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Bernie Madoff's Ponzi Scheme

2159 Words9 Pages

The Ponzi scheme Small investors, financial institutions, global banks, police departments’ pension funds, the list goes on. These corporations were targets for scammers to feed a desire that wreaks havoc on these types of victims because greed is the key factor. When making deals in secrecy that’s too good to be true, one would have to expect to get a call one day informing them they have been conned, swindled, or defrauded. If you can’t trust a regulatory agency such as the Securities and Exchange Commission for vital answers when inquiring about any investor, who can you trust? Ponzi schemes rely on inside help. Many articles believe that Madoff operated in a gray zone for years and that the Securities and Exchange Commission as well as …show more content…

Bernie Madoff used the vulnerability and trust of his investors to fuel his ego and passion for greed. Although he did have the right setup for internal control, checks and balances, he committed accounting fraud, abuse of power and conflicts of interest (Cochran, 2012). There was a lack of Tone-At-The-Top (Madoff had complete control over monies and investment decisions for Avellino & Bienes). Perhaps there was not an awareness of ethical responsibility between the Securities and Exchange Commission and Bernie Madoff, but when you have many investors motivated by personal gains being produced by such high returns, they too have unknowingly become involved in the fraud as well. Hartman (2012) states that when we act under the umbrella of ethics, we acknowledge our responsibility for the indications of what we say and do, which is why we should pay attention to our decisions, do some evaluation and learn from our outcomes and actions as individuals. However, we must be able to look beyond our blind …show more content…

There are many steps the Securities and Exchange Commission should take to protect the interest of investors such as a customer service department to follow up on complaints against investors, execute thorough and detailed examinations of complaints, send someone to the company to understand how the business is running it’s day to day operations to increase transparency, increase penalties on businesses that running fraudulent practices. Prezi lists some steps the Securities and Exchange Commission has taken to try and insure Ponzi schemes are discovered 1) Revitalization of the enforcement division, 2) revamp how complaints and tips are handles, 3) find a way to encourage cooperation among the inside staff, 4) improve safety measures for investors monies, 5) improve competences relating to risk assessment, 6) perform examination of financial firms to assess their risk, 7) upgrade fraud protection techniques for examiners, 8) hire staff that specialize in the field of examining and auditing, 9) expand training to focus on target areas, 10) promoting the need for a whistleblower program 11) combine broker-dealing and investment advisor examinations, and 12) enrich the credentials of licensing, education, and oversight regime for “back office personnel” (Cochran, 2012 ). The Securities and Exchange Commission is responsible

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Summary Of The Bernie Madoff Case

1565 Words | 7 Pages

Madoff had Complicit knowledge of the fraud that he was obtaining on doing on his client base that they were oblivious to his actual fraudulent Securities, that there actually was no project nor any Securities that they were trading on the behalf of these clients that in an sense it was almost like a pyramid scheme that he would obtain funds from the individual to pay off those investors with the 20% that he guaranteed to give them and then obtained the other 20% from new clients. Explain to them the operation and from the market of how mr. Madoff had actually set out to defraud the clients as well as the Trade Commission U.S. Securities from Bernie L Madoff in the defendants forward from the chairman and head Of the board directors for the NASDAQ stock market interest in in the marketing and maintaining it on Operating the records of fair deals and higher ethics standards that he had been tricking them with Giving them fraudulent information on the firm's activities. The supervisor also advised FBI that on January 7th, 2008 That Mr. Madoff Misrepresented His Holdings and its client base to the SEC Stating that he had between 11 and 25 clients and total approximately 17.1 billion dollars and assets under his management However, he had less clients and he only had approximately 7

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Greed: Bernie Madoff Fraud Case

153 Words | 1 Pages

Greed is the only option that can support Bernie Madoff decision on becoming a criminal. He was already well off from the start of his parents under the table schemes he just wasn’t satisfied. According to biography.com the Madoff parents seems to have started their under the table schemes in the 1960s when he was just a child, they started when his mother registered as a broker-dealer and listed their home as an office and called the company Gibraltar Securities following that the SEC forced the closure of the business for failing to report its financial condition. The only thing that can refute he did the right thing by engaging in fraud was he was following his mother guide on running the business and his business traits were passed down

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Bernie Madoff Research Paper

464 Words | 2 Pages

Bernie Madoff was an American financier and former chairman of the NASDAQ stock exchange. He ran one of the largest Ponzi schemes in history. He built an elaborate scheme that lasted for decades, fooling investors and experts alike. To start, the promise Madoff enticed investors with the promise of consistently high returns. He claimed to have a secret strategy that allowed him to generate steady profits, even during market downturns.

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Does The SEC Bear Any Responsibility In The Extent Of The Madoff Scheme?

613 Words | 3 Pages

However, the SEC failed to properly investigate to stop the financial fraud led by Madoff. When the SEC was given the several reports documenting the risk of fraud, the SEC ignored and failed to investigate a scheme that could have been prevented during the first investigation submitted in 2000. 4. Does the fact the Madoff offered less outrageous returns (10-18 percent per year) on investments compared to Ponzi’s promise of a 50 percent return in only 90 days make Madoff any less unethical? Why or why not?

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How Did The Gilded Age Affect The Economy During The Gilded Age

467 Words | 2 Pages

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Bernard Madoff's Largest Ponzi Scheme

187 Words | 1 Pages

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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Bernie Madoff Case Summary

621 Words | 3 Pages

He took trusting people’s money away from them. Stacey McAlpine did the same thing. They both found a way to steal money from those who would least expect this to happen. In Madoff’s case some were friends, which stealing from someone is bad, but stealing from people who you are very close with is

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Summary Of The Bernie Madoff Ponzi Scheme

216 Words | 1 Pages

Being a Registered Investment Advisor, the Bernie Madoff Ponzi scheme has been an interesting fraud case to study. Moreover, Ponzi schemes are a type of social network where investors are influenced through a social tie (Nash, Bouchard, Malm, 2017). Furthermore, Bernie Madoff utilized a Ponzi scheme to entice investors by guaranteeing unusually high investment returns. In addition, to avoid having numerous investors reclaim profits the Ponzi scheme encourage the investors to stay invested with the promise of larger returns (Yang, 2001). Additionally, Ponzi scheme ran by Bernie Madoff, used the money from new investments to pay off the promised returns to older investors.

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How One Big Lie Can Destroy Thousands Of Lives By Bernard Ponzi Scheme

612 Words | 3 Pages

However, as said by author that Ponzi scheme cannot stand a long and Bernard’s falsification is exposed in 2008 as having no business ethics’ implementation and it is found that almost $65 billion of 4800 clients is put at the risk by Bernard and he and his companions, mostly his relatives are found guilty and punished with various fines in the different categories of financial crimes.

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Robert Allen Stanford And The Ponzi Scheme

670 Words | 3 Pages

Numerous news outlets have covered the story of Robert Allen Stanford and the Ponzi scheme perpetrated by Stanford International Bank (“SIB”). Given the extent of the fraudulent misdeeds, questionable involvement of the Securities and Exchange Commission (SEC), and the ultimate price paid by the victims, Mr. Stanford’s scheme has received far less media attention than its close equivalent represented in the Ponzi scheme orchestrated by Bernard Madoff that was uncovered only months before the Stanford scheme surfaced. In a brief historical recap on the life and business ventures of Mr. Stanford, Matthew Goldstein discusses Mr. Stanford’s interesting career background, beginning with a failed business venture as the owner of a chain of health

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Bernard Madoff's Ponzi Scheme

491 Words | 2 Pages

The Ponzi scheme lead by Bernard Madoff was one of the largest Ponzi schemes in history. According MSN money, the SEC knew about the potential fraud in 1992 but were unable to catch him until he confessed in the year 2008. “Madoff did not steal the alleged $65 billion, in fact, he actually stole $20 billion in principal fund that were invested into the firm. Madoff is arrested on one count of securities fraud for allegedly operating a multibillion-dollar Ponzi scheme from his investment advisory business. He is released on $10 million bail.

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Bernard Madoff's Ponzi Scheme

281 Words | 2 Pages

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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Tylenol's Ethical Dilemmas

1299 Words | 6 Pages

In the Ponzi schemes there were two men in particular Charles Ponzi and Bernard Madoff both men knew the consequences of their actions but continued to make unprecedented rates on coupons. Overall out of the three companies that were discussed there were two that made unethical decisions which caused a great deal of impact to the company. Tylenol however made the most ethical decision by recalling millions of product and spending millions on creating a tamper seal for the household brand of

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Moral Philosophies: The Case Of Bernie Madoff

338 Words | 2 Pages

In the case of Bernie Madoff, he was also fraudulent against a few of his investment feeders. For example, when Austrian

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1179 Words | 5 Pages

“Chasing Madoff”, a documentary released in 2010 portrays the way the whistleblower, Harry Markopolos, uncovered Bernie Madoff’s fraud scheme and his ten-year struggle to get the SEC to investigate. The documentary begins with an introduction to Harry Markopolos and his former coworkers Frank Casey and Neil Chelo. The three men work in finance, with investment portfolios. They were aware that in the finance industry there was much talk about an investment company making their customers high returns. Casey came across some investment information from a client of Madoff and gives the information to Markopolos to look over.

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