The Case of the Century: Bernard Madoff

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1. What are the ethical issues involved in the Madoff case? Bernie Madoff was a thief, plain and simple. He was a greedy, selfish, self-indulgent con artist, no different from any other grifter that you meet, except because of who he was, he was able to pull the con off on a grander scale. Madoff used his name and position and the legitimacy of his first business to draw people into his Ponzi scheme (like a pyramid scheme where one takes money from newer clients to pay older clients). He misrepresented (the kinder word) or lied (if you want the truthful description) to his friends and clients from the beginning and as later documented in his allocution, he never invested any of the money he got. It would have been different if this scheme formed from some bad business decisions and he did this in response to that and was trying to save some of his client’s money, but it wasn’t. Madoff originally provided his clients the 10-12% returns on investment that he offered, but it appears that with the increase in funds, the persons that benefitted the most from the Ponzi scheme was Madoff and his family. They all shared in an expensive and lavish lifestyle bordering on the garish with its excesses. He appeared to hire incompetent people so no one would be the wiser to what he was doing which was a disservice to his clientele. He also appeared to have used some of his misbegotten gains and infused them into his legitimate business therefore, putting it at risk. Nepotism was rampant in Madoff’s business which is why many people believe his family had to be involved more than just the sons and the confession of the scheme.

2. Do you believe that Bernard Madoff worked alone, or do you think he had help in creating and sustaining his Ponzi scheme? Would this represent a conflict of interest? I don’t believe it was possible for Madoff to create and sustain his Ponzi scheme on his own. By all accounts, this scheme has been going on since sometime in the 1990’s...
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