Bernie Madoff Essay

Bernard “Bernie” Madoff was a business man who misused and took advantage of the trust of his clients in order to be personally benefited with money that would satisfy his greed. Bernard Lawrence Madoff better known as “Bernie” was born in Queens, New York on April 29, 1938. He comes from Polish, Romanian and Austrian ancestry. He grew up shortly after the great depression, with his father being a plumber and his mother not working at the time they lived with financial problems. His parents Ralph and Sylvia, in attempts to better their financial situation became official broker-dealers and started a company from their home. Their company, Gibraltar Securities, was closed by the Securities and Exchange Commission and accused of using the business

His swim coach gave him a job working as a life guard at the Silver Point Beach Club, he also had a side job installing sprinkler systems. Working these two jobs, he would make money and save it for later. In 1956 Bernie attended his first year of college at the University of Alabama but then transferred to Hofstra University where he would stay and graduate from with a degree in political science. A year before he got his degree he married his girlfriend from high school Ruth Alpern. After receiving his degree, he used 5000 dollars that he had saved up working as a life guard and at his side job to start an investment firm which he called Bernard L. Madoff Investment Securities. He could not have started it had it not been for his parents in law who loaned him 50,000 dollars. His father in law who was a Certified Public Accountant also helped him by recommending him to people. Bernie eventually became a trustworthy person that many people went to to get a good and reliable return at the end of the year. It was because of this reliability that

What happens is people are told to invest large amounts of money and promised large amounts of return if they do end up going through with it. What really happens is that the originator of the scheme tells vast amounts of people of the “opportunity”, the early one’s who invest are given their money in return as well as extra money provided from some later investors who unknowingly join the scheme. After this, amazed by their return they recommend it to their friends and family who also invest and only add fuel to the Ponzi scheme. Unfortunately, only the beginning investors have a possibility of winning from the situation, the investors who came later lose all that they had, while the originator of the Ponzi scheme reaps all the reward. For some back story on the Ponzi scheme we must learn about the man whom it was named after, Charles Ponzi. Charles Ponzi noticed a flaw with postage stamps and international reply coupons. He could buy international reply coupons and return them in another country in exchange for postage and because of it being just after World War I, the exchange rate was beneficial towards Ponzi in that he would receive more money than he had paid for. He told his plan to many investors and promised them a large amount of return in a short amount of time, this is usually what is said during a Ponzi