The Bernard Madoff Investment Scandal Essay

2640 Words 11 Pages
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 …show more content…
Eventually, his scheme reached a staggering 50 billion dollars under his management. It came to an end after market conditions led to a considerable amount of redemptions when investors started to take their money back.
After Bernard Madoff, a former NASDAQ chairman, was arrested on December 11, 2008, he acknowledged that his performance was nothing but the Ponzi scheme. He pled guilty to the biggest investor fraud ever committed by anyone on March 12, 2009. On June 29, 2009, he was sentenced to 150 years in prison.
Stakeholders
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.
Investors that took the biggest losses, which was in the billions, because of this scheme are named in the Wall Street Journal; among them are Fairfield Greenwich Group, Tremont Capital Management, Banco Santander, Fortis, and many others.
Investors lost their money because of their lack of conscious and unwillingness to understand or realize that it is impossible to have such high returns in a legally managed…