Research Paper On Madoff

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

Madoff admitted to this fraud in March 2009 and was sentenced to 150 years in prison. While the total scheme is estimated to be about $50-65 billion from his investors would account to less than $10 billion when discovered. Although the Madoff scandal revealed the activities were illegal and unethical, another scandal equally present in the scheme was that the U.S. government and regulators failed to protect investors.

Bernard Lawrence “Bernie” Madoff born April 29, 1938. The founder of Bernie L. Madoff Investment Securities LLC. Madoff was the chairman until his arrest on December 11, 2008. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted turning his wealth management business into a massive Ponzi scheme.

Madoff required a $100,000 minimum to invest, was by invitation only, and made each client feel like they were his only client (Ferrell, Fraedrich, & Ferrell, 2018). He was a highly successful business man who was respected and trusted for his knowledge of investments. Madoff had clients begging him to invest their money. The reason, he claimed he could make 10 to 12 percent on returns for investors no

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

Judge Denny Chin presided over the Bernie Madoff Ponzi scheme case where Madoff was sentenced to 150 years in prison. “The penalty sparked a burst of applause in a courtroom packed with victims of the fraud.” (Frank). Mr. Madoff ruined hundreds of lives that put their life savings and trust in his hands. Bernie expressed remorse after fraud victims address their concerns in the courtroom in regards to massive Ponzi scheme. Friends and family were not there to support Madoff in his day of sentencing and remain inadequate of further information of details about the fraud. Bernie Madoff is believed to have betrayed everyone including his two sons who work for the investment firm. Rich and poor people alike shared in this despair after all of their

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

No introduction Bernard Madoff, sentenced in 2009 to 150 years in prison for organizing the largest chain of Ponzi scheme of all time. He had thus managed to rip off nearly 20,000 investors to whom he

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

All of that money is assumed to be gone”. Others try to pinpoint just how did Mr. Madoff lose all of that money? Most really don’t know and can’t say for sure. According to the Wall Street Journal, Mr. Madoff indicated that he traded stocks and options through European counterparties, instead of his own trading firm,. But the records reveal that investigators don’t believe that to be true. There is no evidence that Mr. Madoff lost or made large sums of money on good or bad trades, or that he traded at all. In some recent cases of spectacular losses, the causes were clear. There were wrong-way bets on oil prices, for instance, or mortgages that turned out to be toxic, but there is no indication that Mr. Madoff made any such bets. Nor are there signs that he simply wasted the money on a lavish life style. While he did enjoy a lifestyle of the rich and famous life, he owned a stock-trading business that could have provided him with enough money to fund it. Many have asked if there is any money left over to repay all of the swindled investors. Since most don 't know if he lost any money or how much he ever had, investigators don 't know what might be leftover, or where it might be. Investigators in the SEC and in the Securities Investor Protection Corp. are looking for the money by trying to follow the money trail. However it is probably safe to say if he was smart enough to outsmart thousands of investors out of their money, he is probably smart

Even during these early days in business Mr. Madoff practiced some shady business ethics. Mr. Madoff began to have his father-in-law “manage” the new clients that he brought to invest with Bernie (PBS.org, 2009). Bernie was also not licensed as an investment advisor for the number of clients he had grown to serve. State and Federal securities regulation during the time period was slack and Mr. Madoff was just one of many advisors without proper licensing.

A well-respected financier, Madoff convinced thousands of investors to hand over their savings, falsely promising consistent profits in return. He was caught in December 2008 and charged with 11 counts of fraud, money laundering, perjury, and theft.

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.

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.

Madoff reportedly admitted to investigators that he had lost $50 billion of his investors' money, and pled guilty to 11 felony counts—securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan—on March 12, 2009. While the extent of his fraud is still being uncovered, prosecutors say $170 billion moved through the principal Madoff account over decades, and that before his arrest the firm's statements showed a total of $65 billion in accounts.