The Controversial Case Of Bernard Madoff

1751 Words4 Pages
bulb-icon

Recommended: Madoff scandal

The most controversial case of fraud in history left more questions than answers. Bernard Madoff, with his company "Investment Securities LLC", chose the easy way to give him greater gains scamming people. Using the prestige he had and giant Ponzi scheme. That was how he was creating his fraud. Madoff did not steal the money immediately but was paid the promised returns with money paid by the entry of new customers paying its customers their profits and not realize and would not take legal action, this intelligent man or charlatan achievement out this scam film for over 20 years. Madoff achieving the greatest fraud in history with losses of more than 50,000 million alone was compared with the Enron case. In June 29, 2009, he was sentenced to 150 years in prison.
Who was Bernard Madoff?
Bernard Lawrence Madoff was born on April 29, 1938 in Queens, New York. His parents were Polish immigrants Ralph and Sylvia Madoff. His parents had a business that "Gibraltar Values” which was an investment and loans, which was closed for not reporting their financial situation was called. Bernard working as a lifeguard and used $ 5,000 obtained from his work to found his investment firm "Bernard L. Madoff Investment Securities, LLC." The Madoff firm offering honest profits and client list included celebrities like Steven Spielberg.
After graduating from high school in 1956, he studied at Hofstra University. In 1959, he married Ruth Alpern and 1960 and earned his BA in Political Science from Hofstra. Ruth, his wife got a job in the stock market.
With the help of Madoff’s father, a retired accountant, the company attracted investors and scored an amazing client list. "Madoff Investment Securities” grew famous for its reliable annual returns of ten p...

... middle of paper ...

...question is what is the government doing to prevent further fraud? Perhaps the law "Dodd Frank” went into effect profoundly changing financial reform and consumer protection in financial services. Besides, applying strong supervision and regulation of financial firms and financial reform required for the first time, that hedge fund adviser (and other asset funds) to register with the SEC and subject to the obligation to provide information about its operations and portfolios as it are necessary to assess the risk. The new law also creates the "Office of Financial Research" in the Treasury whose staff will be composed of experts with highly sophisticated knowledge that will support the Council's work by collecting financial data and conducting economic analysis. The question remains will this financial reform will to prosecute white collar criminals or prevent fraud.

Show More
Related

  • Ponzi Schemes: A Trail of Financial Destruction

    421 Words  | 1 Pages

    In September 2008, Federal agents swarmed the offices of Tom Petters uncovering a billion dollar Ponzi scheme. A similar case in dimension and scale of the well-known Bernie Madoff case is Tom Petters; the mastermind of a 3.7 billion, fourteen-year long deceit, the second largest Ponzi scheme in the United States. Similarly, Robert Allen Stanford, whose scheme emerged in February 2009 and is thought to have lasted ten years, involving the enormous sum of $8 billion, as well as S. Rothstein, who admitted to managing an approximate 1.2 billion dollars Ponzi scheme at the end of 2009. According to Maglich (2014) Ponzi schemes continue to thrive and leave a trail of financial destruction. “In the first six months of 2014, at least 37 Ponzi schemes were uncovered, with a total of more than $1 billion in potential losses” asserts Maglich (2014). Even though Ponzi schemes eventually collapse, Ponzi schemes remain

    Read More

  • Madoff's Case: The Madoff Ponzi Scheme In The World

    857 Words  | 2 Pages

    The case that was provided in the Stanwick textbook provided information on the Madoff Ponzi scheme which is said to be the largest of Ponzi schemes in the world. This case was a very interesting case. It showed how Bernard Madoffs massive falsehood created disaster for around 13,600 clients. The impact from Madoff did not end with his clients being impacted but also people far and in between. Madoffs Ponzi scheme was controlled through his company that consisted of his family being the head of the company, friends, and employees. This scheme was a result for the recession that hit in 2008. The two sons of Madoff that were top employees claimed to have no connections with the Ponzi scheme.

    Read More

  • the RICO act has more than on use

    1567 Words  | 4 Pages

    ...y were “earning” that they continued to invest. Most never tried to cash out their earned dividends and had the profits reinvested. There were a few people that did receive their profits and it became known in Madoff’s RICO case that they were all his friends. His friends were able to profit greatly from this scheme. One of his friends Jeffry Picower was able to make $5,771,339,795 from his investments in Madoff’s company. It was well documented in the RICO case that Picower told Madoff how much return on his investment he wanted and then he got that amount. In one particular instance he was able to have over nine hundred and fifty percent returns on his investment. This is an astronomical amount for a return on a stock investment. Picower was one of many believed to have known about the scheme, but most investors did not know they were being scammed.

    Read More

  • The Ponzi Scheme: Greatest Crimes?

    1653 Words  | 4 Pages

    In May 2002 the SIPC trustee filed a 255.3 million lawsuit against the Madoff family. Madoff company BLMIS ended on December 11 2008 when he was arrested for stealing his customer’s money. For more than 50 years Madoff s company money from people and on June 29th 2009 he pleaded guilty "to 11 counts Complaint and was sentenced as a hundred fifty years in prison"(Lewis, 2013

    Read More

  • The Bernie Madoff Ponzi Scheme

    2602 Words  | 6 Pages

    All in all, I believe and the evidence points to the Madoff scheme taking place because of an ethical dilemma. It’s important to stand strong in your values and do the right thing because not only does that benefit you, but also it benefits the organization you are a part of and with enough ethical people ponzi schemes like the Madoff case can be prevented.

    Read More

  • The Lehman Brothers Case

    744 Words  | 2 Pages

    In 1850, the Lehman bros. and Richard s. fuld jr. started their business of small buying and selling cotton shop. With the pace of time their business and their ambitions grew up, and opened the Futures trading venture in US. With efforts the firm moved to dealing of commodities with merchant banking. The success of bank was up to at mark.

    Read More

  • Charles H. Keating

    1584 Words  | 4 Pages

    Charles Keating exceeded Mr. Lindner’s expectations, which persuaded Mr. Lindner to extend an offer to the forty-eight year-old lawyer a position with American Financial in 1972 as the executive vice-president. Under Lindner’s supervision at American Financial in the mid-1970’s, Keating found a resourceful strategy to raise money from the public without the interference of the Wall Street underwriters. The success of this strategy resulted from sharp decline in profits that Lindner’s company was experiencing. Keating’s success revolved around him raising fifty million dollars for American Financial from the public without using an underwriting syndicate.

    Read More

  • Bernie Madoff Theory

    709 Words  | 2 Pages

    Ponzi schemes are a continuing problem in the investment world and can only be stopped if the Securities and Exchange Commission does better safe guarding investors’ money. This paper will address Bernie Madoff’s Ponzi scheme and how he was able to steal billions of dollars from investors. The reasons why the SEC responded so slowly to Bernie Madoff’s Ponzi scheme, and what can be done in the future to make sure another Ponzi scheme of this magnitude does not happen again. Also included in this paper will be examples of good and bad leadership theories.

    Read More

  • What Is JP Morgan Chase's Criminal Presecution?

    97 Words  | 1 Pages

    Jamie Dimon, CEO of JP Morgan Chase made a settlement deal in place of criminal presecution. It is alleged that the bank “looked the other way while working with Madoff as he ran his multibillion dollar scam” (DeCambre). New York Post reports that many efforts of the procecutors of New York expected for JP Morgan to admit to the Ponzi scheme that its financial institution was in on with Madoff. That unfortunately did not happen and instead the bank paid big time.

    Read More

  • Case Study Of Bernie Maddof Case

    1770 Words  | 4 Pages

    Since the investment markets trust these advisors, they tend to take advantage of them by running these fraudelent schemes. Bernie Maddof and Robert Anderson are culprit of these acts. The SEC has their investigative team but they are known not to follow up on theor findings. Back in the early when the team was first made aware of Bernie Maddod’s case, the Boston office of the SEC refused to take it any further. The SEC accepted that not escalating the Bernie Maddof case was a big blunder as described by their former Chairman Arthur Levitt. Mark Williams, “a finance professor at the Boston University School of Management” believes “the SEC must develop a stronger risk filter that will quickly flag investment advisers which exhibit higher risk characteristics” in handling these cases. With Mr. Williams approach, the SEC will need treat every indication of fraud with as high risk or as if I happened. Using the red flag system could have helped the SEC uncover Maddof when his dealings was tipped in 2000 through their whitsleblower system. An SEC historian, Joel Seligman also shared the same opinion as Chairman Levitt claiming "This is a debacle for the SEC”. During my study to write this report what I

    Read More

  • Bernard Madoff's Abuse Of Leadership

    171 Words  | 1 Pages

    To sum it all up, Bernard Madoff failed because he abused his leadership skills and he was oblivious to others well-being. His leadership style is also comparable to power abuse and corruption, which was stated in the PowerPoint lecture for week three. He used his leadership style as leverage to lure investors into investing into his pockets. He lacked empathy towards others because if he really cared about his investors he would have stopped his scheme a long time ago. Whenever people with high power abuse their power they often fail because of the corruption they cause. Some people cannot handle having power and having a great leadership style because they will feel the need to take advantage of others just as Bernard Madoff. Overall, Madoff

    Read More

  • Jordan Belfort: The Wolf of Wall Street

    1357 Words  | 3 Pages

    Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm (A&E Networks Television). Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.

    Read More

  • Bernie Madoff Essay

    1148 Words  | 3 Pages

    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

    Read More

  • Case Study Of Bernard Madoff Ponzi Scheme

    1374 Words  | 3 Pages

    Customers received annual financial statements with false information and the Securities and Exchange Commission (SEC) also received FOCUS reports with false information. While entering his guilty plea, Lipkin stated that for the past 35 years he had falsified financial records for Madoff's company. Lipkin stated further that he was not aware that Madoff was running a Ponzi scheme; to offer proof for that Lipkin said that he encouraged his wife, sons and grandchildren to invest with Madoff and they have lost most of their investment (Lewis, 2013). Madoff did this by giving his scheme the appearance that the fund was closed and only available to certain people. Lewis (2013) describes how a childhood friend fell for Madoff's trap and began investing with him.

    Read More

  • The Wolf of Wall Street

    1300 Words  | 3 Pages

    Jordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex, he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm. Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.

    Read More

More about The Controversial Case Of Bernard Madoff

Open Document