Bernie Madoff, villain or simply a business man who made unethical business decisions. This is a question that many people have asked since he was caught and sentenced for perpetuating a global Ponzi scheme. What we do know is that Madoff’s unethical actions led to the cash losses of at least $20 billion for his clients. This caused the financial devastation of pension funds, hospitals, and universities across the globe. His actions had a devastating affect not just on the social elite but nonprofit organizations and working class people looking to retire to name a few. He wasn’t thinking about the well-being of others while making the decision to carry on taking people’s money even though he knew he couldn’t produce the returns he promised …show more content…
Madoff didn’t show remorse for his decision when finally sentenced and confessed with pride to his crime. He held positions of power and was respected in investment circles. He was elected to NASD advisory council which he served on the council for four years and he also sat on numerous NASD committees and task forces, chairing several. We as a society expect people in these positions to act responsible and ethically when making decisions that will affect many people. We as a society hold people in higher positions to higher standards. Their reputation is supposed to reflect the way they do business. If they are highly respected than we expect them to be respectable in their business dealing. Madoff was greatly respected on Wall Street but he used his reputation as a way to shield himself from scrutiny. His firm advertised high ethical standards even though He knew that no one would expect him of illegal activity because his business reputation was impeccable. This just allowed him to lure in more investors and gave him an inflated sense of being invincible. He allowed his greed to override any sense of common decency and make the decision to keep this rouse going for so …show more content…
Whether this was deliberate or willful blindness Avellino and Bienes were not innocent in their actions. They allowed money to cloud their judgement and didn’t ask important questions. They knew they were misleading investors but as long as they got a fat pay check didn’t care about the people they were lying to. Bienes knew that he should have been licensed and that investment advisors need to register with the SEC. But, he admitted to asking Madoff about it and being told not to register or get licensed. So, shouldn’t this have raised a red flag that something wasn’t right? If everything was legal why wouldn’t you want to register or get yourself licensed? These are just a few questions I think anyone would ask but Bienes and Avellino chose to leave them unasked in order to keep making easy money. Bienes admitted to paying millions on a house and famous paintings and doing very little for the money he was making. All he had to do was dupe people out of their money and he would continue to live a life of luxury. Later when Avellino and Bienes had to shut down their small investment firm, this didn’t even show up as a blip for Madoff to stop his shady business
I’m doing my Case presentation on the Madoff Scandal because I find it very interesting and have heard about it before and wanted to know more details about the story. Like who were the major players and how much money did he really steal from people?
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
After 8 years the SEC finally found the scheme controlled by Madoff. In December 2008 Madoff was found guilty; however, stayed under house arrest by the until his trial in March of 2009. He was not arrested because of the 10-million-dollar payment which allowed him to stay under home surveillance until the trial. While at home, he and his wife, mailed valuables such as jewels and jewelry to family members. In March of 2009, Bernard Madoff was finally found guilty and was sentenced to 150 years in prison. On the day of his arrest, the FBI found 100 checks that totaled $173 million dollars that were made to friends, family, and
In 2008 the worst financial crisis since the great depression hit and left many people wondering who should be responsible. Many Americans supported the prosecution of Wall Street. To this day there have still not been any arrests of any executive on Wall Street for the financial collapse. Many analysts point out that greed of executives was one of the many factors in the crisis. I will talk about subprime loans, ill-intent, punishments, and white collar crime.
...the man for whom the scheme is named. It was also the largest investment fraud by a single person. The most important effect of the Madoff scandal is the reformation that occurred in the SEC afterward amid shock at their inability to catch Madoff in the act during their investigation. The enforcement division was revamped to focus on more concerning markets and was more heavily staffed with market experts. The Office of Market Intelligence was created with the responsibility of managing tips. The SEC began to employ more undercover agents and advocate for a protection program for whistleblowers. Back-office personnel oversight was enacted. Additional funding was approved for the SEC. Surprise examinations were approved to ensure the existence of reported assets. In general, the regulating power of the SEC was vastly expanded to prevent similar crimes from occurring.
There were several attributes identified that made someone a white collar criminal, including financial motivation and exploitation of position. Stanford was financially motivated in that his initial success led him to discover ways of how to duplicate income. He became very greedy with his success and was motivated to defraud investors for his own monetary benefit. Furthermore Stanford exploited his position, substantially. The best example of this is in Antigua, where the aforementioned Stanford International Bank is located. A lot of people in Antigua trusted Stanford and were recommended to him for his services. He was very powerful and was able to use that power to convince prospective investors that he can invest their money, promising them high rates of return. Brian K. Payne’s White-Collar Crime defines white collar crime as: “…any violations of criminal, civil, or regulatory law-or deviant, harmful or unethical actions-committed during the course of employment in various occupational systems (Payne, 404). Allen Stanford’s crimes were by all means deviant, harmful, and unethical and ultimately classifies him as the perfect example of a white collar criminal in today’s
Jordan Belfort: described as charismatic, confident, convincing. Jordan Belfort: described as crooked, corrupt, conniving; a multi-personalitied man who became rich off lying. Today I will inform you how one man could be described by such opposing characteristics, and how one man could singlehandedly manipulate the stock market.
The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.
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.
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...
The nature and damage of white-collar crime can result in a variety of punishments for the offender. Some sanctions being time in prison, some being fines, and others being a combination of both. For example, Chalana McFarland who was a real estate attorney and was accused of fraud, money laundering and other crimes costing investors $20 million. She was charged with $12 million in restitution and thirty years in prison (Haury, 2012). Another example would be Bernie Madoff, who owned Madoff Securities, was involved in a Ponzi scheme. It is believed that investors lost $50 billion dollars. Curently Madoff is serving a 150-year sentence in a prison in Butner, N.C (Haury, 2012). As these white-collar crime cases show, the costs of these crimes can be quite serve and earn life sentences as well as very hefty fines. Moreover, white-collar crimes have huge economic effects on victims, often causing life altering losses. Under consideration white-collar crimes are quite high-cost actions that hold large possible punishments and large ethical issues. In a research experiment done by Christian Seipel and Stefanie Eifler, a theory branching from rational choice theory was tested in relation to crime. The theory they explored was referred to as high- and low- cost theory. This theory discusses the factors that influence low cost crime and high cost crime. Low cost being defined as crimes that have low
...y analysis of ethical behavior that surrounded the financial events of Bernie Madoff, and the events that surrounded Enron.
This case illustrated that there were 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.) His actual prison sentence was three years, yet he served only twenty-two months in the federal prison at Lompoc, California, which was known to have a “country-club” atmosphere.
One may ask, how is that different from the “Enron” scandal? There isn’t much to separate these two, it could be said that they are cousins. They both managed to cover their debts by overstating their revenue and profits and using other companies they owned to make profit or at least attempted to, but ultimately drowning in debt and committing fraud. What makes these two companies different would be the cooperation of the executives with the prosecutors or officials, which goes back to why Andrew Fastow only faced 10 years because he took a plea deal. On the other hand I believe 25 years for conspiracy, misrepresentation of statements and 7 counts filing false statements was well deserved because not only did that make a statement to the public, but in the eyes of the law Ebbers should have learnt from “Enron’s”
Egoism focuses on what is best for one’s self. The top executives may have followed this ethics system because they made millions of dollars off of the Enron scandal even though they knew what they were doing was wrong. Since they were doing what was best for them, they must have been acting ethically. It could also be argued that utilitarianism was at work in regards to the Enron scandal. Utilitarianism holds that an action is ethical if it does the greatest amount of good for the greatest number of people. The end justifies the means. By manipulating their statements, Enron was helping all of their employees and shareholders to keep their jobs and money. This justified and made their choice to lie on their statements the ethical decision to