...Bernard Lawrence ‘Bernie” Madoff Valerie Correa Prof. Masheika E. Allen BUS 100 Mini Session 10/26/2010 1. 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. Mr. Madoff was found guilty of white collar crimes. Some of the crimes he was found guilty of were money laundering, perjury and securities fraud. Description: Securities fraud is one of many white collar crimes which violate trading laws. The definition of security encompasses many things including stocks, bonds, commodities and other investments. Money laundering is money obtained from criminal activity as a white collar crime is and have it appear as it originated from a legitimate source. Money laundering laws were enacted to take the profit out of criminal activity. Perjury is known as lying under oath. It is the deliberate, willful giving of false, misleading or incomplete testimony under oath. Mr. Madoff, who is allegedly lost $50 billion in investor money in histories largest documented Ponzi scheme, He plead guilty for stealing vast sums of dollars from individuals and organizations, some of them charitable, by taking their money and pretending to invest it in the stock market, when in actuality he used the...
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...head: BERNARD LA WRENCE "BERNIE" MADOFF 1 BERNARD LA WERENCE "BERNIE" MADOFF Naamah Pagan Augustine Weekley Business Law 1 August 21,2011 BERNARD LA WRENCE "BERNIE" MADOFF 2 Introduction Bernard Lawrence "Bernie" Madoff ran one of the largest Ponzi Schemes. A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century. The scheme is designed to convince the public to place their money into a fraudulent investment. Once the scam artist feels that enough money has been collected he disappears taking all the money with him. 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. The three types of illegal business behavior alleged against Mr. Madoff were fraud, money laundering and perjury, The first illegal business activity I would like to talk about is fraud. Fraud is the representation of a matter of fact-whether by words or by conduct, but false or misleading allegations, or by concealment of what should have been disclosed-that deceives and \ intended to deceive another so that the individual will act upon it to his or her legal injury. Fraud is the intellectual use of deceit, a trick, or some dishonest means to deprive another out his/her/its money, property, or a legal right. (Hill/Hill) Madoff actually ...
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...Abstract This report allows the facts to be known concerning the still mysterious case of Bernard L. Madoff and his longtime investment securities activities, which eventually turned into an enormous fraud of incomparable size. In this report, you will begin to understand how Bernard Madoff was able to execute such an elaborate fraud. The illegal business behavior found in this case is too numerous to count however, quite a few will be identified. In addition, the roles of the perpetrators, accomplices, and their involvement in this scheme will be made known. This fraud had such an enormous impact on the victims, we will examine several implementations that the private investors could have implemented to protect themselves. An assessment of the perpetrators motives and the identity of some internal controls that could have deterred or prevented the fraud from occurring will be explored also. We will discover the action of the SEC and document how the fraud was discovered and investigated, including what should have been identified as “red flags”. And finally, a variety of legal actions arose when the Madoff fraud was uncovered, which is leading to more litigation currently and in the future. The Bernard Madoff’s Fraud Introduction Bernard L. Madoff was the mastermind and the admitted operator of the biggest Ponzi scheme in American History. His Ponzi scheme is considered to be the largest financial fraud in U.S. history. He stole millions maybe billions...
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...THE RISE AND FALL OF BERNIE MADOFF Bernadette Smith Business Law Professor Kopf 8/22/2010 Bernard Lawrence "Bernie" Madoff , born April 29, 1938 is an incarcerated former American stock broker, investment adviser, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in history. In March 2009, Madoff pleaded guilty to 11 federal crimes and admitted to turning his wealth management business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars. Madoff said he began the Ponzi scheme in the early 1990s. However, federal investigators believe the fraud began as early as the 1980s, and that the investment operation may never have been legitimate. The amount missing from client accounts, including fabricated gains, was almost $65 billion. The court-appointed trustee estimated actual losses to investors of $18 billion. On June 29, 2009, he was sentenced to 150 years in prison, the maximum allowed. Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008. The firm was one of the top market maker businesses on Wall Street, which bypassed "specialist" firms by directly executing orders over the counter from retail brokers. On December 10, 2008, Madoff's sons told authorities that their father had just confessed to them that the asset management arm of his firm was a massive...
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...Report case of Bernard Madoff’s Ponzi Scheme. I. Nature and background of firm or person. * Bernard Lawrence "Bernie" Madoff was born in April 29, 1938. He is an American swindler convicted of fraud and a former stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market. * This financial fraud admitted case of a Ponzi scheme that is considers be the largest financial fraud in U.S history. II. Ethical issue * Since the arrest in December, 2008, Mr. Madoff has been under house arrest at the mansion of a $7 million Manhattan him in the neighborhood. At that time authorities say Madoff confessed to family that he had done a scam that amount had risen to $50 billion. III. Analysis problem * A Ponzi scheme is a fraud that attracts investors with a promise of high returns, which are initially paid out from the investments made by subsequent clients rather than from legitimate profits made from the initial investment. Bernard Madoff * The success of these initial investment entices future investors, and in many cases reinvestment from the original investors. Because the return are based on the ability to attract future investors into the scheme rather than on legitimate earning, the scheme can last only as long as the perpetrator is able to contract an increasing number of investors, all of whom expect higher than normal returns. * A Ponzi scheme is likened to a house of card that is destined...
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...Quacks Like a Duck” Assignment 2 – Bernard Lawrence “Bernie” Madoff Business Law I March 4, 2011 Bernard Madoff Abstract Unethical behavior…sounds bad doesn’t it? But what employee can truly say that he is completely innocent of any unethical behavior in the workplace? Some of the most common unethical business behaviors are fudging work hours, making phone calls on business lines and photo copying of personal paperwork. Simple acts such as these are highly unlikely to have an employee face criminal charges but when the acts of embezzling money or falsifying business records are committed a company is more apt to prosecute. People have different views regarding what is ethical and what is unethical. Some feel that it’s okay to tell a little "white lie", or to make a quick long distance call on the company's dime, as long as they are not hurting anyone. In the case of Bernard Madoff unethical behavior crossed over from gray to definite black and white. The world Bernard Madoff offered to his investors was just too good to be true but because things were covered up and made to appear more than what they were he was able to roll out the red carpet of capital promises and people came running to be included at the party. Mr. Madoff was certainly an equal opportunity crook, he took advantage of everyone, and the only prerequisite was to have money. Influential people from all walks of life found themselves mesmerized by “Uncle Bernie” and invested millions of dollars...
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...and as a lifeguard on the beaches of Long Island, Bernard Madoff founded “Bernard L. Madoff Investment Securities,” a “trading power” house that would become one of the largest independent trading operations in the securities industry (Washington, 2012). In the year 2000 his company ranked among the top trading and securities firms in the nation. By age 70, his name had become legendary; he was considered to be one of the most “influential spokesmen” on Wall Street. But on December 11, 2008, Bernard Madoff was arrested and charged “in a 20 year Ponzi scheme, which would come to be known as “the most infamous fraud in Wall Street history (Leonard, 2008; Washington, 2012).” Mr. Madoff pleaded guilty to all federal charges filed against him, which included the following: “11 felony counts, including securities fraud, money laundering and perjury (Washington, 2012).” Judge Denny Chin was in charge of the proceedings, and on June 29, 2009, Bernard Madoff, former chairman of the NASDAQ stock exchange, was sentenced to the maximum penalty of 150 years. This paper will seek to analyze this case in its multiple dimensions in order to identify all ethical issues and propose potential alternatives to the moral choices that Bernard Madoff made. Facts Bernard Lawrence Madoff was born April 29, 1938. He grew up in a small Jewish community in Queens, New York. At age 22, in 1960, he founded his own wealth management business, “Bernard L. Madoff Investment Securities.” He made his business out...
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...Case 8: The Fraud of the Century: The Case of Bernard Madoff Introduction Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and the former non-executive chairman of the NASDAQ stock market. He is very successful in his early life. Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960 by buying and selling over-the- counter stocks that were not listed on the NYSE. As he became more successful, he moved the company’s headquarters from Wall Street to the famous “Lipstick Building” on Third Avenue. After that, Madoff started to help his investors to manage their money. He used Ponzi scheme to cheat his clients by promising of consistent returns of 10 to 12 percent. Base on his trustworthy and reputation, he success to find billions of dollars from hundreds of investors. Basically, Madoff just took money from new investors and uses it to pay off the old investors. Why he can make it because lots of investors lack financial knowledge. Also they won’t doubt about what the investment is as long as Madoff can make money for them. People didn’t know what is going on until Madoff can’t find any new investor to throw money in his schemes. After that, his schemes collapsed. In March 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme but he never indicated the involvement of any other company employees or his family members...
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...Bernie Madoff Andrea L. Nolt Strayer University Intro to Business Professor Karina Arzumanova August 21, 2011 Bernie Madoff Bernard Lawrence “Bernie Madoff” is an American former stock broker, investment adviser, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in history. (Bernard Madoff, 2011) This paper discusses the massive Ponzi scheme that Mr. Madoff created and those that were affected by it. 1. 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. Madoff reportedly admitted to investigators that he had lost $50 billion of his investors' money, and pled guilty to 11 felony counts—securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan—on March 12, 2009. (Biography, 2011) Mail fraud includes any scheme that attempts to unlawfully obtain money or valuables in which the postal system is used at any point in the commission of a criminal offense. (Mail fraud, 2011) By using the postal system for any of his illegal activities, he was committing mail fraud. Mail fraud is protected by the United States Code. Madoff also admitted to money laundering. Money laundering...
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...Law I – LEG 100 Dr. Dorothy A. Sliben November 22, 2010 Bernard L. Madoff The $50 billion hedge fund scandal involving Bernard Lawrence “Bernie” Madoff is the largest fraudulent scam in U.S. history, to date. This giant financial Ponzi scheme created and implemented by Madoff targeted members of the Jewish community. Moreover, Madoff’s Ponzi scheme impacted upon people from all walks of life. The people involved entrusted him implicitly with large sums of money. The funds fraudulently absconded, regardless of age, whether family, friends, celebrities, or investors encompassed life savings, pensions, institutional endowments; charities, non-profit organizations and/or corporate status. Once again, an individual under the guise of a “so-called” legitimate corporation conducts egregious actions above and beyond the scope of the law. 1. 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. In the Complaint filed by the United States Department of Justice, Southern District of New York (The United States Department of Justice, 2008), United States v. Bernard L. Madoff, 09 Cr 213 (DC), the government alleged that: Madoff committed 11 counts of securities fraud, investment advisor fraud (wherein he allegedly misled his investors about the health of his firm, Bernard L. Madoff Investment Securities LLC), wire and mail fraud, money laundering...
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...Question #1 Using an Internet news search, find an example of a business that has abused its power and encountered the wrath of social interest groups or the government. Using content, concepts, and class discussion points from chapters 1 – 3, introduce and discuss the situation and the current state. Conduct a stakeholder analysis and make recommendations for an improved outcome, using the same resources. Support your discussion with evidence from reputable resources, as well as content and concepts from the text. ANSWER I was overwhelmed while doing the internet news search to find an example of business that has abused its power. The search came up with so many examples that it made me realize that probably all the business abuse their position in some or the other way. There were many example to choose from but I chose “Corporate accounting scandal at Satyam “, which is also infamously called as India’s Enron. The reason why I selected this particular company is that I had my cousin brothers and sisters working for this company and this scandal affected our families in a big way. The background Scandals are like an iceberg, they represent the only visible catastrophic failure. Saytam Computers was founded By Mr. Ramalinga Raju who hailed form a traditional agriculture family of Andhra Pradesh, India in 1987 with a just 20 employees and converted the company got Public in 1992.The chairman of the company was the founder himself, Mr. Ramalinga Raju (Alias Raju) until...
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...approach in which moral values are related to human conduct, with respect to the rightness and wrongness of certain actions. This definition explains that ethics are a nothing more than an indoctrinated human behavior that is base on their environmental, social, or cultural backgrounds. Humans are therefore, inherently flawed and thus, ethics becomes a huge issue in their lives as they attempt to make up for these flaws. How humans act in a given situation or how they feel about their actions, play into how they conduct themselves in their personal and business affairs. Killing, raping, and stealing are examples of such obvious actions that most people would agree are unethical. This relates to the subjective belief of rather Bernard Lawrence "Bernie" Madoff should remain in prison or out on bail because of the practicing of Ponzi schemes because it lies in the not so obvious realm of behavior. Why? There is no essential difference between someone who steals $5 and someone who steals billions it is all the same, however, in the criminal justice system the belief in crimes at different levels are arranged at different social and cultural standards. White collar vs. blue collar White collar crime is particularly interesting it provides a sharp contrast to the common crimes and street criminals that usually attract the attention of people. A white-collar is associated by individual of a higher social class. Some of the crime can be characterized as any antitrust violations, computer...
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...representation of the people, monopolizing the form of politics. The U.S. Constitution is clear about its political system, which is based on the representation and not in citizen participation. The important decisions are made by a very small group of people who are not accountable for what they do, so the people cannot do anything at the end against them as we are going to explain in this paper work. If we analyze the case of Wall Street in 2009 we realize that society has no way to reclaim their “Representatives" by act or omission errors they have committed. Nothing could be done to prevent the disgraced tycoon Bernard Lawrence "Bernie" Madoff through his investment firm that bears his name, swindled the American people the amount of US$ 50,000 million dollars. There was no law to protect the common citizen desires of unscrupulous businessmen on Wall Street. And though Madoff was sentenced to 150 years in prison, that did not stop many people from commiting suicide for having lost their life savings. Where were our "Representatives" to anticipate these manipulations of the financial system of Wall Street at the expense of the people? What kind of sanctions were imposed on our "Representatives" for not doing the job of protecting our interests? Another aspect to review of Representative Democracy is...
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...Principles of Managerial Finance The Prentice Hall Series in Finance Adelman/Marks Entrepreneurial Finance Andersen Global Derivatives: A Strategic Risk Management Perspective Bekaert/Hodrick International Financial Management Berk/DeMarzo Corporate Finance* Berk/DeMarzo Corporate Finance: The Core* Berk/DeMarzo/Harford Fundamentals of Corporate Finance* Boakes Reading and Understanding the Financial Times Brooks Financial Management: Core Concepts* Copeland/Weston/Shastri Financial Theory and Corporate Policy Dorfman/Cather Introduction to Risk Management and Insurance Eiteman/Stonehill/Moffett Multinational Business Finance Fabozzi Bond Markets: Analysis and Strategies Fabozzi/Modigliani Capital Markets: Institutions and Instruments Fabozzi/Modigliani/Jones/Ferri Foundations of Financial Markets and Institutions Finkler Financial Management for Public, Health, and Not-for-Profit Organizations Frasca Personal Finance Gitman/Joehnk/Smart Fundamentals of Investing* Gitman/Zutter Principles of Managerial Finance* * denotes Gitman/Zutter Principles of Managerial Finance— Brief Edition* Goldsmith Consumer Economics: Issues and Behaviors Haugen The Inefficient Stock Market: What Pays Off and Why Haugen The New Finance: Overreaction, Complexity, and Uniqueness Holden Excel Modeling and Estimation in Corporate Finance Holden Excel Modeling and Estimation in Investments Hughes/MacDonald International Banking:...
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...Principles of Managerial Finance The Prentice Hall Series in Finance Adelman/Marks Entrepreneurial Finance Andersen Global Derivatives: A Strategic Risk Management Perspective Bekaert/Hodrick International Financial Management Berk/DeMarzo Corporate Finance* Berk/DeMarzo Corporate Finance: The Core* Berk/DeMarzo/Harford Fundamentals of Corporate Finance* Boakes Reading and Understanding the Financial Times Brooks Financial Management: Core Concepts* Copeland/Weston/Shastri Financial Theory and Corporate Policy Dorfman/Cather Introduction to Risk Management and Insurance Eiteman/Stonehill/Moffett Multinational Business Finance Fabozzi Bond Markets: Analysis and Strategies Fabozzi/Modigliani Capital Markets: Institutions and Instruments Fabozzi/Modigliani/Jones/Ferri Foundations of Financial Markets and Institutions Finkler Financial Management for Public, Health, and Not-for-Profit Organizations Frasca Personal Finance Gitman/Joehnk/Smart Fundamentals of Investing* Gitman/Zutter Principles of Managerial Finance* * denotes Gitman/Zutter Principles of Managerial Finance— Brief Edition* Goldsmith Consumer Economics: Issues and Behaviors Haugen The Inefficient Stock Market: What Pays Off and Why Haugen The New Finance: Overreaction, Complexity, and Uniqueness Holden Excel Modeling and Estimation in Corporate Finance Holden Excel Modeling and Estimation in Investments Hughes/MacDonald International Banking:...
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