Is your money safe with anyone?
Is your money safe with anyone?
The Bernard Madoff scandal has inflicted damage beyond investors' huge losses -- it has further eroded institutional trust.

By MSN Money staff
Whom can you trust nowadays? Judging from the flood of comments to MSN Money after the Bernard Madoff scandal broke, the answer may be no one.

Investment advisers, banks, employers and even government can't be relied upon to keep their promises, readers told us.

After Madoff's arrest in an alleged $50 billion Ponzi scheme, MSN Money columnist Scott Burns noted that the amount of wealth that had vanished under the hedge fund operator was roughly equal to that lost to burglars and other thieves in the U.S. over three years.

Readers know very well that it's a dangerous financial world out there. How can you be sure the money manager you hire won't pick your pockets instead? Some letter writers blamed victims, too, saying they had used "trust" as an excuse for turning a blind eye as long as the money kept coming in.

Readers expressed skepticism, to put it mildly, of "I'm from the government, and I'm here to help." They applauded a clampdown on consumer-unfriendly credit card practices but wondered why, if it was the right thing to do, companies have until July 2010 to make changes. And many readers who have dutifully saved for retirement in 401(k) accounts said they now wonder whether these do-it-yourself retirement plans were a good idea.

Here's a sample of comments taken from e-mails to MSN Money and from our message boards:

I have lost my faith. Everybody lies. Is there a single Boy Scout left at the CEO level anywhere? Has anyone actually paid the advertised price for anything in the last few years (especially an airline ticket)? Has anyone gotten the rebate promised you without a hassle? It goes on and on, doesn't it?

My wife and I both teach school. We invested some inherited money, which has dwindled the past few months. We are meeting with our broker, who has recently jumped ship and gone to work for a state agency, to figure when we might pull all our remaining money. We might put some in our local credit union, and we most likely will pay what is left on our house. As far as trusting the experts, well, that is shot for the rest of our lives. We are in our early 50s, and our money will be close at hand.

I have never in my 50-plus years been this ashamed of our government and business so-called leaders. None of them are leaders. It's too bad we can't bring back the public stockade block and teach them all a little shame. It is time to vote them all out, public office and the boardroom. No golden parachutes, no perks, just out.

More from MSN Money
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Feds ban 'unfair' credit card rules
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Many a year ago there was a phrase that was used: "He has a good name." Now that didn't mean a name like Smith or Jones or someone else down the street. What it meant was the individual was honest, upright, fair, trustworthy, honorable, reliable and possessed integrity, and had lots of other significant character traits. Well, back in the old days, if you duped someone the whole town would blackball your name and you'd be done. Now we hide behind contracts, weasel clauses, loopholes and any other excuse that works. Maybe it is time to just get back to a man's word and honesty, then maybe we are way too far past that.

When does this madness end? In all the years that I have been alive on this planet I have never, ever seen such blatant greed and arrogance! Just when I thought that I had seen everything given, I have proven myself wrong. This scam is the granddaddy of them all. White-collar finance crimes should be punished as severely as a murder or rape, then maybe these greedy, indifferent government, corporate and Wall Street types would think twice about committing their atrocities.

A few years back, the small city of Ensenada in Mexico suffered from a similar fraud. I recall my grandpa being really angry at me when I refused to open an account on his behalf. Even when I was only 20 years old it seemed really suspicious to me they were paying an interest of 12% monthly (simple, not compound) when the normal interest rate banks were paying was 13% a year. Less than six weeks after that, the so-called investors flew away with an estimated $40 million, which severely damaged the economy of the city. I had an old friend of the family living in my apartment since he was from another town and wanted to be in Ensenada to try to recover his retirement money. He had to go back to work when he was almost 70 years old.

Is your money safe with anyone?

My 401(k) lost more last month than my first-year teaching salary. I was such a fool to have saved for retirement. I'm no better off than those who did no planning. I will probably be on welfare before next Christmas.

As W.C. Fields once said, "You can't cheat an honest man." If it looks too good it probably is. Very wealthy people here got greedy far more and quickly. I don't defend Madoff, but the investors were looking for a very high and unrealistic return, and they go it.

I certainly don't condone what Madoff did, and I think he should be punished. However, the people who invested with him are not without liability. When the rest of investment companies are losing money or earning 2%, why wouldn't you question a hedge fund that pays 8% or better? . . . As an outsider I see a lesson here for investors, regulators and the general public. Be smart, be balanced and trust, but check.

As a victim of a $632,000 embezzlement last year by our office manager, I can through experience say no, you cannot trust institutions -- you certainly cannot trust the so-called justice system. In our case, the perpetrator freely admits her crime. She's not only still free, she's never been contacted by the police, and it's probable she lived the last year on about $70K in stolen funds when we caught on to her, and she's hired a defender with our money! Since there are multiple crimes spanning banks in other states, she could have faced federal charges but the FBI declined to prosecute because they are "too busy protecting America from terrorists." "Justice" in America is a joke.

Instead of people using their brains, which are powerful tools, they tend not to trust themselves. So they're always asking questions. How should I tie my shoes? How should I brush my teeth? How should I invest my money? When should I buy gold? . . . There are no leaders or gurus; there is only YOU. You must take responsibility for your life. YOU must be the author of your own life. So, instead, these people trusted someone else. Why? Don't you have the capacity to learn and invest and track your own money?

It seems funny that the amount of money should have anything to do with integrity. Fact is, when times get rough everyone seems to find a new standard. Well, folks, when a man's name for character went out the window and the attorney walked in the door, you lost justice and gained a defense.

It's not the little guys or the lowest-paid workers in a company you need to worry about. They may steal toilet paper, office paper or things like that. It's the CEOs and CFOs who steal millions from workers and investments, from the company they are working for. The little guys are stealing to survive. The CEOs and CFOs are stealing for greed. To me that's a huge difference.

Public trust cannot be restored until public participation is restored. . . . The governor of Illinois -- knowing he's wired -- comes right out and says, "I want to sell this Senate seat." He's still the governor of Illinois. . . . A guy, investigated by the SEC seven times, rips off $50 billion. The SEC chairman is still the SEC chairman, and the thief is under "house arrest" in a $12 million Manhattan penthouse. Our tax dollars are used to bail out banks and insurance companies so they can buy more banks and go on boondoggle retreats. What do we do? Give them more money. The days of throwing boxes of tea into the harbor are over. No more taking over the dean's office. No more riots at conventions or standing up to police water cannons. . . . So sit back, relax, enjoy your new role as victim and stop your whining. It isn't doing anyone any good and it only serves as an insult to all those real Americans who lived before us.

The Fed is years late (in banning "unfair" credit practices). These folks (banks, credit card sellers and regulators) are uncaring thieves. . . . These people are killing America and Americans with their usurious interest rates and handy credit scores.

Letters may have been edited for grammar or spelling, and some have been condensed due to space considerations. The opinions expressed in the letters are those of the authors and not necessarily those of MSN Money


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