Mr Markopolos is right to say that the scale and durability of Mr Madoff's scam raises troubling issues for the financial services industry. By the time he turned himself in, Mr Madoff was taking money from more than 330 feeder funds of funds in over 40 countries; yet many of them continued to believe they had exclusive or preferential access to his impressive but non-existent winning strategy. Their claims to have carried out exhaustive due diligence were risible.

At the same time there were many on Wall Street who knew there was something not right about what Mr Madoff was doing, and steered well clear. Some invested anyway, believing that whether it was front-running or some other improper activity, they would rather not know as long as the returns kept racking up. The irony is that Mr Markopolos himself only first took an interest in Madoff because his employer kept badgering him to try to replicate what Mr Madoff was doing. Yet nobody else felt it worth their while to expose him.

The Madoff story is ultimately a story about breach of trust. Investors were naïve to trust Mr Madoff, naïve to trust the intermediaries who channelled money to him in such prodigious amounts, and naïve to believe that regulators could or would stop such an accomplished liar and conman.

In Mr Markopolos' view, although the majority of individuals in the financial services industry are honest, incentives to cut corners and breach both client trust and regulations are hard-wired into the system they work in.

David Fuller's view In selecting funds, investors may wish to consider these points as part of their due diligence:

1) Ponzi schemes do not show big drawdowns, so if the performance is too consistent or too good to be true…it probably isn't true.

2) There have been few bigger financial sales operations than 330 feeder funds in over 40 countries. Any marketing is the art of persuading you to buy something that you might not have otherwise considered. Therefore, when someone is recommending funds, directly or indirectly, no investor should be embarrassed to ask: Do you have a financial incentive in recommending this fund? It is a simple yes or no question. You may wish to conduct additional due diligence if the answer is yes, or if the question is not answered directly.

3) Check to see what fees are being charged by any fund considered. High fees are a headwind, especially for unleveraged funds. If it is a leveraged fund, risks will be higher, regardless of the strategy.