Case Study 2.3 Bernie Madoff and the Biggest Swindle in History Discussion Probes, p. 73
1. What unhealthy motivations drove Madoff to defraud investors and betray his friends? The motivation is selfishness. This is based on noted greed (extravagant lifestyle and the need to continuously take more money), narcissism (feeling of entitlement and ignoring welfare of others), and Machiavellianism (manipulation of others for self-gain, creating positive impressions while he gets what he wants). 2. Was Madoff’s scheme “extraordinarily evil” as the judge claimed? Yes, Madoff knowingly collected the life savings from people, including close friends, to support his own wants in life. When the charade was finished, many lost everything they had. 3. Was his punishment excessive? Will it deter other possible criminals? No, the punishment was not excessive. Madoff figuratively took the lives away from others. Therefore, him spending the rest of his life in prison is a fitting punishment. 4. Are the victims partially to blame for the success of this swindle? Yes, I believe the victims are partially to blame. The victims were guilty of greed, too. We are taught not to put all our money in one stock or mutual fund, but they did it anyway. 5. Do you think Madoff acted alone, or did he have help from employees and/or family members? I do not think that he acted alone which could be a possible reason for one of his son’s suicide. The family maintains their innocence, but I have serious doubts. It is an employee’s ethical duty to be informed of her surroundings and ask appropriate questions. 6. Should clients who got their money out before the fund collapsed be forced to return these funds to help reimburse less fortunate investors? No, I do not think they should be forced to do so, especially if there is no proof of them having prior knowledge of the situation. If these people knew about the situation and did get their money out before the collapse by having...
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