Breaking The Rules Of Social Responsibility

1125 Words5 Pages
Breaking the Rules of Social Responsibility When an investment firm is formed they should create a strong mission statement and vision. They should use phrases like create strong relationships and commitment to clients. Within their mission statement and vision they incorporate the company’s social responsibility, ethics, and values in which they will conduct their business. When an investment firm not only puts on paper, but actually implements social responsibility to its clients, they can work together in a trusting relationship. If investment firms fail to act socially responsible they mislead their client, while taking them down a road of unsuccessful investments. On December 11, 2008 Bernard Madoff was arrested for stock fraud. He confessed to cheating investors out of billions of dollars for nearly two decades while committing the largest Ponzi scheme in history. The aim of this paper is to demonstrate what happens when the rules of social responsibility are not followed in an investment firm and the red flags that were disregarded. The Facts Madoff Investment Securities was a successful market maker firm that matched buyers of stock with sellers on Wall Street. Moreover, they advertised their firm as having highly ethical standards. He was well respected on Wall Street even serving as chairman of NASDAQ. Unbeknownst to Wall Street and the Securities and Exchange Commission was the aspect that Madoff had a side business as an investment advisor (Martin, 2009). This side business, that was ultimately a Ponzi scheme, ran under the radar for two decades. The SEC website (2014) posts the description of a Ponzi scheme as an investment fraud that involves the payment of alleged returns to existing investors from funds cont... ... middle of paper ... ...ted upon, such as his name not being listed on a financial prospectus as a financial advisor. He additionally told people that he didn’t want his secret investment theories to get into the hands of competitors. In the end, Frank Casey persisted with his complaints to the SEC and with the 2007 housing market crash, Madoff could no longer sustain his scheme because people needed their money (Martin, 2009). Conclusion When working in an investments firm it is imperative that all those involved have a strong sense of social responsibility, ethics and values. Madoff, although the core of the Ponzi scheme, had many other associates who failed with their responsibilities to their clients and society as a whole by falsifying their returns, promissory notes, and blatantly ignoring the red flags that were before them all in the name of the old mighty dollar.
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