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Bernie Madoff Case: The World's Largest Ponzi Scheme

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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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As long as new funds keep flowing in, Madoff could continue to pay off existing investors and maintain the crime. The scheme eventually collapsed in December 2008, during the global financial crisis, when Madoff confessed to his sons that the investment business was a fraud. The estimated losses from the scheme were around $65 billion, making it one of the largest financial frauds ever. The scheme unraveled during the 2008 financial crisis when investors started to withdraw their money and Madoff couldn't keep up, proving the fraudulence. Madoff was arrested and pleaded guilty to various charges, including securities fraud, investment advisor fraud, and other crimes.

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In the case of the largest Ponzi scheme discovered in U.S. history, it was conducted by Bernard Madoff. Mr. Madoff was able to scheme the business world elite investors and elite members of society. Bernie Madoff was able to conduct this scheme for years without question or suspension due to his charming personality, reputable character, the verified reporting of earnings, and most importantly his connections. There was seldom inquires of his methods due to the fear of being ostracized from this exclusive group. Bernard Madoff Investment Securities was operated by Bernie’s closest family members and relatives.

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Madoff, as a financial professional, betrayed the trust of his clients who relied on him for honest advice and ethical investment practices. The betrayal of trust is seen as a fundamental violation of virtuous conduct. Virtue ethics emphasize personal responsibility and accountability. Those involved in Madoff's scheme, whether through active participation or negligence, are scrutinized for their failure to uphold virtuous qualities such as responsibility, accountability, and a commitment to protecting the interests of others. Virtue ethics encourages individuals to demonstrate courage in the face of wrongdoing.

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He was gotten in December 2008 and accused of 11 tallies of extortion, tax evasion, prevarication, and burglary. On the off chance that Madoff hadn 't confronted $7 billion in recoveries, this Ponzi plan won 't not have been found. Beside the effect on stocks in general, the introduction of misrepresentation on a huge scale is additionally destroying to people who trusted Madoff with their fortunes and to charitable associations like Yeshiva University, which depended on Madoff 's indicated mystery exchanging framework to work its foundations. Sterling Equities, the speculation vehicle of the Wilpon family, which possesses the New York Mets baseball group, had $300 million supposedly put resources into Ascot.

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Keeping in line with this overall pattern of thought, one could easily say that for Bernie Madoff, self-interest was the only thing the man ever thought about! This is an understandable and logical line of thought, after all the man was convicted of 11 unique charges ranging from international money laundering to theft from an employee benefits plan and received an unprecedented 150 year prison sentence. However if we take a look at the entire scam from a different perspective, I would argue that Mr. Madoff’s actions were self-destructive and counterintuitive and detrimental to his overall wellbeing.

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Sec Litigation Release # 20834, Bernard L Madoff The Violation and How It Occurred Bernard L. Madoff designed an insidious Ponzi scheme, which resulted in his successful violation of various antifraud legal provisions established by the federal securities laws (Hansen & Movahedi, 2010). At the time of his trial in 2008, the Securities and Exchange Commission (SEC) fronted numerous allegations against the man and his company, Bernard L. Madoff Investment Securities LLC. Among these allegations was a $ 50 billion fraud coupled with contraventions of Section 17(a) of the Securities Act 1993 and Section 10(b) of the Securities Exchange Act of 1934. Madoff and his company were also found to have violated Rule 10b-5, as well as Sections 206(1) and 206(2) of the Advisors Act of 1940.

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In my opinion, Bernard ‘Bernie’ Madoff’s Ponzi scheme was too carefully thought out to be considered a short-term strategy as a means to get ahead. Instead his scheme was fueled by greed and eventually caught up with him and those who were involved with his firm’s unethical behavior. I presume Madoff’s greed for wealth transpired from his moral philosophy of “if we act rich, we become rich”, which was to appeal to others as being more wealthy than e and his family were (cite). In order to keep up appearances, both personally and professionally, Madoff needed to continue the unethical behavior via fraudulent financial activity to account for the movement of funds, which is not in compliance with the regulations set by the U.S. Securities and

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The show then that is not the money at Madoff. And it had a big scandal echoes not only because depositors had lost $ 17 billion of their money in addition to the 65 billion dollars of profits that were promised but also to the fact that this financial pyramid set up by one of the flags of the financial world The Legend of fraud, the owner of the biggest monument in history, he Bernard Madoff. I have been detained Bernard Madoff on December 11 of the year 2008 AD, where his son submit a communication against his father, accusing him of embezzlement and fraud, where the monument more than $ 50 billion, it is considered as the largest investment monument has at the hands of one person, and because of Bernard Madoff has many banks advertising for the loss of more than one billion countries because of him, and this Spanish banks and the Swiss, French and Italian

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It’s apparent that $65 billion is a lot of money and Madoff had been performing the schemes for quite some time to tack up that much in fraud. Since investigators were only able to recover about $1.2 million of the $65 billion loss, Madoff was more than likely able to make fake accounts and off short accounts. It’s obvious that Madoff was able to supply his family and lifestyle with the monies stolen from the investors. The family including Madoff’s wife drove luxury vehicles, wore expensive clothing, and lived in a large homes. Even though Mrs. Madoff was forced to give back $85 million, she was still left with $2.5 million.

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They are there to prevent this types of actions from occurring, so when they happen they are at fault. The fact that they investigated him four times and found nothing looks really bad on them. Taking into account that Madoff used to consult for them, made them look even worse. 4. Even though Madoff offered less outrageous returns, it does not make his scheme any less unethical.

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To believe a 70-year-old industry expert who knew exactly what he was doing was easy. When the economy is doing well then no one complains and therefore regulation isn’t taken seriously, making it easy for Ponzi schemes to exist. Investors such as Steven Spielberg’s charity, billionaire publisher Mort Zuckerman and Nobel peace prizewinner Elie Wiesel’s foundation for humanity are some of the victims (Bernard Madoff $50Bn Ponzi Scheme Scam Scandal, 2008). People thought they were lucky to be able to invest with Madoff because they were promised high returns between 10%-12% (Bernard Madoff $50Bn Ponzi Scheme Scam Scandal,

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Crime is often associated with the poor and the underprivileged, but crimes that are committed by the wealthy and powerful often go ignored or under punished. This causes a major problem is societies. The FBI reported that victims of burglary, larceny, and motor vehicle theft lost a total of $15.3 billion dollars in 2009 (FB1 2010). In comparison, when former advisor and financier Bernie Madoff was arrested in 2008, the U.S. Securities and Exchange Commission reported that the estimated losses of his financial Ponzi scheme fraud were close to $50 billion (SEC 2009). This imbalance stretches all the way through United States Judicial System.

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