Business Ethics Case: Bernard Madoff

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In the year 1960, with money he earned installing sprinkler systems and as a lifeguard on the beaches of Long Island, Bernard Madoff founded “Bernard L. Madoff Investment Securities,” a “trading power” house that would become one of the largest independent trading operations in the securities industry (Washington, 2012). In the year 2000 his company ranked among the top trading and securities firms in the nation. By age 70, his name had become legendary; he was considered to be one of the most “influential spokesmen” on Wall Street. But on December 11, 2008, Bernard Madoff was arrested and charged “in a 20 year Ponzi scheme, which would come to be known as “the most infamous fraud in Wall Street history (Leonard, 2008;
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Investors prized his consistent and steady annual returns. On December 11, 2008, Bernard Madoff was arrested at his Manhattan apartment on charges of multiple counts of securities fraud. His investment fund, which had grown to become one of the largest independent trading operations, was in fact a massive “ponzi-scheme.” In March 2009 Mr. Madoff pleaded guilty to all federal charges filed against him, which included “11 felony counts, including securities fraud, money laundering and perjury” (Washington, 2012). On June 29, 2009, Madoff was sentenced to150 years in prison. Bernard Madoff is now serving his sentence at the federal correctional complex in Butner, North Carolina. Total amounts owed to investors were estimated at $65 billion, most of which were never repaid.
After analyzing the facts we can reasonably assume that:
1. People invested their money with his firm because they believed it to be a legitimate business and recognized Mr. Madoff as a skilled, successful, and experienced financial manager.
2. Those who had invested money did so with the belief that their earnings were due to legal transactions.
3. Investors and employees trusted Mr. Madoff; they believed that he was honest and trustworthy. They invested their money with his firm not just because he promised high returns but because they trusted him as a person.
4. Mr. Madoff had
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