What Is The Bernie Madoff Scandal
University of Missouri – Columbia
The Bernie Madoff Scandal
Finance 2000: Survey of Business Finance
Student ID #: 12366167
December 17th, 2014 The Madoff scandal is one of more prominent scandals regarding business ethics in more recent times. The scandal was a complex Ponzi scheme ran by Bernard Madoff. A Ponzi scheme was originally named after Charles Ponzi, who would pay returns to its investors from new capital paid to the operators by new investors rather than any profit generated. Bernard Madoff ran the largest Ponzi scheme in history through his wealth management firm, Bernard L. Madoff Investment Securities LLC. The estimated amount of the fraud was about $64.8 billion based on amounts in the accounts of 4,800 clients. Madoff was sentenced to 150 years in prison with restitution of $17 billion on June …show more content…
29th, 2009. The Ponzi scheme was becoming impossible to sustain in 2008 when the entire market was in a general downturn as the world was in a global recession. Madoff had begun “raising money for a new investment” a few weeks before his arrest to help cover the clients asking to withdraw money from their accounts. The result of his arrest was when he asked his two sons to pay out bonuses to the employees, and they asked why they would pay their employees bonuses when they couldn’t pay their investors. The brothers then turned in their father to the authorities. Even though Bernard Madoff was the mastermind behind the Ponzi scheme, after further investigation, he was not the only one in on the scheme. Bernard Madoff has definitely gotten what he deserved in that he was given 150 years in prison with restitution of $17 billion.
He will end up dying in prison. Madoff was also not cooperative with investigators, which made investigations into accomplices very difficult. Madoff was basically completely silent, and stood his ground that he was the sole person behind the Ponzi scheme. Many people had lost their life savings, which they cannot recover. Madoff had received copious amounts of death threats during his sentencing, and might still be getting death threats to this day. The victims really couldn’t see this coming unless they were a very experienced person with knowledge of wealth management and wealth growth. The returns the victims were receiving were always very consistent, but going into the recession, they should have seen how there was no way they could be getting the same returns. The entire market was plummeting, yet Madoff’s victims were still receiving consistent returns, which should be a major flag to anyone with minimal knowledge. But, the idea of being lucky, and having trusted the man for so long blinded his
victims.
More people are definitely at fault, and should have been charged. Madoff’s brother Peter Madoff was charged with falsifying records, and other charges that resulted in Peter receiving a 10-year prison sentence. Five directors at Aurelia Finance, a Swiss wealth management corporation, are also receiving criminal charges. However, there are many more people who should be charged, considering the complexity of the Ponzi scheme, and how silent Madoff was about cooperating with investigators.
The Bernie Madoff Scandal
Finance 2000: Survey of Business Finance
Student ID #: 12366167
December 17th, 2014 The Madoff scandal is one of more prominent scandals regarding business ethics in more recent times. The scandal was a complex Ponzi scheme ran by Bernard Madoff. A Ponzi scheme was originally named after Charles Ponzi, who would pay returns to its investors from new capital paid to the operators by new investors rather than any profit generated. Bernard Madoff ran the largest Ponzi scheme in history through his wealth management firm, Bernard L. Madoff Investment Securities LLC. The estimated amount of the fraud was about $64.8 billion based on amounts in the accounts of 4,800 clients. Madoff was sentenced to 150 years in prison with restitution of $17 billion on June …show more content…
29th, 2009. The Ponzi scheme was becoming impossible to sustain in 2008 when the entire market was in a general downturn as the world was in a global recession. Madoff had begun “raising money for a new investment” a few weeks before his arrest to help cover the clients asking to withdraw money from their accounts. The result of his arrest was when he asked his two sons to pay out bonuses to the employees, and they asked why they would pay their employees bonuses when they couldn’t pay their investors. The brothers then turned in their father to the authorities. Even though Bernard Madoff was the mastermind behind the Ponzi scheme, after further investigation, he was not the only one in on the scheme. Bernard Madoff has definitely gotten what he deserved in that he was given 150 years in prison with restitution of $17 billion.
He will end up dying in prison. Madoff was also not cooperative with investigators, which made investigations into accomplices very difficult. Madoff was basically completely silent, and stood his ground that he was the sole person behind the Ponzi scheme. Many people had lost their life savings, which they cannot recover. Madoff had received copious amounts of death threats during his sentencing, and might still be getting death threats to this day. The victims really couldn’t see this coming unless they were a very experienced person with knowledge of wealth management and wealth growth. The returns the victims were receiving were always very consistent, but going into the recession, they should have seen how there was no way they could be getting the same returns. The entire market was plummeting, yet Madoff’s victims were still receiving consistent returns, which should be a major flag to anyone with minimal knowledge. But, the idea of being lucky, and having trusted the man for so long blinded his
victims.
More people are definitely at fault, and should have been charged. Madoff’s brother Peter Madoff was charged with falsifying records, and other charges that resulted in Peter receiving a 10-year prison sentence. Five directors at Aurelia Finance, a Swiss wealth management corporation, are also receiving criminal charges. However, there are many more people who should be charged, considering the complexity of the Ponzi scheme, and how silent Madoff was about cooperating with investigators.