Business Ethics - Madoff

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BUSINESS ETHICS AND SOCIAL RESPONSIBILITY (B)
HOMEWORK (13 November 2012)
Student: Nguyen Thi Thuy An (Anne)
I. DISCUSSION QUESTIONS (page 3)
Question 1:
Madoff case involves some ethical issues and questions. Firstly, Madoff did not tell the investors clearly about the business (what is it as well as details about the contract of investment). As he was former chairman of the NASDAQ, everyone was more likely to trust him, which resulted in less concern of the contracts, the investments, or the business itself. Secondly, despite having received complaints about Madoff’s investment, SEC did not investigate or follow the case to stop the fraud as soon as possible. Thirdly, the government did not have appropriate laws for those kinds of investment and did not have enough concern about the businesses and investments in the country, especially when it became bigger day by day. The question here is that where was the government when the problem became worse and worse? Why didn’t they do anything to prevent or at least stop it? Question 2:

Many people have been harmed by the Madoff fraud. Investors lost a big amount of money, which affected their life and their family. Employees in Madoff’s and investors’ companies suddenly lost their jobs, their retirement funds and their health care benefits. Charity organizations lost their endowments and had to return the money invested by Madoff. Moreover, other businesses who want to attract investments had been harmed due to the big impact of the scandal (people afraid to invest in any business). On the other hand, the reputation of SEC and NASDAQ was also harmed because of Madoff. This fraud led to fluctuation of the economic in this country, which affected the life of many people doing business there. Question 3:

Scandal such as this is the result of both unethical individuals and organizational responsibilities. As mentioned above, in terms of unethical individuals, Madoff was unfaithful to the investor by inviting...
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