I Became the Youngest Daughter of a Chaebol Family-Chapter 86: Proper Conduct (1)

Once upon a time, back when Nazi Germany was still gassing people, there lived a man named Charles Ponzi.

He employed an incredible investment technique that promised consistent, high returns. The method? Using the money from new investors to pay the old ones.

Of course, Ponzi wasn’t the first to pull off the trick of robbing Peter to pay Paul. But his brilliance lay in systematizing and modernizing the scheme—transforming it into something scalable.

Everyone learned the technique named after him and came to love it. Even now, decades later.

But there was one problem with it: though everyone could understand the mechanics of the game, actually succeeding at it was extraordinarily difficult.

Even those who managed to pull it off for years could lose everything in a single failure. So calling such a person a fraud wasn’t all that unfair.

***

A few months earlier.

I was sitting with Ha Yeong-il, discussing things in detail.

“Madoff definitely took a loss this time. But he’s still paying his investors as if nothing happened.”

“...If that’s true... isn’t this a Ponzi scheme?”

Exactly.

The Madoff Fund is the greatest Ponzi scheme in history.

Who is Bernard Madoff?

A self-made fund manager admired by countless investors, a pride of the Jewish community, a pioneer who introduced computerization to the U.S. stock market, a market maker who brought massive liquidity to NASDAQ, and a former chairman of NASDAQ.

Just hearing his résumé, you’d think he was a phenomenal ◈ Nоvеlіgһт ◈ (Continue reading) investor. And truthfully, he was fairly competent.

It’s impressive—most Ponzi schemes don’t last nearly this long.

“I don’t know exactly where the fraud starts or ends. Maybe this time he just covered it up by dipping into his capital. But what I do know is... at least 20% of this is fraud.”

I smiled sweetly as I spoke. Claiming it was “just part” fraud was a way to soften the blow—because saying it had been a scam from the start was just too shocking.

Normally, calling part of something a fraud wouldn’t hold up—but in Ponzi terms, it actually makes sense. Even paying out 10% to investors while earning only 5% qualifies as fraud.

Still, the shock of it must’ve gotten to Ha Yeong-il—he just stared blankly into the air.

“...”

–Pat, pat.

I gently tapped his shoulder and continued.

“Don’t worry too much. At least we figured it out early. The longer a Ponzi goes on, the more devastating the collapse.”

“That’s... true. But how did he manage to keep it running for over twenty years?”

“Well... aren’t we kind of the same? We funneled hundreds of millions into Eastern Europe and nobody caught on.”

“Still, Alpha Fund’s a bit different. We report 30% gains when we actually made 50%. At least we gave clients real profits.”

Mm. That’s technically still fraud though.

But I bet even those defrauded would turn a blind eye. It’s hard enough to make 20% anywhere else.

“Madoff’s reputation is what kept him from getting caught. People think, ‘There’s no way he’d commit fraud. Someone that famous?’”

Madoff was a revered Jew.

After the financial crisis, trust within Jewish financial networks would be shaken—but Madoff was the one who caused that fracture in the first place.

He wiped out the investments of countless prominent Jews with his scheme. No matter how strong ethnic solidarity might be, you only get betrayed once before the door slams shut.

Pause.

“...Wait a second. But Miss, why are you...”

Snapping out of his daze, Ha Yeong-il finally processed something.

“You’re wondering how I know this?”

“No... It’s not the first time you’ve known something like this. What I want to ask is—why are you telling me this?”

“Hm... Because obviously we have to expose his fraud. A champion of justice can’t forgive someone who mocks the sanctity of capitalism.”

“...”

Tch. Why doesn’t he believe me?

Seeing Ha Yeong-il look at me like I was speaking nonsense, I sighed.

“Sigh... Think about it. What happens if a $5 billion scam gets exposed?”

“...More regulations?”

–Snap.

I flicked my fingers.

“Exactly! That puts us at risk too.”

In the original timeline, this Ponzi scheme would be revealed after the Lehman collapse. But because of my interference, history’s already changed—it could unravel much sooner.

It’s not like the Madoff Fund has been sailing smooth all this time. He barely scraped through multiple crises before it all blew up in 2008.

Now, if for some reason he can’t get enough new investors and starts running short on cash?

That’s the end. A massive financial storm will hit the U.S.

And it’ll be outside my control.

“There’s another upside—not just risk management. We’d also gain credibility with the Jewish community.”

There are many cartels in the world.

Tightly-knit cultural and historical networks—groups that pool their money and knowledge internally and create tremendous synergy.

At the extreme end of that synergy sits the institution of the nation-state.

“Jews... Right. Now that you mention it, Alpha Fund’s Jewish investment share has always been low.”

“To them, losing 10% or 20% in returns is a price worth paying—for trust.”

The Jewish community is notoriously hard to break into. That door stays shut.

If you think about it, who would invest in a fund that returns 10% higher than others and still pick someone else?

Yet people do exactly that—choosing lesser funds over Alpha Fund because of trust.

It’s infuriating. How dare they trust someone else over me?

Anyway, this is how it works on Wall Street. In the hedge fund world, what matters more than return rate is fundraising power.

In other words: connections.

“Understood. Then I’ll start sounding out the Jewish contacts I know. Do you have a timeline in mind?”

“Next year—late 1993. I plan to kick it off then. Should all be wrapped up by 1994.”

“...That late? Shouldn’t we expose it right away?”

Eh. I’m not a saint.

“This scam’s over twenty years old. If we rush it just to save a year or two, we might end up getting hit ourselves. Let’s do this carefully.”

Plenty of people had tried to topple Madoff’s empire. But they were all crushed by his immaculate network of relationships.

Catching a big fish requires meticulous preparation.

With a faint smile, I began laying the trap.

***

There’s something else that Buffett quote implies—

“You find out who’s been swimming naked when the tide goes out...”

Namely: the tide has to go out. And someone has to be naked, of course?

“The U.S. market’s still in a bull run. Madoff’s scam won’t be exposed so easily under these conditions.”

“...Wait. Are you saying you’ll cause a market downturn?”

Si-hyun, whom I met again after a while in Korea, asked something ridiculous.

“What the heck? Like I could control the market? The trend is the trend—you can’t fight it.”

“Hm... Got it.”

“Hey now, you don’t believe me? Our little Si-hyun’s gotten cheeky, huh?”

–Thud thud.

I mock-punched her, and she dodged easily, then lifted me up and dropped me onto the bed.

What the—

‘...Why’s she so strong now? Did Russia do this to her?’

Tch.

“Still, you probably do have a plan.”

Lying sprawled across the bed, I nodded.

“Mhm, you’re right. If we’re not in a bear market, we’ll just make them invest in one. The U.S. market isn’t the only market, you know?”

Lately, Europe hasn’t been doing so hot.

Who knows why, but Barings Bank went under, and the pound and other currencies plummeted.

Luckily, even in the midst of that mess, Alpha Fund recorded record profits.

I’m proud.

“But Ponzi schemes usually don’t reveal their portfolio, do they? And there’s no guarantee Madoff’s investing in Europe.”

“Exactly. That’s why this part is key.”

I closed my eyes, sinking into deep thought.

What kind of trap... would catch Madoff?

‘Ah, this is fun.’

And the idea came quickly.

“First, we’ll have institutions tied to Alpha Fund invest in Madoff Fund... then pull the funds back out. And then we anonymously report it to the SEC.”

“Will the SEC even listen...?”

They will. I know they raised concerns in the original timeline. freewёbn૦νeɭ.com

As I said, Madoff Fund’s suspicious behavior was already on the radar. People just... ignored it.

“That’s why this is all groundwork. In the end, it’ll be the investors themselves who expose the Ponzi scheme. Of course... with some help from that friendly law firm we introduced them to.”

Smiling, I slowly began organizing the profiles of the famous lawyers I remembered.

Hmm... who’s the best fit?

Someone discreet... but also greedy.

‘Phew. At least there’s no shortage of options.’

I’d been meaning to build some ties into the U.S. legal system anyway. This worked out perfectly.