Why'd Corey leave $50 million in the funds?
I'm guessing it wasn't because he thought it was the best place on earth to invest his money. I'm thinking that he left the money in because he couldn't get it out. After 2008, there was no new money coming in. I suspect that from the beginning and all along, Corey paid the exorbitant fees to himself mainly from new cash coming in. Was he ever executing the "conversion' strategy all that well? Wasn't new cash coming in from the limited partners the main source of cash for NIR? And once that dried up, there was no way he could liquidate assets to raise money. So far, the liquidators have been unable to liquidate any assets. Corey referred them to a couple of potential buyers of NIR paper, but they were dead-ends.
If this analysis is true, it means there wasn't much difference between Corey and Madoff, not really. Unlike Madoff, Corey was making investments, that is, he was handing over huge amounts of money to the various fly-by-night penny stock scasmmers. But how many deals did he actually finish, whereby through converting to stock and selling on the open market he was able to recoup all the principal and interest from the loan and close out the investment? Did it ever happen? Even once?
