Bernie Madoff Case Summary

Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.”

Bernie Madoff was one of the most prolific Ponzi-scheme artists in history. Madoff schemes netted him millions of dollars. Mr. Madoff used his BMIS Bernard L. Madoff Investment Securities a New York Limited Liability company, to commit fraud, money laundering, and perjury. This is just a few things that Mr. Bernard Madoff has done to many innocent investors, who believed in Mr. Madoff, and everything he stated. Due to Mr. Madoff’s action he has changed so many people’s lives. Some have lost everything, some committed suicide, and others just humiliated by Mr. Madoff. This paper is to tell you about Mr.

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.

Ethics, ethical values, and social responsibility should all work in unison in a corporate business structure. These key traits are better defined as maintaining overall good business morals, obtaining employees who possess personal ethical values, and finally to behave ethically and with sensitivity toward social, cultural, economic and environmental issues. For a business to better ensure these quality business traits a code of ethics should be adopted by the business. In the cases of Bernie Madoff and Enron, the most well-known financial scandals in history, I feel, gave a major hand in pushing business all across America to have and enforce the code of ethics.

Bernie intently accepted large sums of funds from investors with the knowledge that he was not going to make legitimate investments with his the stackholders money. Bernie Madoff’s was conducting his business practices off of maximizing profits for himself over twenty years, which he intentialy defrauded his clients of almost sixty-five billion dollars. It is in my opinion that Bernie Madoff’s apparently knew what he was doing when he was engaging in un-ethical practices. When Madoff pled guilty to all charges in March 2009, which includes securities fraud, mail fraud, false statements, false filings with the SEC, investment advisor fraud, wire fraud, money laundering, and theft from an employee benefit plan, I believe that he completely understood that his scam would be exposed at some time.

Bernard L. Madoff was the perpetrator of Ponzi scheme, and he was finally arrested in December 2008. MLSMK Investment Company (MLSMK) is a Florida partnership, which invested $12.8 million in Madoff's investment company between October and December 2008. On April 23, 2009, MLSMK filed a complaint in the District Court for asserting five claims against JP Morgan Chase & Co. (JPMC) and JP Morgan Chase Bank (Chase Bank). They were accused to conspired with Madoff to trick the victims. Facts Bernard L. Madoff Investment Securities (BMIS) provided market-making services, investment-advisory services, and proprietary trading for clients.

Bernie Madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the New York Stock Exchange (NYSE). From the 1960’s through the 1990’s, Madoff’s success and business grew substantially, mainly from a closed circle of known investors and friends through word of mouth. In the 1990’s Bernard L. Madoff Investment Securities traded up to 10 percent of the NASDAQ on any given day. With the success of the securities business, Madoff started an illegal money-management business, promising his investors consistent returns from 10-12 percent, unheard of returns at the time, which should have tipped off most investors that something was amiss.

Bernard L. Madoff Investment Securities LLC operates as a securities broker/dealer in the United States and internationally. It provides executions for broker-dealers, banks, and financial institutions. The company was founded in 1960 and is headquartered in New York, New York. As of December 15, 2008, Bernard L. Madoff Investment Securities LLC is in liquidation.

David Friehling and his firm Friehling & Horowitz (F&H), a small accounting firm located in New City New York, issued an on Bernard L. Madoff Investment Securities LLC’s (BMIS) books from 1991-2008. Located in New York City, BMIS registered with the Commission as a broker dealer and as an investment adviser. Its three operations provided investment adviser services, market making services, and proprietary trading. In December 2008, it was revealed that Madoff’s BMIS firm was a massive Ponzi scheme that defrauded thousands of investors of billions of dollars. During this Ponzi scheme, as stated in the complaint-Sec vs. David G. Friehling & Horowitz, CPA’s, P.e., David Friehling enabled Madoff throughout the “process by falsely representing

One of the most famous quotes made by a white collar criminal in the midst of their downfall says, “Today, basically, on Wall Street, the big money is made by taking risks” (Top 9). The quote comes directly from historic Ponzi schemer himself, Bernie Madoff. Bernie Madoff, an infamous fraudster is well known for his astonishing $65 billion scam. Madoff, who is notoriously recognized by thousands of individuals makes for an attention-grabbing white collar criminal investigation. The shocking and unusual outcome of his case creates a thought provoking and captivating report. Most importantly his victims, in the thousands, encompasses and affects a vast population of America. Regrettably, countless victims today are still fighting for restoration, all while struggling to overcome from their losses. Overall, the scandalous Bernie Madoff case, damage/losses, outcome, and finally, the victims when combined creates an appealing white collar topic.

According to regulatory filings, in 2008, the Madoff firm had more than $17 billion in assets under management. He founded his frim in 1960. Also, the FBI and civil action brought by the Securities and Exchange Commission(SEC), Madoff estimate the loss his fraud exceeded $50 billion. The banks reported the losses. Moreover, wealthy investors and hedge funds climbed over the weekend for about $20 billion. Also, banks all over the world in the US, Britain, Spain, Italy, France, Japan and Switzerland reported for about billions of dollars. Madoff scandal has had its impact on the social layers testifies to the depth of the underlying crisis that produced it.

Operated through a complex, cryptic structure Bernie Madoff, CEO of Bernie L. Madoff Investment Securities (BMIS), perpetuated the most embellished Ponzi scheme the world has ever seen. The basis of the securities fraud that took place approximately between 1991 – 2008 was influenced by Bernie Madoff’s reliance upon an unqualified staff, outdated software, organizational seclusion, a personal halo effect, and weaknesses in the regulating body. Madoff had the confidence of the public, yet to pull off such an elaborate scheme, he relied on a startling number of family members, vital accomplices working on the illegal trading floor such as Frank D. Pascali, IT staff members, and a separate BMIS branch of international employees

Introduction: Bernie Madoff was a well-respected financier, his company Bernard L. Madoff Investment Securities, LLC was very well known and even helped launch the Nasdaq stock market. Madoffs company was well trusted and he even had celebrity cliental such a Steven Spielberg, Kevin bacon, and Kyra Sedgwick. Madoff came from a low income family however, he was able to start his company from getting a $50,000 loan from his in-laws and he using money that he had saved from side jobs such as lifeguarding and installing sprinkler systems to found his company. The successfulness of Madoff’s company came from the company’s ability to adapt to change and us modern day computer technology. As his business grew he stated employing family members to help “His younger brother, Peter, joined him in the business in 1970 and became the firm 's chief compliance officer. Later, Madoff 's sons, Andrew and Mark, also worked for the company as traders. Peter 's daughter, Shana, became a rules-compliance lawyer for the trading division of her uncle 's firm, and his son, Roger, joined the firm before his death in 2006”(Bernard Madoff Biography 2016) Unfortunately on December 11th 2008 Bernie Madoff became well known for a whole new reason. He had been accused of performing an elaborate Ponzi scheme and he had been reported to the federal authorities by his own sons. A year later he admitted to the investigators that he had lost $50 billion dollars of his investors’ money and pled guilty to 11

What is right or wrong? People base their values of right and wrong on what they have learned from their experiences (Ferrell, Fraedrich, & Ferrell, 2018). What one person sees as wrong, may be a normal for another. Most people are taught to work hard, save money, and invest for a future retirement. However, when it comes to money, some people lose all principles and standards of behavior. There were several ethical issues in the Madoff case. They include: stealing, cheating, lying, misrepresentation, and deliberate deception. Madoff used the Ponzi scheme or the money pyramid to make his money. In the Ponzi scheme, money was taken from new investors and given to existing customers as earning without being invested. Was this right or wrong? Throughout this case study ethical concerns can be seen on both sides, the investors and Madoff’s.

We chose Bernard Madoff’s case because we thought that we could relate his case to many unethical behaviors. The analysis can be made on decision making and lack of ethical training which we think is an important topic to focus on this course.