Whistleblowing: The Maddoff Affair
The Madoff Affair
Assignment #2- Ethics Assignment
Principles of Management MGMT-301-100
Mrs. Bryn Brown, PHR
Tarleton University
By Megan Pulido
September 10, 2013
The Bernie Madoff scheme was one of the largest Ponzi schemes to date, and a classic record of whistleblowing in business. The Madoff scheme represents a case of unethical behavior in business dealings within a company constituting an ethical stand against unlawful behavior, by way of whistle blowing. The summary below describes the events that occurred and the effects of whistle blowing within society.
In 1960, Bernie Madoff founded the Bernard L. Madoff Investment Securities L.L.C., a small trading firm. Over the years he attracted investors by promising returns between 17-20%, and was said to prefer being a silent partner working through Michael Viennes, and quietly taking many more clients on as feeders without anyone knowing. (Gaviria & Smith, The Madoff Affair). As time went on and new marketing tactics were put in place, everyone who wanted to live the extravagant life joined his client list and investing money into his market fund. As Bernie began to take on more than the legal limit of clients, he was able to discreetly do this by employing licensed CPAs who did not disclose his name in any records to ensure his name was clean so that he would not be caught as being an unregistered investment advisor (Gaviria & Smith, The Madoff Affair).
Madoff’s unethical behavior occurred when he started taking money from one investor and using it to pay for another. A group of people were investing their money into another group as a way to increase their profits, very few people or clients were aware of what was going on, and all the others trusted that their money was being used as it was intended. The ultimate factor that caused Madoff’s Ponzi scheme to
Assignment #2- Ethics Assignment
Principles of Management MGMT-301-100
Mrs. Bryn Brown, PHR
Tarleton University
By Megan Pulido
September 10, 2013
The Bernie Madoff scheme was one of the largest Ponzi schemes to date, and a classic record of whistleblowing in business. The Madoff scheme represents a case of unethical behavior in business dealings within a company constituting an ethical stand against unlawful behavior, by way of whistle blowing. The summary below describes the events that occurred and the effects of whistle blowing within society.
In 1960, Bernie Madoff founded the Bernard L. Madoff Investment Securities L.L.C., a small trading firm. Over the years he attracted investors by promising returns between 17-20%, and was said to prefer being a silent partner working through Michael Viennes, and quietly taking many more clients on as feeders without anyone knowing. (Gaviria & Smith, The Madoff Affair). As time went on and new marketing tactics were put in place, everyone who wanted to live the extravagant life joined his client list and investing money into his market fund. As Bernie began to take on more than the legal limit of clients, he was able to discreetly do this by employing licensed CPAs who did not disclose his name in any records to ensure his name was clean so that he would not be caught as being an unregistered investment advisor (Gaviria & Smith, The Madoff Affair).
Madoff’s unethical behavior occurred when he started taking money from one investor and using it to pay for another. A group of people were investing their money into another group as a way to increase their profits, very few people or clients were aware of what was going on, and all the others trusted that their money was being used as it was intended. The ultimate factor that caused Madoff’s Ponzi scheme to
References: “Transcript: The Madoff Affair.” PBS.org. Ed. Johnathan Montminy. Frontline, 12 May 2009. Web. 10 Sept. 2013. http://www.pbs.org/wgbh/pages/frontline/madoff/etc/script.html. Gaviria, M., & Smith, M. (Producer). (2009, May 12). The Madoff Affair [Web Video]. Retrieved from http://www.pbs.org/wgbh/pages/frontline/madoff/