Bernard Lawrence Madoff: Con Man

Bernie Madoff continued his scheme for thirty years because his company was the largest market maker on NASDAQ. He had an impressive rate of returns that his firm earned annually, and the Securities and Exchange Commission did not oversee the stock market and protect investors. Madoff also had flawless credentials. His scheme was so clever that he knew he could only aim toward the investors

In December 2008, one of the largest Ponzi scheme surfaced when Mark and Andrew Madoff reported the works of their father, Bernard Madoff to the federal authorities. A Ponzi scheme is an investing scam that promises high rates of return with little risk to investors. The operator generates returns for older investors by gaining new investors. Bernard was arrested on December 11, 2008 and charged with securities fraud. He pled guilty to 11 counts and was sentenced to 150 years in federal prison-the maximum possible prison sentence. A reported $17.3 billion was invested into the scam by Bernie’s clients and only about $2.48 billion have been returned to these victims as of September 2012.

After Bernard Madoff, a former NASDAQ chairman, was arrested on December 11, 2008, he acknowledged that his performance was nothing but the Ponzi scheme. He pled guilty to the biggest investor fraud ever committed by anyone on March 12, 2009. On June 29, 2009, he was sentenced to 150 years in prison.

From about 1960 to the 1990’s, Madoff’s business grew like crazy, mainly from some well-known investors and friends. Because of all this Bernie became very successful very fast. This caused him to start getting greedy. In the 1990’s Bernard L. Madoff Investment Securities began conducting illegal acts of fraud, Madoff started an illegal money-management business, promising his investors consistent returns. Investors were so interested in the high returns, that no one questioned Madoff or his strategy. In 2008, investors began requesting payouts for their investments and Madoff started to become very desperate for new funds. His strategy began to unravel and the truth of his actions started to come out, shocking many people. This case blew up like crazy and once investigators started looking into Madoff’s business they discovered all Madoff was doing was running a Ponzi scheme. He would take funds from new investors, and use that to pay off the older investors. While doing this Bernie was also pocketing a large portion of the money, causing this to be one of the biggest Ponzi schemes in

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 the 1960s Bernie Madoff was hard worker known for creating one of the largest buying/selling market in NASDAQ. He rose from a penny stock trader to becoming a stockbroker, financial advisor, then chairman of the NADDAQ. But, from December 11, 2008 to present day, Bernie Madoff will be remember in history as the man who pull of the largest Ponzi scheme. Madoff was to make $50 billion disappear in this scheme, by using new investors’ money to pay out old investors. After numerous tips about how Madoff conducted business the Securities and Exchange Commission (SEC) chose to investigate. The SECs investigation included searching through fabricated trading records of which no evidence was found to support the claim. It wasn’t until another

No one has been able to prove when Madoff began his scheme. Madoff himself has made contradictory claims about when the crime began. Madoff told CNNMoney that it all started in 1987, but he later said the scheme began in 1992 (Smith, 2013). Bernard L. Madoff Investment Securities LLC by 1989 handled 5 percent of the trade volume on the New York stock exchange (DuBois, 2009). In may 2000 Massachusetts financial analyst Harry Markopolo’s

In, 1960, he decided to open up his own investment firm, Bernard L. Madoff Investment and Securities LLC. He borrowed $50,000 from his in-laws to start the company and ran the company in his father-in-law’s accounting office. (Kennedy, Adrienne A. Salem Press Biographical Encyclopedia, January, 2016). The company started out involved in penny socks. Penny stocks are low priced shares over the counter (OTC) that have a high risk. An over the counter market involves dealers who are geographically spread out, and are linked only by telephones and computers (Nasdaq.com, National of securities dealers automatic quotation system). The company rapidly expanded and became a leader in computer information technology. This lead to the creation of the National Association of Securities Dealers Automated Quotation System (Nasdaq system). According to, Nasdaq.com, The Nasdaq System, is an electronic system that makes price quotations about stock issues in the OTC market available.

This paper introduces Bernard L. Madoff a fraudster who orchestrated a multi-billion dollar Ponzi scheme. The paper discusses elements that make up a Ponzi scheme and explains what a Ponzi scheme is. The paper goes on to introduce some of the victim’s and examines some reasons why someone might fall victim to a Ponzi scheme. The paper describes the three elements making up the fraud triangle and how they relate to the fraud and the fraudster. This paper covers Bernard Madoff’s background and history and how he committed the fraud analyzing the fraud triangle. The paper describes ways to correct the issue, accounting principles violated, and recommendations for a fix. Finally, the paper looks at internal and external controls violated and ends with a conclusion.

Bernie Madoff, son of Ralph and Sylvia Madoff, grew up in a modest three-bedroom home in Laurelton, a small middle class area outside of Queens, New York. Little is known about Bernie’s parents, except each had one or more issues with the government. Ralph, had a tax debt in excess of $13,000, placing a lien on his home, assessed in 1956 and not paid until 1965. Sylvia was part of Securities and Exchange Commission (SEC) proceedings in 1963 to determine if broker-dealers of Gibralter Securities failed to report financial conditions, which could revoke their registrations. However, in 1964, the SEC dismissed the proceedings with what appeared to be a deal for these identified individuals to stay out of the business.

The idea is to lure investors with the false implication of higher returns than what they originally invested, and higher returns than their competition, and usually 50 percent of their investment returned to them within 90 days. According to Robert Palestini’s book, Leadership with a Conscience: Educational Leadership as a Moral Science, Bernie Madoff is considered a “Structural Frame Leader”, as well as a “Political Frame Leader”. Bernie was a businessman, and like most great business men, he was always looking for a way to cut corners, and become more technologically and strategically advanced than his competition. To do so, he created what was called the “third market”, which traded outside the lines of the New York Stock Exchange, and the American Stock Exchange. This “third market” allowed Madoff to execute over a million trades of shares a day. His drive to want to advance the systems and reap a higher return, in a shorter amount of time, displays how Bernie Madoff was a Structural Frame Leader. He also pursued computerized trading, which relieved a lot of time and effort from his firm, and was eventually adopted by NASDAQ(National Association of Securities Dealers Automated Quotations exchange). Also, by co-founding the ITS (Intermarket Trading system), Madoff helped improve the stock market world, once again displaying his Structural Framing

A Ponzi scheme can be distinguished as “a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victims into much bigger risks (Unabridged, 2016).” Madoff kept all extra money to expand his business and pay his employees, most of which were his family. The fact that Madoff engaged in a Ponzi scheme ultimately lead to his personal and professional demise. Madoff ended up in jail and his once prestigious company shut

A Ponzi scheme is an illegal business practice in which new investor’s money is used to make payments to earlier investors. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity. The returns are repaid out of new investors’ principal, but not from profits. This can continue as long as new investors line up with cash, and old investors don’t try to withdraw too much of their money at once.

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

On Dec. 11, 2008, Bernard Lawrence Madoff confessed that his vaunted investment business was all "one big lie," a Ponzi scheme colossal in volume and scope that cost investors $65 billion. Overnight, Madoff became the new poster child for Wall Street gall, greed and