"Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."
On the Bernard L. Madoff Investment Securities LLC’s Web site, this sentence used to attract hundreds of thousands of investors came. Surprisingly, on December 11, 2008, federal authorities arrested Bernard Madoff, the largest Ponzi scheme in history by him was exposed and shocked the Wall Street as well as the world.
This Ponzi scheme by Bernard Madoff had cheated his clients out of 65 billions on paper (Stephanie Yang, 2014), and he had to face a maximum sentence of 150 years even though 20 years was more likely for him to be in the prison. (FRANK, R., EFRATI, A., LUCCHETTI, A., & BRAY, C., 2009) So what was really going on? How the former NASDAQ
…show more content…
Madoff created BMIS with an initial capital of $5,000 that he earned from working as a lifeguard during the summer, running it properly and made money as a middleman between buyers and seller of stocks. A big thing about his firm was “it was a major driver behind the growth of the Nasdaq, creating a system that courted brokers who had mostly traded stocks on the larger New York Stock Exchange to do more of their business with the Nasdaq.” (Stephen Gandel, 2008) After Mr. Madoff succeeded, in the 1990s (Bernard Madoff himself claimed), the fraud had begun. He first raised his money by exploiting club such as Palm Beach Country Club and attracted lots of wealthy Jewish club members to invest. Mr. Mandoff was secretive about his business and became famous in this field, more and more people tried to invest money to Mr. Mandoff because they heard about the “reputation” of him and believed he brought steady returns of their investment. But the truth was: the returns paid back to the investors were actually come from the money that invested by other people and made inside of the company’s condition worse and
Jordan Belfort is famous for his crooked way of earning his millions as a stockbroker on Wall Street. Even Belfort started at the bottom, on his first day in Wall Street he was told he was “lower than pond scum”(Belfort 1). After writing a book about his happenings on Wall Street, we’ve seen the
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.
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 invest billions of dollars into his hedge fund. And they did so because of the extremely high returns, which were promised by Madoff’s firm. If anyone would have looked deeply into the structure of his firm, it would have definitely shown that something is wrong. This is because nobody can make such big money in the market, especially if no one else could at the time. How could one person, Madoff, hold all of his clients’ assets, price them, and manage them? It is clearly a conflict of interest. His company was showing high profits year after year; despite most of the companies in the market having losses. In fact, Bernard Madoff’s case is absolutely stunning when you consider the range and number of investors who got caught up in it.
“Fifty percent profit in forty-five days!” was the claim of Charles Ponzi. Ponzi was a purported financial wizard. In the summer of 1920, he ran an “investment company” in Boston. He claimed to reap great profits by trading postal reply coupons. Nonetheless, the investment scheme was a fraud. Ponzi was using investors' money to pay off earlier investors, while keeping some for himself. In the end, he had collected $9,500,000 from 10,000 investors.
Bernie Madoff is one of the greatest conman in history. The Bernie Madoff scandal takes the gold as one of the top ponzi scheme in America. Madoff started the Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960. Starting off as a penny stock trader with five thousand dollars, earned from his workings as a lifeguard and sprinkler installer, his firm began to grow with the support of his father-in-law, Saul Alpern, who helped by referred a group of close friends and family. Originally, his firm made markets by the National Quotations Bureau’s Pink Sheets. However, in order to compete with the bigger firms that were trading on the New York Stock Exchange floor, his firm started to use very intelligent computer software that help distributed their quotes in second’s rater then minutes. This software later became the NASDAQ that we know today. In December of 2008 Bernard Madoff confessed that he had embezzling billions of dollars from investors. It is estimated to have lasted nearly two decades, and stolen approximately $64.8 billion. On December 11, 2008 he was arreste...
Kenneth Vogel’s Big Money explores the invasion of money into our political system. In the novel, Vogel explains one of the most important important events that is currently happening in today’s elections: donors. This, according to Vogel, has been brought on by a ruling in the case Citizens United vs. the Federal Election Commission. The result of this case destroyed finance restrictions, giving Corporations and Unions the same laws of freedom of speech as individual Americans. The novel opens in February of 2012 where Vogel sneaks into a donor banquet. As our current president, Barack Obama, gives his speech, Vogel makes a note of the President’s words. In particular, Vogel focuses on one line “You now have the potential
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.
The stock market is an enigma to the average individual, as they cannot fathom or predict what the stock market will do. Due to this lack of knowledge, investors typically rely on a knowledgeable individual who inspires the confidence that they can turn their investments into a profit. This trust allowed Jordan Belfort to convince individuals to buy inferior stocks with the belief that they were going to make a fortune, all while he became wealthy instead. Jordan Belfort, the self-titled “Wolf of Wall Street”, at the helm of Stratton Oakmont was investigated and subsequently indicted with twenty-two counts of securities fraud, stock manipulation, money laundering and obstruction of justice. He went to prison at the age of 36 for defrauding an estimated 100 million dollars from investors through his company (Belfort, 2009). Analyzing his history of offences, how individual and environmental factors influenced his decision-making, and why he desisted from crime following his prison sentence can be explained through rational choice theory.
Without Boeskey’s help, catching other insider-trading criminals would have been almost impossible. Ivan Boesky even wrote a book about his involvement in the world of insider trading; he called it Merger Mania. This case illustrates that there are real consequences to white collar crime. In addition to paying the fifty million dollar fine, he relinquished another fifty million dollars of his illegal trading profits. He still had millions remaining, however, from his illegal gains.
Writing Assignment #2 The scene that I chose in the movie, The Wolf of Wall Street, took place in a diner. The main character, Jordan Belfort, is recruiting some of his hometown friends to his investment firm that would soon be called Stratton Oakmont. Jordan is a talented businessman that decided to start his own investment operation at an early age. The buddies he recruited are named Sea Otter, Chester, Robbie, and Brad. The scene starts out with Jordan talking about selling stocks.
150 Ponzi schemes collapsed in 2009 alone, resulting in more than $16 billion in losses to tens of thousands of investors. These victims confront the challenge of calculating their losses for recovery claims as well as tax purposes. Ponzi scheme investigations currently account for approximately 21% of the Securities and Exchange Commission’s (SEC’s) enforcement workload — up from 17% in 2008 and 9% in 2005
This [financial fraud] epidemic is not something that is new to the financial world, it’s been around for quite some time and some scandals can actually be dated back to as early as 1792 (Beattie, n.d.). “Since then scandals have surfaced throughout American history, inciting outrage and often spurring reforms to ensure that similar events never recur” (Museum of…, 2010). The only difference is that in today’s financial world there are many more creative types of schemes, such as Ponzi schemes and misappropriation of funds, in financial markets creating financial burdens for the millions of investors and companies that rely on the returns of such investments. Today, “we are faced with an irrefutable challenge to find solutions to the growing threat” of financial scandals, which are also known as “white-collar crimes”...
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.
Diana B. Herniques, “Madoff is Sentenced to 150 years for Ponzi Scheme” June 29, 2009 New York Times, Http://nytimes.com2009/06/30/business/30madoff.html; accessed 9.6.11
While they are the criminals behind the fraud, sadly, most of them escaped their punishment and tarnished justice (Rakoff, n.d.). It was stated that the large investment banks (Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Bear Stearns), politicians (whom many of them were previously bankers), financial corporations (Citigroup, JP Morgan Chase), regulators, insurance companies (AIG, MBIA, AMBAC), credit ratings agencies (Moody’s, Standard&Poors, Fitch), and academics established a connection to one another in performing a fraud from wanting to gain profit. In the research summary by Peter Bradshaw (2011), he reviewed his point of view by comparing his views with the author. The movie started from the deregulation period in which the financial sectors gained more freedom in their chances to gain profit.