Sep
15
Longest Running Fraud Exposed
Posted by: David Tran | September 15, 2011 | 3 Comments
A fraudulent scam that originated in 1920, the Ponzi scheme made headlines in recent times due to the notoriety of Bernard Madoff’s crimes; with over $50 billion lost, it is the largest fraud in history. Madoff, once a trusted and valued member of Wall Street’s exclusive society, left thousands ruined as the wealthy and famous to small time investors entrusted their life savings into Bernard L. Madoff Investment Securities LLC. ‘Money was moved between accounts, false trading confirmations were sent to his clients, and he lied to the Securities & Exchange Commission.’ Madoff stated, “Clients would have no way of knowing the statements were false.”
One has to question the actions of Bernard Madoff, once held in high regard within the financial community. The ethical issues of deceit, negligence, and betrayal of trust can be applied as Madoff took into account his own self interest and cheated the individuals, banks, and institutions that depended on his practice. Using his reputation and credibility, he took advantage of his clients by stealing their fortunes and concealing the truth.
Comments
3 Comments so far
hey this is li from T11 group 16. we should seat together next class as a group?
Hey, yeah for next class all of us in group 16 will be sitting together!
David, this is a very good thing to point out to. It shows us how money can turn people bad. Ethic is not only important on a personal degree, but also important in the business world too. As you mentioned Mr. Madoff was a very “valued member of Wall Street”. He was one of the co-founders and chairman of NASDAQ. But on November 2009 at the Sheraton New York Hotel there was an auction held. Items included a Rolex Oyster Perpetual Submariner watch, Dunhill Cigar cutter, some 1 ounce gold Krugerand coins and many other things. These all belonged to Mr. Madoff, but were auctioned off as they were ceased by the government as a consequence of Madoff’s “rrobbing Paul to pay Peter” Ponzi scheme. This also gives people a warning bell that business is not just about making money and business schools should emphasize more on ethics and social responsibilities. Maybe this is part of the reason why we were asked to research on an ethical problem in the contemporary business world.