Preview

The Bernie Madoff Ponzi Scheme

Good Essays
Open Document
Open Document
346 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Bernie Madoff Ponzi Scheme
The Bernie Madoff Ponzi scheme was life altering for numerous individuals who trusted in Madoff with their life savings and hard-earned wealth. Although the original scandal made headline news over eight years ago lawsuits and other remnants still remain. In 2013, one of largest organizations that people believe contributed the J.P. Morgan (JPM) agreed to settlement with a onetime payment of $billion dollars (J.P. Morgan Chase Will Have To Pay A Fine, 2013). Although many believe that JPM was the blame for not breaking the news of the Ponzi scheme sooner due to obvious red flags related the Madoff laundering money in and out of accounts held at the bank, JPM has still taking the stance that they were not to blame. Furthermore, in 2015, another

You May Also Find These Documents Helpful

  • Good Essays

    The Bernard Madoff “Ponzi Scheme” scandal was the biggest and lasted the longest financial fraud in the history of the US. Bernard Madoff was a financial adviser, and also the former chairman of the NADAQ. He established his investment firm named “Bernard L. Madoff Investment Securities LLC” in 1960. The Madoff Fraud is a typical “Ponzi Scheme”, in order to attract investors to give money to him, he convinced people to hand over their life saving, and promised them high returns rate, and then he used these money to make payments to those earlier investors. He took the investors for a $65 billion over the course of nearly two decades. In the end, Bernard was sentenced to maximum 150 years prison life and a forfeiture of $170 billion.…

    • 324 Words
    • 2 Pages
    Good Essays
  • Good Essays

    In the case of Bernard Madoff, an overview was provided that describes the fraud of the century. As a result of the Ponzi scheme, social attitudes toward the investment industry were lukewarm. I will describe the highlights of the case.…

    • 396 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Peter Madoff pleaded guilty to his involvement in the Ponzi scheme run by his brother. Peter Madoff served as the chief compliance officer.…

    • 1261 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    In addition to The Economic Entity Assumption was a principle that continued to be violated throughout Madoffs operations. Transactions have to be recorded correctly while booking, including keeping certain transactions separated if its not related to the business. You should never mix your personal transaction with your business transactions. However, Madoff was no stranger to breaking this accounting principle. He over the years he made several transactions that would be considered unethical, because funds for business was used for personal use. accounting rule. In the article "Too Good to Be True" "Madoff began regularly wiring money to the London office to pay for personal luxuries. He purchased the $7 million Leopard Yacht in the…

    • 187 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    One hundred and fifty years in prison. Shame brought to his family for bankrupting so many friends. Suicide by his son. These are the costs Bernie Madoff incurred for running a decades-long Ponzi scheme that appropriated an estimated $18 billion from investors. If Madoff was just maximizing his income, then why did so many cheer when he did the "perp…

    • 61 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    3 Madoff

    • 458 Words
    • 2 Pages

    Madoff and his investment firm was charged with securities fraud, for a multi-billion dollar Ponzi scheme. The scheme wasn't revealed until Madoff himself confessed his crimes.…

    • 458 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    It wasn’t done alone. Madoff had help from colleagues and it is even suspected that some of his family members were involved due to the fact that he brought in a lot of family members to the job over the years including his sons. His sons were actually the ones who reported him to federal authorities. Some people who were involved were Frank Avellino, Frank DiPascali, and Jeffery Picower. In order for the prosecutors to bring Madoff to court, they had to go through a series of junior employees and squeeze as much information from them to have enough supporting details and evidence to move up on the table. “Madoff had dealings with a variety of banks and hedge funds, and burned Madoff investors have tried to recoup funds from some of them. Madoff held an account at JPMorgan Chase that he used to shuffle money between offices in London and New York. In 2011, two Madoff investors sued the bank for $19 million, claiming they aided in his fraud, according to CNN. At the time, a JPMorgan spokesman dismissed the lawsuit as meritless.”…

    • 1418 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    No One Would Listen

    • 1165 Words
    • 5 Pages

    This book brought out the failures of the Securities and Exchange Commission (SEC) in one of the biggest Ponzi schemes in America’s history, as orchestrated by Bernie Madoff. Harry Markopolos caught up with Madoff’s Ponzi scheme earlier on in his career and saw all the red flags. There was no explanation of the continuous one percent yield in over forty five stocks that Madoff dealt with. Madoff took advantage of the laxity by the SEC officials in failing to follow up complains with an investigation, and the trust bestowed upon him by the high and mighty. As long as the public saw paper trail provided by Madoff that the stocks were continuously yielding dividends, there was no cause for alarm. The few people that realized that Madoff was actually pushing a Ponzi scheme alerted the appropriate authorities which in turn let Madoff off with a slap on the wrist. The SEC went to investigate Madoff in his building on the 18th and 19th floor but missed a whole 17th floor where the scam was mainly doing its operations. Over a period of nine years Markopolos alerted the SEC five times about the Ponzi scheme that Madoff was running, but they caught up with him when most of the money was already spent lavishly in gifts and exorbitant parties.…

    • 1165 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    Bernie Madoff

    • 1197 Words
    • 5 Pages

    Bernard (Bernie) Madoff committed this century’s largest Ponzi scheme to date. First we will define Ponzi Scheme – it is a fraudulent pyramid scheme where original investors are paid their gains out of new investors money so it would appear to old investor that the scheme (business) is producing an unusually large return (Albrecht, 2009). The Ponzi scheme that Madoff created and pulled off for years was quite intricate. In a standard pyramid scheme each victim unknowingly brings in more and more victims, where as a Ponzi scheme has a single entity (group or individual) to keep up with and organize the fraud. The operator of the Ponzi scheme then will take new money brought in from recent investors and pay off previous investors. For this to continue on there must be a constant influx of new investors so there must be someone working that angle on a regular basis. Eventually the group of new investors will run out because the funds dry up. In a lot of Ponzi schemes when they begin to run low on victims things seem to fall apart and investors loose it all. In some cases the perpetuator escapes the area with all the money he / she have scammed. When or if they are caught the perpetuator will have to face prosecution and / or repayment of all money to victims and possible jail / prison time or pay restitution to the government. In some cases there are assets seized to reimburse victims and pay restitution (Smith, 2011).…

    • 1197 Words
    • 5 Pages
    Powerful Essays
  • Better Essays

    Bernie Madoff

    • 1238 Words
    • 5 Pages

    After this happened anyone caught swindling money from incent investors would be know as to have pulled a Ponzi scam. No one our nation has every beaten what Charles Ponzi until 2008. Bernie Madoff has been charged and convictedof pulling off the largest financial scam every by taking over $50 billion over a course of decades from people that trusted him to invest and give large returns. But who is the man that earned this trust and where did he come from?…

    • 1238 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Bernie Madoff Case

    • 412 Words
    • 2 Pages

    To begin, Bernard Madoff is significantly pessimistic about whatever is left of Wall Street, bringing up that the expansive banks dealt with his money, as well as promoted his assets. HSBC says it didn't realize that extortion was being dedicated and lost One billion dollars of its own as a consequence.…

    • 412 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Those affected ranged from carpenter-union pensioners to French aristocrats. Many of his victims are still waiting to learn if they will recover even a small fraction of the wealth they lost. And some anxious investors, who withdrew much more than they put into their Madoff accounts, are facing lawsuits that seek to reclaim profits that were paid with stolen money. Originally, Madoff stated that his company had liabilities that topped out at US$50 billion. Prosecutors of his case, however, stated that the size of his scheme 's fraud was around $64.8 billion and that it affected over 4,800 of Madoff 's clients. This makes the Bernie Madoff scandal the largest case of international fraud…

    • 2107 Words
    • 9 Pages
    Good Essays
  • Powerful Essays

    Bernard Madoff

    • 1489 Words
    • 6 Pages

    References: A (Very Brief) Encyclopedia of Securities Fraud. (n.d.). Retrieved April 20, 2009, from http://www.abanet.org/buslaw/blt/2007-03-04/donley.shtml…

    • 1489 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    According to the NCAA website, the NCAA has over 444,000 college student athletes. There are scholarships for some athletes but not all student-athletes receive scholarships. I myself am a scholarship football player here at Kutztown University, which means I receive a partial athletic scholarship for my athletic achievements in high school. There are many athletes around the world who do not receive scholarships, and those who do are not getting paid what they should be for the talents. Universities make millions of dollars off of student athletes, so why do we not get to see the money we bring to the school.…

    • 2074 Words
    • 9 Pages
    Better Essays
  • Good Essays

    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.…

    • 1171 Words
    • 5 Pages
    Good Essays