How Fraud in the Financial Markets Influence Government Action

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Millions of people in today’s society entrust their money to various financial markets in an attempt to seek high returns or gains for taking certain risks or even simply creating nest eggs so they can take advantage when their [retirement] day comes. Whether you are investing for short term gains or planning for retirement, a risk is certainly what is being taken when investing your hard earned money. Investors should certainly make informed decisions regarding investment opportunities and heavily scrutinize all potential investments. Unfortunately, as we have seen in recent history with Enron and Bernie Madoff, there are companies and/or individuals that are among us trying to take advantage of what they feel is an opportunity to make easy money. Essentially, these companies and/or individuals are committing some type of financial fraud to cover up their “robbing Peter to pay Paul” type schemes (Museum of…, 2010). 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”... ... middle of paper ... .../ Securities and Exchange Commission. Retrieved March 1, 2011 from Silverstone, H., Sheetz, M. (2007). Forensic Accounting and Fraud Investigation For Non- Experts (Second Edition). Hoboken, NJ; John Wiley & Sons, Inc. Retrieved March 3, 2011 from The Madoff Scandal. (2009). The Largest Fraud That The World Has Ever Seen. Retrieved March 2, 2011 from Wolfe, M. (2010). Types of Financial Statement Fraud. Retrieved March 3, 2011 from

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