Bernie Madoff Essay

Bernard Madoff, self-made billionaire and public enemy. Bernie was a charismatic man who was once revered as an amazing stock broker. Once you gave him money to invest he assured his clients that their investment would grow about 1% every month. His family wasn’t one of admiration, his father a plumber and his mother a failed broker-dealer. His mother and father both started business but each failed. Having seen this Bernie said: "You watch that happen and you see your father, who you idolize, build a big business and then lose everything”, referencing his father’s sporting goods stores which failed after the steel shortage during the Korean War. This left a lasting impression on Bernie and he was determined to achieve the lasting success

his father couldn’t. Bernie then opened Bernard L. Madoff Investment Securities LLC, in 1960, he started trading penny stocks but years later evolved into a massive Ponzi Scheme. Many ruined lives later Bernie confessed to have started the scheme in 1991 but his account manager Frank DiPascali who had been working at the fund since 1975 stated that it had been happening “for as long as I can remember”. A net-worth cannot be established but it is proven that Bernard Madoff stole about 20 billion in principal funds. He is currently being held Butner Federal Correctional Institution awaiting release a in 2139, an educated guess can point that Bernard will die in jail for his crimes.

Eugene Soltes called Bernie Madoff some years ago and asked: How would you explain your actions and misconduct to students?

“...You know you start out not exactly, at least in my part, not exactly sure what I wanted to do in life other than just to be a success... I clearly was an outsider of that establishment not coming from money or certainly not even a connected family… I built my confidence up to a level where I felt there was nothing I couldn’t attain…Because of the success I had and because I was going against difficult odds I probably didn’t think long and hard enough on some of the things I did… I was able to convince myself that this was a temporary situation because of all of my success I thought that I could continue to do this… In hindsight when I look back it wasn’t like I couldn’t have said no, it wasn’t like I was being blackmailed and I wasn’t afraid of getting caught doing it, I sort of rationalized that what I was doing was okay and it wasn’t going to hurt anybody and it was a temporary thing because of the success that I had and the money I’d made for people I had felt that it was a temporary situation and it was acceptable…”

Partially transcribed from https://hbswk.hbs.edu/item/bernie-madoff-explains-himself
An official Harvard Business School website

In the first interview after his incarceration Mr. Madoff seemed unchanged. He spoke with focus about his business with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.

“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”

While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an email written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.

“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.

He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth.

Mr.

Madoff’s business model was the massive Ponzi Scheme orchestrated by himself. His funds came from a simple yet effective scam, Madoff used the money of new investors to pay the promised return of previous investors. Bernie Madoff’s mark on the economy was not a good one at all. Coming from a struggling family he was consumed by his greed and his success this can be seen by his comments that everyone should’ve known better. Bernie’s willful dismissal of the effects of the crimes brings insight into what kind of man he is. Many in the United States were brought to ruin overnight by a unsympathetic man who blames the investors for their sudden crash. Although illegal and morally wrong Madoff’s crime could only be executed with a certain level sophistication. What made Bernard Madoff’s Ponzi scheme so successful was how atypical the model for it was. The Ponzi scheme usually consisted of a charismatic and witty man trying to persuade you into investing with them, but Madoff made investors feel brilliant he made them feel like they were geniuses for investing with him. If too many questions were asked Bernie would simply say the fund was closed. Madoff’s mistakes were simply and could easily be avoided, besides the obvious criminal actions, Bernie trusted entrusted his family which turned him in. The major set piece in all of this would be Bernard Madoff’s thirst for success and his craving of greed. Bernie’s cold heartedness can be seen through one of his quotes describing jail “It’s actually very pretty. More like a college campus. Everything is provided for you.” Other of his quotes include “In today's regulatory environment, it's virtually impossible to violate rules” and “Today, basically, on Wall Street, the big money is made by taking risks” These prove to be ironic as both show a contradiction between his mentality and his actions. Along with these come views on the government, “The whole government is a Ponzi scheme”. Finally my personal favorite, “Wall

Street is one big turf war. By benefiting one person you are disadvantaging another person”.

As an entrepreneur I would like to create tangible cybernetics. These would be small computerized upgrades you could buy for yourself, either as a luxury or as a necessity. My company would be at the head of two forefronts, the research industry and the market leader and will gain a majority of its profits from investors. My cybernetic upgrades would range from shortcuts to life altering modifications. One of these upgrades can be used as a simple personalized computer seen only through your retina or as a way to revive inactive or dead nerves in paralyzed areas.