Bernard Bernie Madoff

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Bernard “Bernie” Madoff (NASDAQ)
Angela Collier
LEG 100
George Asinc
June 7, 2012

Introduction

Bernard Lawrence Madoff was born April 29, 1938 in New York City to the parents of Ralph and Sylvia Madoff. His father was a child of a Polish immigrant, and worked as a plumber for years. Madoff mother was a daughter of a Romanian and Austrian immigrant, she was a housewife. Madoff parents married in 1932 when the great depression was at its height. After struggling financially for years, they got involved in finance in the 1950s.
Bernard Madoff parents was not successful with the trade, his mother was registered as a broker-dealer in the 1960s making their home the office of their company called Gibraltar Securities. They were shut down by the SEC for not reporting their financial conditions. Bernard Madoff was educated by attending Far Rockaway High School, University of Alabama, Hofstra University where he earned a bachelor’s degree in political science, Brooklyn Law School. Bernard married his high school sweetheart Ruth Alpern, who attended Queens College and studied finance. While Bernie was working as a lifeguard and installing sprinkler systems he saved and used 5,000 dollars for him and his wife to start Bernard L Madoff Investment Securities, LLC. www.biography.com/people/bernard-madoff-466366

Bernard Madoff had got helped from his father-in-law, a C.P.A. retiree, with his company. Bernie business had attracted investors through word-of-mouth and he had an impressive client list that included the rich, not so rich and the famous. With an annual return of 10 percent or

more it grew Bernie’s company fame and reliability, and by the 1980s he handled up to five percent of the trading on the New York Stock Exchange. www.biography.com/people/bernard-madoff-466366

Bernard Madoff had several family members work for him, his brother Peter the Chief Compliance Officer, sons Andrew and Mark was traders, Peter’s daughter, Shana, a Rules Compliance Lawyer for the trading division, and his son Roger. In December of 2008, Madoff admitted to his sons that part of his company was an elaborate Ponzi scheme. His sons reported him to the federal authorities. Madoff was arrested and charged with securities fraud. Madoff admitted to investigators that he lost 50 billion of his investors’ money; he pleaded guilty to 11 felony counts, 3 counts of money laundering and so many more counts. Bernie was imprisons until a sentencing hearing schedule early June 2009. Madoff was sentence to 150 years in prison on June 29, 2009, the max a person his age can get. www.huffingtonpost.com/2008/12/15/bernie-madoff-ponzi-scheme_n_151018htmlt.

Describe three types of illegal business alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business.

The three types of illegal business were deceptive practices, theft, and fraud. In fraud Madoff was accuse of securities fraud, investment advisor fraud, mail fraud, wire fraud. In theft he was accuse of channeling money from new investors to old investors, and taking from an employee benefit plan. In deceptive practices he was accuse of managing the money of several

investors who did not know he was doing this. The Securities Exchange Act (1934) stipulated audits of publicly traded companies, including procedures “designed to provide reasonable assurance of detecting illegal acts that would have a direct and material effect on determination of financial statement accounts.” The Federal Trade Commission Act (1914) says it is prohibit unfair practice and deceptive act in or affecting commerce. Persons who violate the antifraud provisions of the federal securities law are subject to private suits for damages, civil enforcement actions by the SEC, and criminal prosecution. Monopolizing trade- this is unlawful according to Sherman Antitrust Act (1890). “Mail...
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