Warren Buffett memorably wrote: 'You only find out who is swimming naked when the tide goes out'. He was talking about the ability of re-insurers to pay out on a vast catastrophe-related insurance loss in an unfavourable economic environment.

Yet his words could just as easily be applied in the context of the Madoff and Stanford scandals. The economic tide has rapidly receded and many assumed to be suitably attired have been embarrassingly exposed.

Bernard Madoff has admitted to one of the biggest frauds ever committed, and although it remains to be seen whether Allen Stanford has committed any offence, the SEC has levelled substantial civil claims against his business interests.

Read the full story here on Daily Mail Online.