Bernard Madoff Case

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Hello Student,
Before you start to do this paper, one of the first things you should note is that, it is always advisable to read and understand what is required of you; so that when conducting your research you will know what to look for. I have provided you with a list of references at the end of this solution for which you can read through them before your start your analysis. After reading through articles/journals etc. you should then next proceed to create an outline of your analysis. By forming an outline you will be better able to attack each issue in an orderly manner. I have provided a suggested outline for you below (followed by a more detailed approach): * Introduction (which may include a brief overview of the life of Bernard Madoff) * Bernard Madoff Investment Securities (BMIS) (here you can give an overview of the company and its principal business.) * Execution of the Fraud (this section may include a discussion of who were the parties that were involved in the fraud as perpetrators, accomplices, victims or otherwise; and also what were the motives of the perpetrators.) * Discovery of the Fraud (here you may highlight red flags and also you can mention in this section to what extent the Securities Exchange Commission was or was not involved in the discovery of this fraud case.) * Resolution of the Fraud (here you may also discuss how the case was resolved in court and you can also mention controls that could have deterred or prevented the fraud.) * Conclusion (here you can summarize what has been said throughout the paper.) * References (Note for guidance on preparing your list in the APA Format you may visit - http://www.library.ubc.ca/pubs/apastyle.pdf and http://psychology.about.com/od/apastyle/ig/APA-Format-Examples/ Introduction

Numerous corruption allegations and fraud cases could be characterized and marked for the 21st Century. According to Lamont (2011), “the decade’s early years had seen revelations of some of the biggest accounting frauds ever recorded in the form of Enron, WorldCom and Tyco.” In addition, there was another set of finance-related fraud cases which also swarmed the financial markets in the latter years and created a cloud of frenzy among investors and other stakeholders. Some of these cases were considered as minor fraud cases. However, the one case that won National attention was that of “Bernard Madoff Case.” According to Armstrong (2008), “for a number of years, Madoff managed to lure billions of dollars away from huge charities, as well as wealthy individuals in both the United States and Europe by getting them to invest in his hedge fund. This he did by offering extraordinary returns to investors, until his scheme eventually reached a staggering $50 billion under “management.” Benard L. Madoff was born on April 29, 1938, and he graduated from Far Rockaway High School in 1956. He attended Hofstra University Law School but did not manage to graduate. In the early 1960s, he formed Bernard L. Madoff Investment Securities (BMIS) with an initial capital of $5,000 earned from working as a lifeguard during the summer and installing refrigeration systems. Not paying attention to the small amount of start-up capital, he became ranked as “one of the top market makers in NASDAQ stocks.” Both his business and his character was lauded by all. Gregoriou & Lhabitant (2009), described Madoff as, “a man that had an impeccable reputation on Wall Street. Investing with him was an exclusive privilege. Bernard Madoff (hereafter: Madoff) was a legend.” However, according to this case analysis, Madoff was really nothing more than a “fraudster.” It was very evident that the plight began in recent years when he started to suffer reversals in his business. The Wall Street Journal professed that: “Rather than admit to his losses, he decided to pay out existing investors with money coming in from new ones. Things then got worse as redemptions increased and new...
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