball team trading, illustrating early quantitative approaches.
Battles with Mark Madoff
- Andrew had frequent confrontations with Mark Madoff, who was insecure and quick to anger.
- Despite clashes, Andrew was the most profitable trader and learned political and communication lessons over time.