Fraud Vs. Closed Redemption Window

The Madoff fraud was so easy not in spite of SEC oversight, but because of SEC oversight. Since we pay for oversight, people believe all is on the up and up, and well regulated. Once the investors have been conned into believing their money is safe, it is so very easy to "take them," as Madoff has done. (Con artists NEVER try to make you confident in the con artist, their aim is to make you confident in yourself.)

Here again we have people believing that the government can regulate and oversees something, when they cannot. And people believe the players cannot regulate themselves, when they certainly can and do.

In a free market, Madoff's competitors would study his success and copy it. Some did, and discovered he must be cooking the books, nothing to copy. (If anyone squealed, the SEC did nothing. In any event the SEC did nothing.) At which point, the competitors would "out" Madoff, in a free market, natural law competition. Since the
power of enforcement is monopolized by the government, those who know keep quiet.

Now to my point: why did Madoff not just say "redemptions are running too high so I will suspend withdrawals" like so many of his peers have done?

Or, since no one at the SEC could tell the Madoff was running a Ponzi scheme, how can anyone know if any (or all for that matter) other hedge funds are Ponzi schemes.

Look how often withdrawal suspension is happening...

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