Boardroom Talk – SA’s Bernie Madoff: ‘gremlin’ who took a fortune from Sandton’s elite

BN PORTFOLIO – QUARTERLY RESULTS.Microsoft's September quarterly results were warmly received by investors yesterday, with the share price gaining 5% to reach a new all-time high of $345. Microsoft has a 6% weighting in the BizNews Webtrader portfolio and 8% in the smaller BizNews Shyft portfolio. The reason for this boost was an unexpected rise in revenues at its cloud computing platform, Azure, where income increased 29% year-on-year. Analysts had anticipated a number lower than the 27% growth seen in the June quarter. During the post-results conference call, CEO Satya Nadella attributed this outperformance to the company's decision to build a single, unified technology platform to support its Artificial Intelligence services. More than three years ago, Microsoft invested $1 billion in OpenAI (the company behind ChatGPT) and has since incorporated these models into the core of its AI infrastructure..*The next BizNews Portfolio update webinar is at noon on Tuesday, October 31. Click here to register for the Premium-only event..___STEADY_PAYWALL___.SA's Bernie Madoff surfaces – 'gremlin' who stole a fortune from Sandton's elite.By Alec Hogg.Weekdays for 15 years, I had a standing 6 pm in-person appointment with South Africa's favourite stockbroker, David Shapiro. Together, we'd share a radio studio and discuss the day's business news with the nation. David is a special man – incredibly well connected, courageously direct, mostly upbeat and always honest..It was a joy to reconnect with David yesterday for a conversation about an enigmatic individual named Craig Warriner, a financial advisors who, ironically, operated his business out of 4 Gremlin Road in Sandton..Although it's still early in the investigation, we already know Warriner has defrauded his clients out of hundreds of millions, possibly even billions, through a classic Ponzi scheme. In this setup, money from new investors is used to pay off those withdrawing funds. Now that the house of cards has all collapsed, even those who think they've safely withdrawn their money are likely to be in for a shock..Warriner's private school education at St Stithians provided him access to Johannesburg's affluent circles, many of whom entrusted their money to his BHI Trust—purportedly an acronym for Berkshire Hathaway Investments, if you can believe that. He also contributed generously to his old school, earning plaudits for his generous sponsorship of "The Craig Warriner High Performance Centre'..What we do know is Warriner admitted the trust which he adminsitered suffered significant losses in the 2008 financial crash. But rather than coming clean, he fabricated "returns," continuing this deception for the next 15 years, during which time he made even bigger losses through even riskier bets..Earlier this month, Warriner turned himself in and was taken into custody. He admitted guilt to all charges brought against him and chose to represent himself in a Katlehong magistrate's court hearing last Wednesday. The NPA was represented by a substitute for the official prosecutor who never appeared as he was on leave. Warriner's sole request is for a single-person cell, fearing that fellow inmates might harm him..For those who had the misfortune of dealing with Warriner, the news could hardly be worse. Shapiro explained the law is quite clear on such matters: clients who may have received distributions or cashed in funds from the BHI Trust any time during the last decade and a half are also exposed. Because that money is the proceeds of crime, it will have to be repaid. As happened with Madoff..The situation is a complicated mess, created by one man's refusal to admit to mistakes made at a time when losses were common. Instead of admitting his fallibility, Warriner decided to gamble with new money entrusted to him in an attempt to recoup his losses, all the while fabricating 'returns' to keep the funds flowing..According to Shapiro, "Many questions are bound to arise about the professionals—auditors, lawyers—involved with and around him The first warning signs are the financial statements you receive. That's your starting point. You need to ask: 'Where are my shares? I want to see my shares.' An important regulation was implemented after the 1987 crash stating that a client's funds must be ring-fenced." Including, perhaps, those millions donated to St Stithians..It's tragic on so many levels. And a warning to all: due diligence is your own responsibility. Trust, but always verify – especially when money is involved. And the more that people try to buy respectability the less they should be trusted (see below)..SterkteAlec.Read also:.Premium from the FT: UN chief denounces 'clear violations' of international law in GazaSAPS: The ANC's "Iron Fist" with Ian CameronAlignments pose risks: SA foreign policy may incur costs – Tony Leon

Boardroom Talk – SA’s Bernie Madoff: ‘gremlin’ who took a fortune from Sandton’s elite

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