Madoff Ponzi Scheme And Whistleblowers

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.

Bernie Madoff was one of the most prolific Ponzi-scheme artists in history. Madoff schemes netted him millions of dollars. Mr. Madoff used his BMIS Bernard L. Madoff Investment Securities a New York Limited Liability company, to commit fraud, money laundering, and perjury. This is just a few things that Mr. Bernard Madoff has done to many innocent investors, who believed in Mr. Madoff, and everything he stated. Due to Mr. Madoff’s action he has changed so many people’s lives. Some have lost everything, some committed suicide, and others just humiliated by Mr. Madoff. This paper is to tell you about Mr.

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

We chose Bernard Madoff’s case because we thought that we could relate his case to many unethical behaviors. The analysis can be made on decision making and lack of ethical training which we think is an important topic to focus on this course.

Numerous ethical issues are present in the Madoff case. Firstly, Bernie Madoff’s actions are unethical by the majority of moral philosophies. The teleological ethical theory of egoism is one of the few moral philosophies that could rationalize Mr. Madoff’s behavior (Ferrell, Fraedrich, & Ferrell, 2015). Through an egoist moral philosophical view, his behavior could be seen as being in his interest of gaining finance, power, and reputation, even if did come to an abrupt end. Stealing and dishonest behavior are otherwise viewed by most moral philosophies as unethical behavior. Ethical issues were also present in the cases of his associates and those that should have been more aware of his actions. Those involved directly with Mr. Madoff’s fraudulent

Bernie Madoff ran one of the largest (if not the largest) and longest-running Ponzi scheme in the United States. The website BusinessInsider.com says Madoff made off with about $20 billion of investors’ money. He was very well-known and trusted in the financial industry. He even started his own investment firm in 1960 and helped start the Nasdaq stock market. He promoted his investment “profolio” to be highly exclusive, and even required a recommendation from a friend. He even kept the “intrest rate” of return at 10% to be more believable. But once the housing market crash occurred, tons of investors became nervous and asked for there money back. With $7 billion dollars of pending buy outs, and Madoff only having about $300 million there was no way Madoff could cover his fraudulent portfolio. He now is serving 150 years in prision due to his fraudulent

A Ponzi scheme like Bernie Madoff had more elements than usual. The (SEC) did not investigate Bernie Madoff because of his impeccable business history. Bernie Madoff already had a successful investment firm. The (SEC) felt that this could not be happening. The chance

Bernie intently accepted large sums of funds from investors with the knowledge that he was not going to make legitimate investments with his the stackholders money. Bernie Madoff’s was conducting his business practices off of maximizing profits for himself over twenty years, which he intentialy defrauded his clients of almost sixty-five billion dollars. It is in my opinion that Bernie Madoff’s apparently knew what he was doing when he was engaging in un-ethical practices. When Madoff pled guilty to all charges in March 2009, which includes securities fraud, mail fraud, false statements, false filings with the SEC, investment advisor fraud, wire fraud, money laundering, and theft from an employee benefit plan, I believe that he completely understood that his scam would be exposed at some time.

It is almost impossible to conclude or prevent individuals from being unethical, especially when billions of dollars are being transferred daily. Furthermore, people seem to always find a way to maneuver around standards and regulations when money is involved. Also, the continuous creation of new technology allows people with the mindset of a Madoff the ability to avoid detection from his or her criminal behavior for some time. Without the help of federal regulators, a person like Madoff should not have had the opportunity to run a Ponzi scheme of this magnitude for so long. Moreover, federal regulators of the SEC were created to protect investors and these investors depend on the system developed by the SEC to uncover fraudulent behavior in a timely manner. “Madoff had attracted a wide following because he delivered consistently high returns with very low volatility over a long period. He claimed to use a split-strike conversion strategy to obtain these low-risk returns” (Bernard, & Boyle, 2009, p. 62).

Bernard Madoff had full control of the organizational leadership of Bernard Madoff Investments Securities LLC. Madoff used charisma to convince his friends, members of elite groups, and his employees to believe in him. He tricked his clients into believing that they were investing in something special. He would often turn potential investors down, which helped Bernard in targeting the investors with more money to invest. Bernard Madoff created a system which promised high returns in the short term and was nothing but the Ponzi scheme. The system’s idea relied on funds from the new investors to pay misrepresented and extremely high returns to existing investors. He was doing this for years; convincing wealthy individuals and charities to

There are many peculiarities in Madoff's world that contributed towards making his mind’s outcomes so very suspicious. The answer to how Madoff was still able to conceal his fraud can be explainable through his techniques, methods, and darkly hidden tricks that he has been demonstrating throughout his long period of wrongful criminal deception.

This paper introduces Bernard L. Madoff a fraudster who orchestrated a multi-billion dollar Ponzi scheme. The paper discusses elements that make up a Ponzi scheme and explains what a Ponzi scheme is. The paper goes on to introduce some of the victim’s and examines some reasons why someone might fall victim to a Ponzi scheme. The paper describes the three elements making up the fraud triangle and how they relate to the fraud and the fraudster. This paper covers Bernard Madoff’s background and history and how he committed the fraud analyzing the fraud triangle. The paper describes ways to correct the issue, accounting principles violated, and recommendations for a fix. Finally, the paper looks at internal and external controls violated and ends with a conclusion.

I would first like to begin this paper by saying why I decide to chose this topic out of the 3 choices. I believe that all of the choices were credible and a viable topic in their own regards, but the reason this one hit home for me was because of the simplicity of the scandal. It’s hard to believe that someone could have made off with the amount of money Bernard did when the idea of a Ponzi scheme was notable as early as the 19th century, and was named after Charles Ponzi in 1920 after his scandal created enough issues to make it more aware to the public of what was happening. The fact that this happened almost 100 years later at the level that it did and where it happened made me extremely concerned and interested in the topic. In this paper I will cover the details happening up to the scandal, the scandal itself, the people involved in the scandal, the legislation and regulations implemented after the scandal, and my views on the outcome of the scandal.

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”