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Bernie Madoff Case: The World's Largest Ponzi Scheme

467 Words2 Pages

The Bernie Madoff scandal of 2008 was the largest Ponzi scheme ever recorded in world history. Never before has someone breached the business ethics standard at such a high level. Madoff had clear ethical responsibilities to both his employees and his clients that he completely disregarded. The U.S. Securities and Exchange Commission (SEC) also played a big role in allowing this scandal to take place as well. They were made aware on more than several occasions that there was question as to how Mr. Madoff’s portfolio was performing impossibly well. A man named Harry Markopolos sent several documents over the years. One being a 19-page document outlining exactly how Mr. Madoff has been fraudulent in his activities. The document was titled “The World’s Largest Hedge Fund is a Fraud”. They continued to ignore these notifications and should have been held responsible and accountable for their lack of ethical execution. As a business professional and a Financial Advisor, Mr. Madoff had ethical responsibilities he was expected to follow. All Financial Advisors are regulated by the Financial Industry Regulatory Authority (FINRA) and expected to follow the “Suitability Standard”. This standard means from an ethical standpoint, they should be selling investment vehicles that are suitable for each individual client based on how well suited they are based on …show more content…

Securities and Exchange Commission’s primary function is to protect investors and maintain fair and orderly functioning of securities markets and to facilitate capital formation. The behavior of this organization demonstrated the exact opposite of what should have occurred when they were notified of possible fraudulent behavior from Mr. Madoff’s Hedge fund operations. This display of gross negligence violates the very reason this entity was formed to begin with. The SEC absolutely had an ethical responsibility to investigate these allegations every time they were brought to their attention and act

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