Topics: Ponzi scheme, Bernard Madoff, Confidence trick Pages: 2 (693 words) Published: February 27, 2013
1. What is the ethical issue involved in the Madoff case?

The Madoff case if filled with numerous ethical issues. The case is considered to be the largest scam in our nation’s history. The Madoff case is a great example of how someone who did not care about his profession, as well as the all the personal relationships he had cultivated over the years. Bernie Madoff was involved in a scheme called a Ponzi scheme. Madoff would take money from new investors to pay off the current investor’s dividends. Since Madoff promised unrealistic gains this was the only way to pay his investors. The Ponzi scheme was Names after Charles Ponzi who had tricked investors about a century before Madoff. To keep giving earlier investors their promised return, Madoff had to continually draw new people into the scheme. His family who claim they did not know about the scheme was also involved bringing in new clients to invest with Madoff. The SEC grew very suspicious after the market lows in 2008 and Madoff’s clients were still getting high return on investment. The SEC who had been investing Madoff exposed and charged Madoff of running a Ponzi scheme. Madoff like Ponzi had a personality that people trusted and handed over millions of dollars to invest. Madoff case was strange in nature since it went on for so long. This case really opened the eyes of many investors and made them take a more active role in their investments.

2. Do you believe that Bernie Madoff worked alone, or do you think he had help in creating and sustaining the Ponzi scheme? As intelligent as Bernie Madoff may have been he could not have pulled of the country’s largest Ponzi without some help. The return on investment that constantly beat market averages should have sent up red flags to people inside the company. People within the company such as internal auditors, accounts and other in the internal system should have been really suspicious of the finical reports. Were the people in the Madoff’s...
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