Madoff Case

Topics: Ponzi scheme, Investment, Bernard Madoff Pages: 4 (1123 words) Published: March 25, 2011
The Case of Bernard Madoff

Bernard Madoff is a very successful investor and investment adviser in his early career. He is former stock broker, investment advisor, non-executive chairman of the NASDAQ stock market, Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008. The firm was one of the top market maker businesses on Wall Street, which bypassed "specialist" firms by directly executing orders over the counter from retail brokers. He use Ponzi scheme to defraud his clients: With the promise of large returns as bait, the fraudster takes in money from new investors and uses it to pay off the earlier investors until no more new recruits can be found and the whole scheme collapses, with the newest investors losing everything which include nonprofit organization and education institution. Bernard Madoff have a legal firm to attract investors with high return rate and also elude the investigation from SEC, he injects money to the legal firm from illegal one when the loss happened. His family does a lot for this fraud, Bernard’s son and his brother involve in his business, his wife do the social networking to attract celebrities to open account in his firm. Everything goes smoothly until 2008, when economic recession happened, everything goes down, and then Bernard Madoff go to jail.

SWOT Analysis
1. Madoff receives higher education that he can handle most sophisticated financial instrument. 2. Madoff’s reputation and public influence is the high investment return guarantee for investors 3. Inventors lack relevant professional knowledge and they over trust Madoff, according to case, many investors do not care if Madoff can provide annual account statement 4. Madoff’s family do the team work that is hard to find criminal clue and also can allocate external risks


1. With little or no legitimate earnings, the...
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