Bernard Lawrence Madoff: Con Man

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A ponzi scheme is a process that can be very successful, but is illegal and can be devastating to its victims. The leader of the ponzi scheme must convince people to invest their money with promises of high return rates. It relies on the constant addition of new investors because the older investors get money from the newer investors (Sallinger, 2013, 571). Bernard Lawrence Madoff ran a very long and successful ponzi scheme before getting caught and arrested in 2008. His ponzi scheme caused great hurt to many people inside and outside of the company.
Bernie Madoff had a role in finding the Nasdaq stock market in 1971. Nasdaq became a fast and easy way to trade stocks. New York Stock Exchange specialists charged a small fee for trading stocks, but Madoff would pay firms a small amount for their orders. This was called, “payment for order flow” and was a completely legal way to conduct investments. It was very controversial, however, and many New York Stock Exchange specialists were up in arms about it. NSYE specialists complained that payment for order flow was unfair and was influencing firm’s decisions of who to invest with. The NASD reviewed this process in 1990. In the end, the NASD panel decided that the process was no different from other inducements offered on Wall Street (Bandler & Varchaver, 2009). This allowed Madooff to continue to be a big player in trading. The spread was where Bernard L. Madoff Investment Securities LLC was able to make most of their money.

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