What we can learn from the Bernie Madoff scandal.
If there’s one thing lacking in the business world these days, it’s trust. You can thank a lot of people for that, including Bernie Madoff. Madoff stole over $50 billion of his clients’ money. Here are some lessons from the Madoff scandal that can be applied to the domain name world.
Even the best registrars should be watched. Madoff managed to push aside any attacks on his investment operations. He was considered an upstanding member of the community and was even the former chairman of the NASDAQ stock exchange. Madoff was never a good person, but he managed to get to high places and live a lie. That’s one of the reasons I’m glad ICANN’s proposed new registrar accreditation agreement includes the right for site audits. ICANN should perform site audits on registrars, and not just ones it suspects of wrong doing.
Don’t trust someone just because someone else does. Just because someone you know has done business with a particular domainer, don’t let your guard down. If you’re uncomfortable in a domain transaction, ask to use an intermediary or escrow service. Never let someone tell you “c’mon, you have nothing to worry about. Just wire me the money.”
Do your own due diligence. One thing I’ve noticed about rich people is they tend to pile into something like lemmings. They never want to be the first person to join a club or make an investment, but once someone else does they assume that person did his or her due diligence. Before entering into a domain transaction or using a service, do your own due diligence.
If you think of any other lessons in this scandal that can be applied to domaining, please comment.
hennie meijer says
So who trusts the Icann to keep an eye on the registrars? You should not trust the skills and capabilities of these “supervisors” is a more important lesson. The danger is that because these supervisors say they check them, you think that they are ok.
Try to diversify.Do not put all domains/transactions/business with “your best registrar” but spread your risk over “your best 3-5 registrars” and forget about all the bulk discounts/ease of use when you stick to just one of them. Same for anything, spreading your risks is tiresome/more costly but your best chance of not being”wiped out” in one shot. it is very difficult to do as some companies seem so superior to the second and third best in their field.
Lda says
> Do your own due diligence ….
Those who did their due diligence and got out of the Bernie Madoff scheme because they ‘smelled a rat’ are apparently those MOST likely to lose their profit stash in the 6-year clawback. Apparently you’re more likely to hold onto the withdrawn funds if you were blissfully ignorant of the dangers.
Message for domains ? … you tell me.
Patrick McDermott says
“…they tend to pile into something like lemmings.”
And so do many domainers.
You saw it with LLLLL.coms that are now dropping like flies after the bug spray
was set off.
You saw it with .MOBI after Rick Schwartz bought Flowers.mobi for $200K.
You’re starting to see it now with CCTLDs.
Yes you might make lots of $ with them but you better know the language and know what you’re dong.
Patrick McDermott says
Actually I meant to say LLLL.coms but same is true for LLLLL.