Sanity Check via Wayback, 11 January 2009
Apparently, Goldman knew that Madoff was a fraud almost a decade ago. As this article in the Telegraph points out, there was a company-wide ban against doing anything with his firm after they did diligence on him:
“More than a decade ago bankers from Goldman Sachs’ asset management division were despatched to Bernard Madoff Investment Securities to discover how the legendary fund manager maintained such consistently good returns.
The American banking giant prided itself on managing funds in-house but if it could get a better deal for its clients at Madoff, Goldman would gracefully admit it and allocate some funds.
One former Goldman partner said: “I remember the guys came back baffled. Madoff refused to let them do any due diligence on the funds and when they asked about the firm’s investment strategy they couldn’t understand it. Goldman not only black-listed Madoff in the asset management division but banned the brokering side from trading with the firm too.”