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Business: Bernard Madoff - Essay Example

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Bernard Madoff ruined his large investment firm into one of the largest Ponzi scheme in history. He was involved in several cases of fraud that ruined several investors’ lives. Later when the fraud was uncovered, Madoff was convicted for eleven accounts of unlawful activities and sentenced for 150 years. …
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Download file to see previous pages Bernard Madoff admitted on March 12 2009 that he was guilty to an eleven count of unlawful charges. He was charged with infringements of the 1933 securities act, 1934 securities exchange act, and the 1940’s investment advisers act anti-fraud provisions (Siegel 112). Madoff confessed during his hearing that he had been greatly involved in defraud and several investors had fallen victims. Madoff was given a life sentence of 150 years on June 29 2009. Earlier in 1960, Madoff established an investment firm that was known as Bernard Madoff investment securities, LLC. It was among the largest trading firms at that time and its focus was mainly to manage investment, to advice and to manage billions in assets. Madoff became famous and he managed to win the trust of several wealthy individuals. The revelations of the ongoing scheme came after the market crashed and people demanded their money back. It then appeared that the Madoff firm’s asset management arm was a Ponzi scheme. He had not made any investment on the money received from investors rather; he had deposited in different banks. When the investors wanted money from their accounts, Madoff would pay them using the interest and the principal. It became difficult for Madoff to make proper profits in 2007 when the market crashed. He told his sons what had happened and they contacted the FBI. Madoff admitted to having been involved in the illegal scheme that consisted of false trading, unlawful foreign transfers and untruthful SEC filings (Kotz 126). According to him, his major aim was to meet his client’s demands of high returns that he could not fulfill legally. Bernard Madoff was involved in various unethical issues in different levels that include individual, organizational and societal (Ferrell et. al 101). On the individual level, Madoff became dishonest to several investors both the prospective and the current for his own personal benefit. He made false promises to them that their returns would be consistent. He conducted his investment firm illegally hence, disappointing his clients and himself in the end. It was also unethical for Madoff to send manipulated returns to different investors with regard to their investment. The investors were not aware that their expectations would not be met. Still on the individual level, Madoff also, did not disclose any information to his family, employees and friends. His dishonesty negatively affected the lives of several individuals. On the organizational level, he gave out information that was false to the regulators who were monitoring his firm. It was impossible for them to realize the scheme even when individuals raised concern regarding Madoff’s activities. Madoff’s action resulted in failure in his business together with other businesses that had direct links with his. The survival of most of these of firms was short-lived because of the scandal that Madoff got involved in. On societal level, Madoff made donations to various charities, non-profits and educational institutions. In return, some of these institutions made several investments in Madoff’s firm. Later, most of these charities and the non-profits organization collapsed since they were not able to conduct the work that they were established to do. The Ponzi scheme also had a negative impact on the perception of the society regarding investment on different businesses. Therefore, for the society in general, they will remain doubtful and lose trust with different businesses regarding their investment. In order to win back the society’s trust and even respect for investment businesses, great effort will have to be in place. Historically Madoff Ponzi scheme has been perceived as being the largest criminal plot. It is estimated that the total costs incurred by the clients is $65 billion. While he will be detained for life, authorities are still trying to figure out what could have happened to the whole amount. Madoff has been termed as being greedy and that he almost ruined the financial system of the whole nation. A Ponzi ...Download file to see next pagesRead More
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