Bernard Madoff Case

His mother was a housewife and his father was a plumber. Like most families during this time era, they were struggling after the Great Depression. The Madoffs became so fraught over money issues that they began to get into finances. Later, in the 60s his mother, Sylvia Madoff, registered a broker dealer when she opened an office referred to as Gibraltar Securities. Shortly afterwards, the United States Securities and Exchange Commission (SEC) forced closure due to unreported financial conditions. During this time, Bernie Madoff showed little to no interest in finances. As a typical student in high school, Bernie focused on his classes, relationships, and most importantly, the swim team. As a young man, he got a job as a lifeguard on Long Island (Bernard Madoff Biography, 2018). Through this job he was able to save money, which was later used to construct his first

Introduction: Bernie Madoff was a well-respected financier, his company Bernard L. Madoff Investment Securities, LLC was very well known and even helped launch the Nasdaq stock market. Madoffs company was well trusted and he even had celebrity cliental such a Steven Spielberg, Kevin bacon, and Kyra Sedgwick. Madoff came from a low income family however, he was able to start his company from getting a $50,000 loan from his in-laws and he using money that he had saved from side jobs such as lifeguarding and installing sprinkler systems to found his company. The successfulness of Madoff’s company came from the company’s ability to adapt to change and us modern day computer technology. As his business grew he stated employing family members to help “His younger brother, Peter, joined him in the business in 1970 and became the firm 's chief compliance officer. Later, Madoff 's sons, Andrew and Mark, also worked for the company as traders. Peter 's daughter, Shana, became a rules-compliance lawyer for the trading division of her uncle 's firm, and his son, Roger, joined the firm before his death in 2006”(Bernard Madoff Biography 2016) Unfortunately on December 11th 2008 Bernie Madoff became well known for a whole new reason. He had been accused of performing an elaborate Ponzi scheme and he had been reported to the federal authorities by his own sons. A year later he admitted to the investigators that he had lost $50 billion dollars of his investors’ money and pled guilty to 11

Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.”

Bernie Madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the New York Stock Exchange (NYSE). From the 1960’s through the 1990’s, Madoff’s success and business grew substantially, mainly from a closed circle of known investors and friends through word of mouth. In the 1990’s Bernard L. Madoff Investment Securities traded up to 10 percent of the NASDAQ on any given day. With the success of the securities business, Madoff started an illegal money-management business, promising his investors consistent returns from 10-12 percent, unheard of returns at the time, which should have tipped off most investors that something was amiss.

What is right or wrong? People base their values of right and wrong on what they have learned from their experiences (Ferrell, Fraedrich, & Ferrell, 2018). What one person sees as wrong, may be a normal for another. Most people are taught to work hard, save money, and invest for a future retirement. However, when it comes to money, some people lose all principles and standards of behavior. There were several ethical issues in the Madoff case. They include: stealing, cheating, lying, misrepresentation, and deliberate deception. Madoff used the Ponzi scheme or the money pyramid to make his money. In the Ponzi scheme, money was taken from new investors and given to existing customers as earning without being invested. Was this right or wrong? Throughout this case study ethical concerns can be seen on both sides, the investors and Madoff’s.

BMIS engaged in three different operations, namely investment advisor services, market making services and proprietary trading. Bernard Madoff conducts certain investment advisory business for clients that are separate from the BMIS proprietary trading and market making activities. Bernard Madoff has been conducting a Ponzi-scheme through the investment advisor services of BMIS, and through their scheme have defrauded investors out of monies estimated to exceed $50 billion. When a senior employee was told by Madoff that there had been a request from clients for approximately $7 billion in redemption and he was struggling to obtain the liquidity necessary to meet those obligations. Madoff also told another employee on December 9, 2008 that he wanted to pay bonuses to employees of the firm. This was earlier than bonuses were paid, and also with another employee admitting that his investment advisory business was a fraud that it’s all just one big lie and that it was basically giant Ponzi scheme. Bernard Madoff also informed employees that he planned to surrender to the authorities but before he does that he had approximately $200-300 million left and planned to use that money to make payments to certain selected family and friends. Madoff would make people believe that BMIS was a legitimate enterprise engaged in the lawful brokerage and sale of investment securities, when BMI

This essay intends to critique and analyse the research paper, in order to evaluate the strengths and weaknesses of the research undertaken. Certain questions are required to ensure that the evaluation is assessing the essential components of the research (Holloway& Wheeler, 2002). Therefore Holloway and

Most people, when they hear the word “crime,” think about street crime or violent crime such as murder, rape, theft, or drugs. However, there is another type of crime that has cost people their life savings, investors’ billions of dollars, and has had significant impacts of multiple lives; it is called white collar crime. The Federal Bureau of Investigation defines white collar crime as

On Dec. 11, 2008, Bernard Lawrence Madoff confessed that his vaunted investment business was all "one big lie," a Ponzi scheme colossal in volume and scope that cost investors $65 billion. Overnight, Madoff became the new poster child for Wall Street gall, greed and

White collar crime is defined as "A crime committed by a person of respectability and high social status in the course of his occupation" (Lesson Nine, Pontell/Sutherland 2018). In my studies over the subject I've come across a major white-collar case that fits with the descriptions Sutherland presented: Poverty and broken homes do not always equate to crime, those who come from a well-adjusted lifestyle are just as liable to commit acts of deviance. Sutherland stated that the actions of corporations resembled those of professional predators, such as con men and bank robbers. Furthermore, some issues as to why those that are wealthy that can get away with these acts is because white-collar crime itself is not a legally defined category of

To combat this assumption it turns out large amounts of money of the value of $300million was invested in Bernard Madoff accounts in the form of pension funds. Some officials knew that the unscathed performance of Madoff securities were too good to be true as their prices consistently climbed up in spite the financial crisis. However, still they pawned its own shareholders’ funds with the hopes of jumping on the same band wagon as Madoff and reaping further profits. Another angle at probing the case was that the CEO, directors as well as executives were only looking out for themselves. Evidently they had direct benefits in the form of handsome compensation packages for retaining high profile clients such as Madoff and Wise which

Madoff was able to align himself with wealthy individuals, leaders involved in foundations, business entities, and government. This gave him unlimited access to different groups of investors. Among Madoff’s Ponzi scheme victims, it is easy to find wealthy individuals, charitable organizations, and its stakeholders, such as employees, communities, vendors, and even the government.

Some may consider the Madoff Ponzi scheme as a successful wake-up call to investors. While the events that took place destroyed financial portfolios it was a chance for investing houses to improve. More due diligence in auditing has taken place since the Madoff Ponzi scheme (Gandel, 2008).

Bernard L. Madoff Investment Securities LLC operates as a securities broker/dealer in the United States and internationally. It provides executions for broker-dealers, banks, and financial institutions. The company was founded in 1960 and is headquartered in New York, New York. As of December 15, 2008, Bernard L. Madoff Investment Securities LLC is in liquidation.

David Friehling and his firm Friehling & Horowitz (F&H), a small accounting firm located in New City New York, issued an on Bernard L. Madoff Investment Securities LLC’s (BMIS) books from 1991-2008. Located in New York City, BMIS registered with the Commission as a broker dealer and as an investment adviser. Its three operations provided investment adviser services, market making services, and proprietary trading. In December 2008, it was revealed that Madoff’s BMIS firm was a massive Ponzi scheme that defrauded thousands of investors of billions of dollars. During this Ponzi scheme, as stated in the complaint-Sec vs. David G. Friehling & Horowitz, CPA’s, P.e., David Friehling enabled Madoff throughout the “process by falsely representing