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Mark Cuban’s Very Good Point

Internet billionaire and Dallas Mavericks owner Mark Cuban may be facing an insider trading claim by the Securities & Exchange commission, but he has some useful advice regarding how to track down a real crook.

At his site, Blog Maverick, Cuban says that were he working for the SEC or a news organization assigned to cover the Bernie Madoff scandal, the first people he would seek out are the software developers that worked for Madoff, specifically on his back-office operations.

Writes Cuban:

“Somewhere along the line there was a software program written or modified that allowed Madoff to enter the numbers he made up, who they were paying out cash to and would print the checks and  statements.  Its very unlikely that it was off the shelf software because it would be impossible for all the numbers to balance, or he would need to use suspense type of accounts that would raise red flags for even the smallest of accounting firms.

Maybe I have missed it, but I have yet to see an article written or any commentary about the software Madoff Investments used or read about any programmers that have come forward that worked for him. Someone had to outline the details of what they wanted the software to do, and in a scam of this size, could it be anyone but Madoff himself ? Someone had to take that information and either create or modify software to keep the whole mess running smoothly for him.

Find the programmers who wrote the software and you will find out how the whole thing worked.

What comes of the very long investigation that SEC has begun remains to be seen, of course, but some of Cuban’s readers have already speculated on what the government may find — and what they may not.

Says one software developer at the site, “I can say that it would be possible to pull off a scheme like this with existing software solutions, so I don’t think there’s a trail of custom software to be found here…More plausible is that there were accomplices that were aware of the ‘special procedures’ that were going on in the accounting systems, using existing software.”

Says another software developer: “Very true Mark, great observation. I’m a software dev and have worked for several organizations. Software devs are always in the middle of everything and wind up knowing the majority of what goes on with the companies they work by default. We have to understand the company’s business rules in order to write the software correctly. I’ve learned so much about business, marketing, etc. just by being in the middle of it all.”

Says Sean: “It could be possible he contracted some people out to build what he might call a ‘test program’ that would create false numbers all in the name of teaching people to invest. He would have to word it oddly but I could see this happen with out the out sourced company having any idea what the hell they were building. I mean the way things are today, there a dime a dozen out sourcing companies that would gladly build something with no need for it’s use. If that’s the case, they may have been complete unaware (ignorance is bliss) of what was going on. Hell, that group could be watching CNN right now and have no idea what they built was the center of all of this. Of course this is all assuming that they haven’t figured out who built it yet.”