The Bernie Madoff Ponzi Scheme
The Bernie Madoff Ponzi Scheme
Ethical Situation:
In December of 2008, Bernie Madoff, was sentenced to 150 years in prison for swindling investors out of billions of dollars and creating one of the largest “Ponzi” schemes of all time(SEC). Bernie Madoff initially started out by establishing himself as a well-respected financial expert because he had been one of the founders of the NASDAQ stock exchange, and was chairman on the Board of Governors and the NASD. He created his own company called Bernie L. Madoff Investment Securities LLC which was established in 1960 as an investment advisory firm (SEC). This firm was considered the “trading powerhouse” and had been successful for up to 40 years (NY Times). Madoff became well known and was …show more content…
Madoff later created a hedge fund called “Ascot Partners” which was a giant scam to swindle investors such as “hospitals, foundations, and religious groups” (Lenzner). He was able to carry on this scheme for over 20 years because of the way he had advertised and handled business with his investors. Madoff never advertised “getting rich quick”, but rather stayed consistent and would pay out stable amounts of money whether the stock was high or low (Lenzner). His investments would always show up as a return even though the same investments made by other firms would not. Madoff created fraudulent documents to support the investments he was claiming, and claimed to have a “black box model” which was a system he designed to tell when to buy or sell …show more content…
Organizations and charities lost out on millions of dollars and people who invested with Madoff’s company lost everything. Some people even committed suicide over their losses. If this was how every investment firm were to act the economy would not only completely melt down, but no one would trust investors anymore.
My Opinion:
I do not believe there was an overreaction in regards to how upset people were over the ordeal. I do not think money would be something to commit suicide over, but Madoff deserved a harsh punishment for his crimes. I think Madoff’s greed overtook him and the fact that for twenty years he was never caught. When it is so easy to commit a crime without getting caught a person would most likely continue doing it.
References
"Bernard L. Madoff." News. The New York Times, 29 Sept. 2012. Web. 29 Sept. 2012.
Ethical Situation:
In December of 2008, Bernie Madoff, was sentenced to 150 years in prison for swindling investors out of billions of dollars and creating one of the largest “Ponzi” schemes of all time(SEC). Bernie Madoff initially started out by establishing himself as a well-respected financial expert because he had been one of the founders of the NASDAQ stock exchange, and was chairman on the Board of Governors and the NASD. He created his own company called Bernie L. Madoff Investment Securities LLC which was established in 1960 as an investment advisory firm (SEC). This firm was considered the “trading powerhouse” and had been successful for up to 40 years (NY Times). Madoff became well known and was …show more content…
Madoff later created a hedge fund called “Ascot Partners” which was a giant scam to swindle investors such as “hospitals, foundations, and religious groups” (Lenzner). He was able to carry on this scheme for over 20 years because of the way he had advertised and handled business with his investors. Madoff never advertised “getting rich quick”, but rather stayed consistent and would pay out stable amounts of money whether the stock was high or low (Lenzner). His investments would always show up as a return even though the same investments made by other firms would not. Madoff created fraudulent documents to support the investments he was claiming, and claimed to have a “black box model” which was a system he designed to tell when to buy or sell …show more content…
Organizations and charities lost out on millions of dollars and people who invested with Madoff’s company lost everything. Some people even committed suicide over their losses. If this was how every investment firm were to act the economy would not only completely melt down, but no one would trust investors anymore.
My Opinion:
I do not believe there was an overreaction in regards to how upset people were over the ordeal. I do not think money would be something to commit suicide over, but Madoff deserved a harsh punishment for his crimes. I think Madoff’s greed overtook him and the fact that for twenty years he was never caught. When it is so easy to commit a crime without getting caught a person would most likely continue doing it.
References
"Bernard L. Madoff." News. The New York Times, 29 Sept. 2012. Web. 29 Sept. 2012.