Running head: BERNARD LA WRENCE "BERNIE" MADOFF
BERNARD LA WERENCE "BERNIE" MADOFF Naamah Pagan Augustine Weekley Business Law 1 August 21,2011
BERNARD LA WRENCE "BERNIE" MADOFF
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.
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"(Steel) The last illegal behavior that I would like to mention is perjury. Perjury is the "willful and corrupt taking of the false oath; that is sometimes called lying under oath; that is deliberately telling a lie in a courtroom proceeding after having taken an oath to tell the truth."(Free Advice) As far as fraud Madoff was the person who made deceitful pretenses, created a sham of an appearance, and gained an unfair dishonest advantage in his firm with his investors and colleges. Madoff also concealed (laundered) millions of dollars both
internationally and nationally which assisted in his wealth. Then Madoff proceeded to lie in court (perjury) truly believing that what he did was justifiable, and that he is the victim and the one that is suffering. He b1ames everything on his client's greed. There was nothing ethical about his actions.
Name three types of parties who were impacted by the actions of Mr. Madoffand describe how they were impacted. The three parties that were impacted by Madoff s actions were his company/employees, his family and his clients. Once Madoff was arrested the employees at his company lost there innocence. The employees felt that nothing was safe anymore. One minute they were getting large
BERNARD LAWRENCE "BERNIE" MAD OFF
bonuses and extravagant gifts for Christmas to their boss being locked up for illegal behaviors. His family was affected due to the fact that upon Madoff's arrest his families' assets were temporarily frozen as well as three investment funds. Even though Madoff was insisting his family did not know what he was doing they were still thought to be guilty to everyone else. Madoff s father in laws loaned him $50,000 to start Bernard L Madoff Investment Securities. Many of his family members worked for him in key
positions that they were not qualified to hold. Madoff apparently ripped off everyone, retirees, celebrities and some of the riches people in America. There were a staggering number of billionaires and celebrities who
were caught up in what is believed to be a $50 billion Ponzi scheme. Several members of Forbes list of the 400 riches Americans were victims of Madoffs scam.
Describe three business safeguard 9risk managementO that may have prevented the harm caused by Mr. Madoff One of the safeguards that would have been good for Madoff s company would have been the concern of controlling person liability. Madoff had too many immediate
family members holding key positions in his company. No amount of company oversight could have been effective under these circumstances. There were no checks and balances
to make sure everything was being done legally. Having non family members in the key positions would have made it more difficult for Madoff to participate in illegal activities. Another safeguard would have been if the company employees, investors had practiced due diligence. clients and
Due diligence involves identifying and detailing with in a given...