Nobody downloaded yet

Madoffs Ponzi Scheme - Essay Example

Comments (0) Cite this document
Summary
The paper “Madoff’s Ponzi Scheme” seeks to evaluate a Ponzi scheme that took away near about 50 million dollars from his clients through his firm Madoff Investment Securities. Harry Markopolos, an independent financial investigator developed serious doubts about the marketing strategies of Madoff…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.3% of users find it useful
Madoffs Ponzi Scheme
Read TextPreview

Extract of sample "Madoffs Ponzi Scheme"

Download file to see previous pages Still it took a long time to assess for the authorities to verify that it was a Ponzi scheme. It was one of the most cold-blooded, deliberately devised and implemented Ponzi scheme. This fraud had serious impact on people’s view about investment. All investors start viewing investment firms and charities with a lot of suspicion and firms faced a considerable fall in business. The only positive element was the fact that it acted as an eye-opener for both the authorities and the public. While public became aware about the need to be careful about the promises of unbelievably high returns, the authorities too understood the need for new statutes to prevent such frauds. Madoff’s intentions still remain a mystery It still remains a mystery why such a prominent figure who was well aware about the movements in the market and also about the implications of such a Ponzi scheme decided to implement such a devilish idea that caused irrevocable loss to many people. It is yet to be resolved as to why he went on paying the withdrawals if he wanted to cheat the investors. In addition, Madoff tried to hold back the firm’s imminent fall ten days before his arrest by receiving a huge sum of 250 million dollar from a close friend (Frank and Efrati). It seems closer to insanity that he admitted that his scheme was a Ponzi scheme and that he did not invest any money as had promised. However, it seems a calculated move that he managed to keep all his family members away from legal complexities by taking the responsibility of the fraud all to himself. One has to assume that seeing his irrational behavior, all other members managed to secure their position by avoiding any position in the company that involved the responsibility of money management. However, a man who could con the authorities and auditors for nearly two decades could easily devise a better plan than this Ponzi scheme if he wanted to. Thus, it still is to be ascertained as to why he chose a Ponzi scheme, the outcome of which he knew pretty well. The best assumption possible is that his extreme wizardry might have turned him insane. I. What are the ethical issues involved in Madoff case? One has to admit the fact that the Madoff’s system was unethical in nature from head to toe as the scheme was a Ponzi scheme. While attracting the investors, Madoff was well aware of the imminent failure of the scheme. All financial experts and even common investors are well aware of the fact that Ponzi scheme always fail due to its own weight as such schemes require an ever-increasing flow of money to pay the retiring and withdrawing clients. Once the inflow of fund diminishes, the system collapses. 1) Misusing the office of trust The first element of unethical practice is in Madoff’s misusing his position of repute in the society. He was an educated and experienced person in a position of trust, respectability, responsibility and trust. The aura of authority he created in this field is evident from the list of his clients including influential people, big organizations and even banks. Some of them were The Fairfield Greenwich Group, Tremont Group Holdings and Westport National Bank. All his investors gave him money on the belief that there were many checks and balances to make his investment plan legitimate.  ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Madoffs Ponzi Scheme Essay Example | Topics and Well Written Essays - 3000 words”, n.d.)
Retrieved from https://studentshare.org/business/1406609-the-fraud-of-the-century-bernard-madoff
(Madoffs Ponzi Scheme Essay Example | Topics and Well Written Essays - 3000 Words)
https://studentshare.org/business/1406609-the-fraud-of-the-century-bernard-madoff.
“Madoffs Ponzi Scheme Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/business/1406609-the-fraud-of-the-century-bernard-madoff.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Madoffs Ponzi Scheme

White Collar Crime. Ponzi Schemes

...and check their background. Third, always seek the opinion of disinterested third parties or parties independent and authoritative on the status of possible ponzi scheme perpetrators before making an investment or a decision to invest. Meanwhile, the United States Securities and Exchange Commission reported that they have been checking into ponzi cases each year to prevent new victims (2011). The Securities and Exchange Commission tries to recover assets and emergency actions are executed like asset freeze and temporary restraining order to prevent harm and bring perpetrators to justice (Securities and Exchange, 2011). The punishment for ponzi perpetrators can be severe....
5 Pages(1250 words)Essay

Pension scheme

...?Finance and Accounting What are defined benefit and defined contribution pension schemes? Compare them from the perspective of a member of a pension scheme. Defined Benefit Pension Scheme The distinction feature of defined benefit pension scheme is in the procedure of payment and the inputs of factors that determines the amount of money that a pensioner will receive. Largely, it is the employer who would commit him or her self to either choosing to pay the employee a defined benefit pension or not. Once selected, the employer pays the employee upon pension, a fixed amount of money every month for as long as the pensioner is alive (Cox, Jonathan and Stephan, 2011, p....
6 Pages(1500 words)Essay

Bernard Madoff Ponzi Scheme Case

...?Bernard Madoff Ponzi Scheme Case Introduction Bernard Madoff operated what was considered to be one of the most successful investment strategies in the world, for more than seventeen years. His embezzlement of funds came to light in December 2008, as one of the most detrimental Ponzi schemes in history. Many large private investors, sophisticated bankers, hedge funds, charitable institutions, and others have been severely impacted by the Madoff’s fraud (Gregoriou & Lhabitant, 2009a). The former director of National Association of Securities Dealers Automated Quotation System (NASDAQ), had been “pretending to operate a...
6 Pages(1500 words)Essay

Ponzi and Pyramid Schemes

...?Ponzi and Pyramid Schemes By Definition Ponzi and Pyramid schemes are illegal and very hazardous. They are ‘get-rich-quick’ methods that can cost many people a lot of money. At present, Ponzi and Pyramid schemes appear in a number of forms that it is difficult to identify them instantly. However, all the forms of these schemes share one common characteristic and that is, they all assure customers or investors big profit based on recruiting others to join their plan, instead of generating profits from some genuine deal or trade of products. Though, some forms of these schemes can claim to sell a product,...
4 Pages(1000 words)Research Paper

IP SCHEME

...efficiently but also be able to accommodate as many users without administration privileges. Conclusion Poor integration is a very difficult task to reverse. Due to this, XUMUC has to cover a lot of expenses so as to allow the shifting. Dynamic addressing is very convenient in this type of network since the organization does need a higher administration overhead to assign IP addresses. However in terms of getting a secure network, the best addressing scheme would have to be static. This is because in this addressing scheme, the admin has to approve every assigned IP address unlike in the dynamic case. During the shifting, the whole staff and users have to be educated and informed on how the changes will...
3 Pages(750 words)Term Paper

Ponzi Schemes And Madoff's Fraud

...Thinking Critically – Ponzi Schemes There is no difference when it comes to the actions of Charles Ponzi and Bernard Madoff because they both didsomething that was illegal. The fact that Ponzi was from the working class is not an excuse for using others peoples money to pay back investors. 2. A Ponzi scheme works when investors are provided with above-average returns on their investment, except that much of their returns come from the money invested by new investors. 3. Yes, the SEC does bear some responsibility for the extend of the Madoff scheme because Harry Markopoulos did try to...
3 Pages(750 words)Essay

Madoffs Fraud Case

...to perpetuate the biggest of all investment frauds. The multi-billion dollar fraud scheme, known as the Ponzi scheme, defrauded investors of their invested capital during the collapse of Benard L. Madoff Investment Securities LLCthe investment firm owned by Bernard Madoff. According to his confession in the court, Peter said that the investment sham caught him in shock when his brother told him the truth in the December of 2008, but said that he helped to divert the firm’s remaining funds to friends and family of the Madoffs. The employees forged documents that created a wrong impression of the company as trading and lured them into...
5 Pages(1250 words)Research Paper

Ponzi Scheme of Bernard Madoff

...Analyzing the Madoff Case Summary of the Case Bernard Madoff created the world’s greatest Ponzi scheme. A Ponzi scheme’s system makes sure that it completely disintegrates after the discovery of the fraud. The fraudulent activities of Madoff fell down upon the constant streams of redemptions after the financial turmoil. However the disaster is that the Securities and Exchange Commission (SEC), on several instances, comprising many reliable pursuers, had chances to inspect and discover Madoff’s scheme. The most known and exposed prospect was given by financial analyst Harry Markopolos....
4 Pages(1000 words)Case Study

Is social security a ponzi scheme

...scheme in the history of United States is the ‘Madoff Ponzi Scheme’, run by former chairman of the NASDAQ, Bernard L. Madoff. The scheme lasted over three decades and transcended national boundaries. Madoff reportedly siphoned off $65 billion from the gullible public (Benson 2009). The Social Security has a much longer history and is much larger in size. Social Security isn’t an individual investment plan. It’s a plan backed by the government and is intended to provide predictable income to the most vulnerable sections of the society. The aforesaid discussion establishes that equating Social Security to a...
5 Pages(1250 words)Essay

Pricing Scheme

...Economics March 23, Introduction The stock market is composed of digital service stock market middle agents. The agents’ digital reports are presented to the digital service patrons. Paying commissions to the agents, the patrons use the agents’ digital reports for investment decisions. In exchange the agents get a commission from selling the digital reports. The digital reports include a research on the profitability of investing in the companies’ stocks, including the Verizon stock. The demand for the agents’ digital service influences the stock market prices of the Stock market units, especially the Verizon stock. Verizon Pricing Scheme The United States stock market is the place where individuals buy or sell stocks....
3 Pages(750 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Madoffs Ponzi Scheme for FREE!

Contact Us