The Code of Ethics and Evaluation

717 WordsFeb 8, 20153 Pages
Elizabeth Thomas Business Ethics February 17, 2015 Professor Mari Hadley Summary and Discussion The author provides an overview of the case of Bernard “Bernie” Madoff, a businessman and investment manager who is believed to have stolen as much as $65 billion from his investors (Stanwick & Stanwick, 2014). Bernie Madoff was operating not only the largest Ponzi scheme in history, but is also believed to have perpetrated the largest financial fraud in history. His network of investors included many prominent people from the financial world as well as the social elite. Madoff’s criminal career came to an end in 2008 when the recession developed. His supply of available funds began to diminish, and he was no longer able to pay his…show more content…
Question 2: Ponzi Schemes Madoff was operating what is commonly called a “Ponzi scheme,” named after a fraudulent investment plan devised by Charles Ponzi a century earlier (Stanwick & Stanwick, 2014). A Ponzi scheme involves the taking of money from investors on the promise of a higher than normal return on the investment. However, the money that is collected from investors in never actually invested into any legitimate businesses or financial operations. Instead, the money that is collected from new investors is used to pay previous investors. Both Bernie Madoff and Allen Stanford were investment managers who engaged in multi-billion dollar Ponzi schemes in recent times (Tolson & Schiller, 2009). Question 3: The Impact on Madoff’s Family and Friends It is true that Madoff’s two sons reported him to the authorities upon his announcement to them that his entire financial empire was a Ponzi scheme (Stanwick & Stanwick, 2014). However, the question remains concerning to what degree they were entirely ignorant of their father’s activities. Is it possible that two grown men with considerable business experience could have worked with their father on a daily basis and remained unaware of his criminal behavior? It is possible though not very probable. It may be that the sons turned on

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