Bernard Madoff Ponzi Scheme

The Bernard Madoff Ponzi Scheme

Describe three types of illegal business behavior alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business. Three illegal business behaviors by Madoff were conspiracy, securities fraud, money laundering, and perjury. Conspiracy is “Agreement between two or more persons to commit an unlawful act or to accomplish a lawful end by unlawful means” (Merriam-Webster Dictionary, 2011). Although Madoff originally stated that he was the sole mastermind behind the Ponzi scheme, others have come forward and plead guilty to assisting Madoff with covering the scheme. Madoff violated the Securities and Exchange Commission with securities fraud;
Madoff were the banks, foundations, and the SEC. They were impacted in the following ways. Loss of assets, loss of funds to operate, and many foundations had to close their doors permanently; and others were so financial well off they suffered no financial hardships at all. This cause a ripple affect and caused other foundation to have to cease operations due to the funds they received to operate came from foundations that conducted business with and was overseen by Madoff. The “Jewish Federation of Greater Washington had 10 million invested in Madoff Securities, but because it only invested 8% of its endowment they notified their donors that they would be working very hard to recover the funds. Some companies like North-Shore-Long Island Jewish Health Systems reported it had 5.7 million exposed to Madoff Securities but the donor who originally gave them the funds recommended they place the funds into the securities company agreed to reimburse the health system for any financial losses they incurred (Strom, 2008, para #15). Therefore all companies did not lose everything they had but those who had pension funds were in pretty bad condition due to most of them lost their life savings. The SEC was under fire for not investing Madoff Securities after being informed many times of the suspected financial fraud. According to Harry Markopolos,” he had repeatedly sounded alarms about Mr. Madoff firm and no one would listen to what he was saying. He had gone to an aide of Eliot L. Spitzer and to an attorney general of New York but neither followed up on the leads he provided” (Dealbook, 2010, para#5). Harry also stated that when he approached Grant Ward the New England regional director of the SEC, he was not prepared and did not have enough training to handle the situation at hand. In my opinion this seems to be the norm for governmental agencies and corporations as well. There are too may job being