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The accounts managed by Bernard L. Madoff Investment Securities LLC reported gains of roughly 1% a month like clockwork, with nary a loss, for two decades. Why did that freakishly smooth return not set off alarms among current and prospective investors?

I wonder, is anyone running Benford's Law [1] analysis on whatever meager reported details are available from other firms like Madoff's?

[1] http://en.wikipedia.org/wiki/Benford's_law

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Never heard of this before now, but seems like you should be able to leverage Benford's law somehow as a way to win lots of bar bets.

The number 1 as in 1 percent is the least suspicious number, so Benford's law is unlikely to help.

You can still work with the rest of the digits in the percentage (eg 1.1% should be more likely than 1.9%), I imagine the problem isn't the numbers themselves but the lack of a decent sized sample. You only get 12 numbers for a year and that's plenty of time to lose your shirt to a con man who has your money!

If they average around 1%, that would mean as many .7s as .3s -- very suspicious!

Please disregard this comment, which was idiotic.

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