Business Ethics Bernard Madoff Essay

1664 Words Jul 6th, 2012 7 Pages
Bernard Madoff was either the most ethically void individual or he just had no regard for ethics. He managed to pull off one the largest Ponzi scheme in history with very little help. He had a legitimate stock trading business on one floor and his illegitimate investment management business was on another floor (Ferrell, Ferrell & Fraedrich, 2011). The top executives in the company were family which leads to the question, did they really not know? This paper will examine the origin of the Ponzi scheme, a brief history of Bernie Madoff, and the fallout as a result of his fraudulent business. A Ponzi scheme is “a fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors rather than …show more content…
Madoff was born April 29, 1938 he graduated in 1956 from Far Rockaway High school and then attended Hofstra University Law School however he did not graduate. He created BMIS in the early 1960’s using $5,000 he had earned by working as a lifeguard and installing refrigeration systems (Gregoriou & Lhabitant, 2009). In the 1980’s using $250,000, Bernie was responsible for developing the first all electronic computerized stock exchange. By 1989 BMIS was trading more than 5 percent of the trading volume on the NYSE (Gregoriou & Lahabitant, 2009). It was around this time that Madoff created his investment advisory company due to the growing competition in the brokerage business. Perhaps the most interesting fact about the Bernard Madoff case is that he had a sucessful and legitimate stock-trading business, so why not just continue with that? In 1960 Madoff started selling over-the-counter stocks that were not listed on the New York Stock Exchange (NYSE), he made his profits in the variation of the offer price and the sales price of the stocks. By the 1990’s the company, Bernard L. Madoff Investment Securities LLC (BMIS), was doing 10 percent of the trading on NASDAQ (National Association of Securities Dealers Automated Quotations) some days (Ferrell, Ferrell & Fraedrich, 2011). Bernie was able to gain peoples trust by building credibility, he did this by holding several respectable positions. Madoff was chair of NASDAQ for

More about Business Ethics Bernard Madoff Essay

Open Document