Honesty is one of the basic principles for ethical business conduct. Gaining the trust of customers and investors is paramount in ensuring continued long term success and profits. For over ten years, Bernard Madoff created and grew one of the world’s largest Ponzi schemes known to date. He gained the trust of wealthy friends and prominent charity organizations, served on the chair of NASDAQ, and lived a lavish lifestyle all while keeping a dark secret from those who were the closest to him. Madoff’s deceit was worldwide. Being a man of power, Madoff lured in Ponzi scheme investors all over the globe with the guise and promise of being part of an exclusive club. Regulators are now increasing testing of and instructions to financial intuitions in an effort to protect consumers from another billion dollar scheme. Issues Raised
As our test book states, “When an individual engages in deceptive practices to advance his or her own interests over those of his or her organization or some other group, he is committing fraud… Fraud is any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression.” (Ferrell pg. 78) There is no doubt that Madoff actively breached the trust of the companies involved in the Ponzi scheme. After his family gained awareness of his actions, Madoff admitted to his dealings and was tried and sentenced to 150 years in jail. One of the questions raised by his scheme, is did he work alone? There is proof that an accountant friend assisted, but who else looked the other way while he was pulling the wool over the eyes of millions? Who knew something was wrong, but still participated thinking they too could gain from being at the top of the scheme? This is the promise of such schemes; those at the top get all the benefits. The estimate of losses totals over $50 billion. In order to manage that large of a sum, there would need to be a lot of paperwork somewhere, let alone, accountants and...
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