Case Study: Frauds Of The Century

Frauds of the Century

In 2008 one of the longest running Ponzi Schemes came to an end. Bernard Madoff had successfully stolen money from thousands of people from all walks of life. In the last 100 years there have been multiple cases of people pulling forms of fraud on others with the goal of tricking them out money or other items claiming to invest the money or items with a promise of consistent monetary returns. Many questions come to mind when talking about this problem. Team 3 will conduct a case study analysis to get to the bottom of the problem with Ponzi and Pyramid and recommend solutions to help prevent these schemes from continuing to happen.

After the Madoff scheme came to light Ponzi schemes were brought

The victims have the biggest problem when the fraud comes to light as they entrusted the perpetrator to make good investments with the victim’s money and to be conservative againts risk of losing that investment. The victims trusted and believed in the traders not realizing the Ponzi scheme at all. They believed that trusting one of their own seemed like the perfect way to invest (511). Another problem from all perspectives is that no one is able to escape the eventual downfall of the Ponzi scheme and everyone loses in the end. The victims may start out making a return on their investment but when everything is all said and done they will probably lose everything they have worked for their entire lives as most invested more than they actual had to invest as the returns kept coming in. The victims ranged from low- to high-income families. No one was safe from the scheme and everyone

One solution would be to educate people about the need to be more aware of Ponzi and Pyramid schemes. With the Madoff scandal of 2008 more people are aware of such scams and schemes but to really have education available to people to know the signs to look for is a huge benefit. As these schemes affect society as a whole, and affect the companies that are actually trying to help individuals who are striving to improve their lives; there has to be transparency, internal controls, and compliance standards within every organization (509). Another alternative is to make sure those in the roles of investigating and the first to learn about such crimes take the tips more seriously. To look beyond the fact that they may know the person or have heard good things about them. The SEC for instance have to become unbiased to reports of red flags or odd behavior. At this point all tips have to be taken seriously when they are first made. Lastly, a great solution would be to teach about ethics and try to find a way to be able to help cultivate people’s values and morals so this doesn’t happen more or even again. With all of these solution one thing stands out that none of them will work unless those involved in changing the problem have higher morals than those who perpetuate the scheme. The ethics that should help to motivate a change and solution to be