The inside Job Film by Charles Ferguson - Essay Example

Download file to see previous pages The Inside Job (2010) film by Charles Ferguson tries to blame a broader cast list for the financial crisis of 2008 and discusses how so little has been done to change the financial world or bring criminal prosecutions to the key players (Ahmad 1). The director's criminal lineup comprises bankers, politicians, regulators, and academic and credit rating organizations. Furthermore, these politicians were ex-bankers who illegally gained money to fund their campaigns in politics. For this paper, we will focus on Madoff's giant Ponzi scheme, most of which seems to be fraud, even though system-wide indiscretions point, as well, to subtler forms of capture and corruption. A couple of years ago, the SEC was aware that Madoff, who had previously worked on the commission advisory group, had several violations plus was misleading it on how to oversee the funds their clients have given them (Ahmad 1). Nevertheless, the SEC was not successful in uncovering the Ponzi scheme. Upon his arrest and sentencing, Madoff claimed that his companies kept liabilities of more than US$50 billion, but prosecutors argued that the fraud was an actual $64.8 billion, basing their estimation of the number of accounts of his clients, which was 4800 as of 30th November 2008. Overlooking the opportunity costs, as well as the taxes paid on false profits, half of his investors, direct, lost no funds at all. The film considers it to be the greatest accounting fraud of all time (Ahmad 1).
The rule of law that the practice violated was investment fraud, which involved payment of alleged returns to Madoff's investors from money invested by fresh investors. That also creates the definition of investment fraud where payments of alleged returns are paid to existing investors by the money brought in by new investors; thus the new investors go at a loss at the company's knowledge (Ahmad 1). Madoff solicited his new investors by pledging to invest their funds in opportunities that will generate very high returns with absolutely no risk. By reaching an amount of US$64 billion, he centered on attracting fresh investors to fulfill pledged payments to previous investors to create the false appearance that his investors are benefiting from his legitimate business (Ahmad 1).

The complainants are likely to win the case because of this since this is a clear fraud case. Even in reality, these were the charges presented against Madoff by the prosecution and they won the case. You do not need any further information to declare the company as a Ponzi scheme as the little evidence presented reveals so. ...Download file to see next pages Read More