One of the ways Madoff was able to woo some of the wealthiest and most intelligent of clients was by serving as Chairman of the NASDAQ in 1990, 1991, and 1993 (Ferrell, Fraedrich, & Ferrell, 2013). He was able to gain reputation and credibility with his vast knowledge of investments, successful networking techniques, promising of consistent 10 to 12 percent returns to his investors, serving on charitable boards and government advisory boards, as well as starting his own company (Ferrell, et al, 2013). Madoff was also able to woo more of his clients by having his name associated with philanthropic works (Murnighan, 2010). Another way that he was successful in wooing wealthy clients was to show future investors that it was a family network within the organization (Ferrell, et al, 2013). Once Madoff became successful with Madoff Securities, he started working with his brother, resulting in his wife, niece, and two sons to follow. He was able to gain the trust, whether he seemed trustworthy or not, the fact still remained that he employed his own family members, showing potential clients how “trustworthy” he was (Murnighan, 2010). …show more content…
The investors of these country club were able to spread word of mouth once about his low risks and high returns. He made sure that each investor was treated exclusively, taking control himself, responding to any concerns promptly, and showing his “appreciation” (manipulation ways) (Bandler & Varchaver, 2009). He also developed relationships with intermediaries and ensured they did as he advised (Ferrell, et al, 2013). Middlemen were not paid as much as Madoff and his family members, however, they could earn a small profit for introducing new investors to