Preview

Unethical Leader: Madoff

Good Essays
Open Document
Open Document
1168 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Unethical Leader: Madoff
Bernard Madoff

Bernard Lawrence Madoff was on April 29, 1938, in New York City, he earned his bachelor's degree in political science from Hofstra; he started studying law at Brooklyn Law School, but quit later to begin his own investment firm. Using the $5,000 he earned from his summer jobs, Madoff and his wife founded Bernard L. Madoff Investment Securities, LLC.
As the business expanded Madoff's fame as a successful investor grew, Madoff’s Securities began using computer technology to develop stock quotes. The program that the firm tested and helped to develop became the National Association of Securities Dealers Automated Quotations, or famously as NASDAQ stock exchange which Madoff later served as president of the board of directors.
But on the 10th of December 2008 Madoff became famous for a very different reason, after the investor informed his sons that he planned to give out several million dollars in bonuses two months earlier than scheduled, they demanded to know where the money was coming from. Madoff then admitted that a branch of his firm was actually an elaborate Ponzi scheme (we all must know what’s a Ponzi scheme) and that he had lost $50 billion of his investors' money Madoff's own sons reported their father to federal authorities, and the next day Madoff was arrested and charged with securities fraud. (He managed to raise good sons?).
Madoff pled guilty to 11 felony counts—securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan.
Madoff was sentenced to 150 years in prison on 29th of June 2009.

So what went wrong?

Analyzing Madoff according to our lecture slides about unethical behaviours we tried to understand Madoff’s decisions:

A series of experiments conducted by psychologists at the University of California, Berkeley, suggests that

You May Also Find These Documents Helpful

  • 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
  • Powerful Essays

    Bernard Madoff

    • 1489 Words
    • 6 Pages

    Smith, A. (n.d.). Madoff pleads guilty to all 11 charges in federal court - Mar. 12, 2009 . Retrieved April 20, 2009, from http://money.cnn.com/2009/03/12/news/newsmakers/madoff_courtappearance/index.htm…

    • 1489 Words
    • 6 Pages
    Powerful 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
  • Powerful Essays

    No One Would Listen

    • 1165 Words
    • 5 Pages

    One of the reasons Madoff was able to perpetrate his fraud for so long was his preference for marketing his investment business by word of mouth. Until the scam's later years, people heard about it from friends. It was a private club, one that, famously, became only more desirable because of Madoff's seeming reluctance to admit new investors. One of the tacit conditions, as we know now, was an understanding that information about Madoff investments -- including their existence was to be held closely. Most…

    • 1165 Words
    • 5 Pages
    Powerful Essays
  • Better Essays

    Bernie Madoff

    • 1238 Words
    • 5 Pages

    Mr. Madoff had a business installing and fixing sprinklersystems but he saved money and with only $5,000 he joined the ranks of Wall Street in the late 1960’s. With his very small firm he got his start by matching buyers of inexpensive “penny stocks” with sellers in the growing market. But in the late 1970’s his firms and those like his got the opportunity to start trading prestigious blue-chip stocks and the rest became history. He started cultivating key relationships with regulators which in turn gave him the upper hand when it came to staying under the radar of the S.E.C. When he worked hard to adopt new trading technologies in the 1990’s he became the head of NASDAQ. Mr. Madoff had an attitude of using the mantra of “kiss” when it came to his employees and wanted everything completely organized and always looking like a top notch operation. So with all of this prestigewhat happed with him to just…

    • 1238 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Bernie Madoff failed to obey the laws that are considered the minimum code of conduct to which society has agreed to respect. “Breaking laws means breaking the social contract to which he agreed in becoming a member of society”. In turn this means that society has the right to punish him by revoking the rights granted by it.…

    • 1476 Words
    • 6 Pages
    Powerful Essays
  • 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
  • Powerful Essays

    Bernie Madoff Essay

    • 5930 Words
    • 24 Pages

    Madoff’s scheme to defraud his clients at Bernard Lawrence Madoff Investment Securities began as early as 1980 and lasted until its exposure in 2008. Bernard carried out this scheme by soliciting billions of dollars under false pretenses, failing to invest investors’ funds as promised, and misappropriating and converting investors’ funds to benefit Madoff, himself, and others without the knowledge or authority of the investors. To execute the scheme, Madoff solicited and caused others to solicit potential clients to open trading accounts with Bernard Lawrence Madoff Investment Securities (BLMIS) on the basis of a promise from him. He promised to use investor funds to purchase shares of common stock, options and other securities of large, well-known corporations, and representations that he would accomplish high rates of return for client, with limited risk. (“United states of,” 2009) Among other things, Mandoff marketed to clients and prospective clients an investment strategy referred to as a "split strike conversion" strategy. Clients were promised that Bernard Lawrence Madoff Investment Securities (BLMIS) would invest their funds in a basket of approximately 35-50 common stocks within the Standard & Poor's 100 Index (the "S&P l00"), a collection of the 100 largest publicly traded companies in terms of their market capitalization. Mandoff claimed that he would select a basket of stocks that would closely mimic the price movements of the S&P 100. Mandoff further claimed that he would opportunistically time those purchases, and would be "out of the market intermittently, investing clients' funds in these periods in United States Government issued securities such as United States Treasury bills. Madoff also claimed that he would hedge the investments that he made in the basket of common stocks by using investor funds to buy and sell option contracts related to those stocks, thereby…

    • 5930 Words
    • 24 Pages
    Powerful Essays
  • Good Essays

    Choice Theories

    • 323 Words
    • 2 Pages

    Madoff was a master thief and financier. In 2008, he revealed that the asset management arm of his firm, Bernard L. Madoff Investment Securities, was "just one big lie". In what he described as a Ponzi scheme, he took his investors for $65 billion over the course of two decades. The scheme wasn't revealed until Madoff himself confessed his crimes (How Ponzi Schemes Work).…

    • 323 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Madoff’s unethical behavior occurred when he started taking money from one investor and using it to pay for another. A group of people were investing their money into another group as a way to increase their profits, very few people or clients were aware of what was going on, and all the others trusted that their money was being used as it was intended. The ultimate factor that caused Madoff’s Ponzi scheme to…

    • 903 Words
    • 4 Pages
    Good Essays
  • Good Essays

    First, Bernard Madoff started a stock trading business in 1960 that was highly successful. This business consisted of buying and selling stocks that were not on the New York Stock Exchange. Conversely, once Pete Madoff came into the business, Bernard created the investment management business, which is where the fraud occurred. Bernard was a respected businessperson that served on boards and even created his own foundation. In the financial industry, Bernard Madoff was a powerful person with several…

    • 396 Words
    • 2 Pages
    Good 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
  • Satisfactory Essays

    Bernie Madoff Essay

    • 203 Words
    • 1 Page

    Bernie Madoff held numerous high profile positions in the stock market community. I would even go as far as to label him as the master of networking. After graduating from Hofstra College, he marries his high school sweetheart, and proceeds to work for his father-in-law’s accounting firm as an investment advisor (Gaviria, Smith, & McCoy, 2009). As Madoff’s trading business grows over the next several years, he joins multiple committees as he begins to fight for regulatory changes in order to make trades easier and more convenient, not to mention he had been in business for decades. This gives Bernie Madoff the persona that he is educated, responsible, and respectable; which leads his to be trusted by many investors. (Ferrell, Fraedrich, &…

    • 203 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

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

    • 349 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Bernie Madoff was a successful businessman, who built his business with an investment of five thousand dollars and ran his business using Ponzi schemes. His Ponzi schemes are what made him acquire so many investors and make billions. As crooked and illegal as Bernie Madoff's actions might've been he found a way to still strike as an iconic and incredibly successful business man. Bernie Madoff made it seem like if you didn't have a connection to him then your name was unheard of. The only way you were able to be let into his "community" was by having special connections. He created this need of acceptance by having a high confidence level and strong communication skills to make people buy into his hype. His motivation was off of the pure greed of the green papers of North America; money. His…

    • 1218 Words
    • 5 Pages
    Good Essays