What Is The Bernie Madoff Scandal

The Bernie Madoff Scandal is considered to be the largest financial and accounting fraud in American history. The details of the scandal itself are so complicated and unbelievable that it appears to be a work of non-fiction. Many have tried to gather enough evidence to make sense of what happened, but there was never enough evidence to prove when the fraud began. Madoff himself said that the scheme began in the late 1980s or early 1990s, but then again we cannot be certain of when it really started. Many lives have been effected by this scandal and cause some significant changes to be made to the Securities and Exchange Commission (SEC).
Before discussing his scheme, some facts about Madoff should be known. Without these facts, it would be
His fraud has been discovered as soon as 1999 by Harry Markopolos who looked at Madoff’s numbers and realized it was a fraud. He even reversed engineered it and reported it to the SEC. As the SEC took no action, Markopolos sent even more detailed reports in 2001 and again in 2005. There are several reasons for this. Due to his social status, Madoff had multiple connections with lawmakers and regulators. He spent more than $400,000 to influence the federal government and his niece even married an SEC official. Many speculated these connections help him go undetected. Madoff also kept information related to the scam a secret and hid it well. For example, few employees work in this particular division and all the data related is stored on a single IBM AS/400 server from the 1980s. Though, the primary reason Madoff was able to avoid detection was the SEC itself. The SEC claims it lacked funding and experience staff to verify the claims against Madoff. When Madoff was aware of these claims against him, he stated that he was astonished that the SEC did not verify these claim. In addition, he was able to get so many investors because instead of asking clients to invest in his fund like one would expect, he simply did nothing. As a result, it appeared that he did so well that he did not need their money, causing them to want to invest
They argued that it was the purpose of the SEC. The SEC was heavily criticized, even at congressional hearings. The SEC improved in many ways after the scandal. Eight SEC employees have been disciplined over the failures. Since 2008, several changes have been made to the SEC. including new leadership to ensure that it focuses on cases that are important, as well as initiatives to encourage cooperation with information. The have also started recruiting staff with better or specialized