Bernard Lawrence "Bernie" Madoff
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 March 2009, Madoff pleaded responsible to 11 federal crimes and confessed to turning his wealth management business into a massive Ponzi scheme that cheated thousands of investors of billions of dollars. Madoff said he started the Ponzi plan in the early 1990s. However, the federal investigators believe that the fraud began as early a 1970s and speculation process may never have been lawful. Investigators found out that there were others individuals occupied in the ...view middle of the document...
U.S. Bankruptcy Court in Manhattan gave out a 162-page customer list with at least 13,500 diverse accounts, but without listing the quantities spent. Clients incorporated banks, hedge funds, charities, universities, and wealthy individuals who have revealed about $41 billion devoted with Bernard L. Madoff Investment Securities LLC.
3. Describe three business safeguards (risk management) that may have prevented the harm caused by Mr. Madoff.
As per our text, “The Safeguard Rule requires financial services firms to promulgate a written information security plan; designate at least one employee to coordinate the plan; identify and assess the risks to customer financial information, and evaluate the safeguards for controlling these risks. According to the FTC, its ultimate goal is to promote awareness among companies about the importance of protecting sensitive information; while allowing the companies to tailor a plan based on their size, scope, and level of sensitive information”. (Bagley & Savage 2010).
4. Describe three ways private investors might have better protected themselves from risk.
One obvious way to tell is by looking at their Lack of Transparency; the second one would be their unrealistic performance because Madoff was offering very highly returns than the average. He offered more than three times the index; thirdly, keeping track of...