Some of Hollywood’s biggest names have had the misfortune of finding out that money they had invested with Bernie Madoff has vanished.
Steven Spielberg and Jeffrey Katzenberg of DreamWorks fame may have lost millions in Madoff's alleged Ponzi scheme, according to The Wall Street Journal.
Spielberg and Katzenberg’s Wunderkinder Foundation had investments with Madoff that were made on the two celebrities’ behalf by their business manager.
Eric Roth, who wrote the screenplay for “Forrest Gump” and recently received a Golden Globe nomination as screenwriter of “The Curious Case of Benjamin Button,” lost all of his retirement money.
Madoff, who was once the chairman of Nasdaq, helped the upstart stock trading facility rise to become a respected alternative to the New York Stock Exchange.
When it came to the methods that his now defunct investment firm used to achieve unusually consistent returns, Madoff was quite secretive. Reports sent to investors by him only disclosed general strategies, such as using stock options to take advantage of market volatility.
Now the mystery is beginning to be revealed. Madoff was paying existing investors with money from new investors. When the credit crunch hit, things swiftly fell apart.
At the time, if Madoff were managing your money, you had bragging rights. That’s how hot he was. Sources indicate that plenty of other entertainment industry figures have lost big-time in the alleged scam.
Hollywood is unique, even in the financial sense. This is partly because there’s a fame meter that operates, and residents are all tuned in. A continuous internal read is taking place, and externals are used to project one’s measure.
How much fame does one possess? Stars consciously and subconsciously assess each other’s scores and respond accordingly.
Madoff’s score was super high, the result of his own eventual level of investment celebrity.
Like a Ponzi scheme, though, fame had been artificially multiplied for Madoff, which he used to gain more Hollywood clients, and so on. When the bottom fell out, the fame itself changed character.
As circumstances unfold, Madoff’s score on the fame meter may still remain high, but it won’t be a measure he’ll feel proud of.
James Hirsen, J.D., M.A. in media psychology, is a media analyst, teacher of mass media and entertainment law at Biola University, and professor at Trinity Law School. Visit: Newsmax TV Hollywood: http://www.youtube.com/user/NMHollywood.
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