Some of the world's largest and most sophisticated investors lost money in the alleged Ponzi fund run by New York asset manager and market maker Bernard Madoff. To prevent such howlers in the future, Financial News has compiled a list of 10 danger signs that should alert investors during the due diligence process and warn off any commitment of capital.

(1) Does the fund have an independent agency verifying the performance of their portfolios, and are they well known?