Madoff Securities
Assignment 1: Madoff Securities
Abstract
In the case of Bernie Madoff this is perfect example of how unethical behavior can turn into corruption. Madoff, a former investment and stock broker, was formally introduced to the world as the 'sole' operator in the largest Ponzi scheme on record. Madoff turned his financial management company into a colossal Ponzi scheme that swindled billions, from thousands of his investors. In this paper we determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme, we’ll look at investing in Madoff Securities and how to expose the potential fraud.
Determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme. The regulatory oversight that was very concept of a Ponzi scheme uses new investor money to pay old investors. Here is how it can work according to text old investor is reminded that his investment is earning 12%, but wouldn't it be better to leave it there to earn even more. The wealthy investor doesn't need a monthly check so he may take the advice to 'let it ride'. But if he hears rumors about Bernard Madoff Investment Securities, he (meaning rich investor) may decide to take all of his money out. If Bernard Madoff Investment Securities (BMIS) cannot talk rich old investor out of it, Bernard Madoff Investment Securities will use new investor funds to pay off the old investor. That is the concept of a pyramid. The old investor gets his high rate of return when he cashes out, and he is happy, but somewhat quiet about deserting the ship. Even if the old investor suspects a Ponzi scheme, he will say nothing. A high return on funds invested, and particularly higher than other places in the financial markets incites greed in people. (http://mises.org/daily/3260)
Abstract
In the case of Bernie Madoff this is perfect example of how unethical behavior can turn into corruption. Madoff, a former investment and stock broker, was formally introduced to the world as the 'sole' operator in the largest Ponzi scheme on record. Madoff turned his financial management company into a colossal Ponzi scheme that swindled billions, from thousands of his investors. In this paper we determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme, we’ll look at investing in Madoff Securities and how to expose the potential fraud.
Determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme. The regulatory oversight that was very concept of a Ponzi scheme uses new investor money to pay old investors. Here is how it can work according to text old investor is reminded that his investment is earning 12%, but wouldn't it be better to leave it there to earn even more. The wealthy investor doesn't need a monthly check so he may take the advice to 'let it ride'. But if he hears rumors about Bernard Madoff Investment Securities, he (meaning rich investor) may decide to take all of his money out. If Bernard Madoff Investment Securities (BMIS) cannot talk rich old investor out of it, Bernard Madoff Investment Securities will use new investor funds to pay off the old investor. That is the concept of a pyramid. The old investor gets his high rate of return when he cashes out, and he is happy, but somewhat quiet about deserting the ship. Even if the old investor suspects a Ponzi scheme, he will say nothing. A high return on funds invested, and particularly higher than other places in the financial markets incites greed in people. (http://mises.org/daily/3260)