Bernie Madoff, former chairman of the NASDAQ Stock Exchange ran one of the biggest Ponzi schemes in U.S. history (Stanwick & Stanwick, 2015). Madoff took money from many people and organizations who invested in his fake company promising them above average returns for their investment. Using a small staff along with a couple of family members Bernie Madoff was able to scheme millions of dollars from over 13,000 people all over the world only to benefit from the scheme leaving others penniless and broke and some organizations had to eventually close their doors because the scheme took every dime they had (Stanwick & Stanwick, 2015). Because of his close knit ties to the financial industry Bernie Madoff was able to gain investment from some of the wealthiest people and organizations in the world. One of the major issues that I saw in this case was the lack of investigation the SEC did after they charged Madoff with trading violation when he did not disclose his order to other firms (Stanwick & Stanwick, 2015). The SEC was told about the potential Ponzi scheme, but failed to properly verify the trades that Madoff claimed (Stanwick & Stanwick, 2015). Another issue I see with this case was the fact that Madoff used family and close friends as employees instead of getting skillful employees to handle the positions. By using family Madoff was able to manipulate things so they would be only ones to benefit from the fraudulent investments and Madoff knew they would not verify anything that Madoff did.
Questions for Thought
1. In this case Bernie Madoff used his image and status to gain potential clients that would invest in his scheme. He knew that with his ties to the financial industry and it did not hurt that he was a financial wizard, and being the former chairmen of the NASDAQ stock exchange people trusted him with their money and did not mind turning over their money to him easily. Because the elite group of wealthy people turned over their...
References: Lauren, A., Campbell, S., Tukeli, K., Yaccato, B., Greenman, A., & Tukeli, K. (2014). 10 Of The Biggest Ponzi Schemes In History. TheRichest. Retrieved 16 March 2015, from http://www.therichest.com/rich-list/nation/10-of-the-biggest-ponzi-schemes-in-history/2/
Stanwick, P., & Stanwick, S. (2015). Understanding business ethics (2nd ed.). Thousand Oaks, CA: Sage Publications
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