Bernie Madoff Essay

Topics: Bernard Madoff, U.S. Securities and Exchange Commission, Ponzi scheme Pages: 3 (350 words) Published: July 9, 2012
Joe Lorkovic
Bus 100

The Great Ponzi, Bernie Madoff.

Bernie Madoff is known as The Great Ponzi. Bernie Madoff is a former American businessman,

stockbroker, investment advisor, and financier. On December 11, 2008 he was arrested and charged

with securities fraud. One of the reasons why Madoff's scheme did so well is the fact you had to be

invited to invest with him. It gave it that exclusivity that makes people want to get in on it. Basically he

was paying new clients with money from old clients, the key is to always have new clients. Instead of

investing the money he recived from investors, he just deposited the money into his own bank account

and released completely made up investment reports. According to Markopolos, he knew within

minutes that Madoff's numbers did not add up, and it took four hours of failed attempts to replicate

them to conclude Madoff was a fraud. He was ignored by the Boston SEC in 2000 and 2001, and by

Meaghan Cheung at the New York SEC in 2005 and 2007 when he presented even more evidence.

These types of schemes always show up when the economy turns.

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The Great Ponzi, Bernie Madoff. (Continued)

Concerns about Madoff's business surfaced as early as 1999, when financial analyst Harry Markopolos

informed the U.S. Securities and Exchange Commission (SEC) that he believed it was legally and

mathematically impossible to achieve the gains Madoff claimed to deliver. Yet he wasn't arrested till

December 2008. Harry repeatedly called Madoff out to the SEC, he pointed out 12 or more different

red flags concerning Madoff's investments. In 2005 Bernie was investigated for front running but the

charges were dismissed in 2006. It was the market collapse of 2008 that brought Madoff down.

On March 12, 2009, Madoff pled guilty to 11 federal felonies, including securities fraud, wire fraud,

mail fraud,...
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