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    Iv. Statement of The Objective - Cabiles

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    Odessa Cabiles
    Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of $65 billion. Rather than investing funds as promised, Madoff deposited money into his own bank account and paid returns to investors from new investments. The SEC received multiple complaints about Madoff but failed to properly investigate, allowing the fraud to continue for over a decade. If the SEC had listened to warnings from whistleblower Harry Markopolis and fully investigated Madoff initially, both the $65 billion financial losses and immeasurable non-financial impacts could have been avoided. The SEC's failure to act promptly allowed Madoff's fraud to grow substantially larger and impact far more victims over time.

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    Iv. Statement of The Objective - Cabiles

    Uploaded by

    Odessa Cabiles
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    Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of $65 billion. Rather than investing funds as promised, Madoff deposited money into his own bank account and paid returns to investors from new investments. The SEC received multiple complaints about Madoff but failed to properly investigate, allowing the fraud to continue for over a decade. If the SEC had listened to warnings from whistleblower Harry Markopolis and fully investigated Madoff initially, both the $65 billion financial losses and immeasurable non-financial impacts could have been avoided. The SEC's failure to act promptly allowed Madoff's fraud to grow substantially larger and impact far more victims over time.

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    IV. STATEMENT OF THE OBJECTIVE_CABILES

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    Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of $65 billion. Rather than investing funds as promised, Madoff deposited money into his own bank account and paid returns to investors from new investments. The SEC received multiple complaints about Madoff but failed to properly investigate, allowing the fraud to continue for over a decade. If the SEC had listened to warnings from whistleblower Harry Markopolis and fully investigated Madoff initially, both the $65 billion financial losses and immeasurable non-financial impacts could have been avoided. The SEC's failure to act promptly allowed Madoff's fraud to grow substantially larger and impact far more victims over time.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    6 views3 pages

    Iv. Statement of The Objective - Cabiles

    Uploaded by

    Odessa Cabiles
    Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of $65 billion. Rather than investing funds as promised, Madoff deposited money into his own bank account and paid returns to investors from new investments. The SEC received multiple complaints about Madoff but failed to properly investigate, allowing the fraud to continue for over a decade. If the SEC had listened to warnings from whistleblower Harry Markopolis and fully investigated Madoff initially, both the $65 billion financial losses and immeasurable non-financial impacts could have been avoided. The SEC's failure to act promptly allowed Madoff's fraud to grow substantially larger and impact far more victims over time.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    I.

    TITLE OF THE CASE: (Base on our own perception)

    Uncovering Largest Ponzi Scheme in History: The Bernie Madoff story

    III. STATEMENT OF THE PROBLEM

    Bernie Madoff was an American financier and former Nasdaq chair who orchestrated the largest Ponzi
    scheme in history. Bernie promised investors high returns in exchange for their investments. However,
    rather than investing, he deposited their money into a bank account and paid, upon request, from
    existing and new investors' funds. During the 2008 recession, he could no longer accommodate
    redemption requests. His scheme came to an end after his sons turned him over to authorities. Bernie
    was convicted of fraud, money laundering, and other related crimes, for which he was sentenced to 150
    years in federal prison. Bernie Madoff died in prison on April 14, 2021, at the age of 82.

     Will Bernie Madoff be able to give back the money that he got from his investor?
     Where did all the money go after invested by the investor?
     Since Madoff died not fulfilling the 150 years of imprisonment, will he’s family be liable?

    IV. STATEMENT OF THE OBJECTIVE

    General Objective:

    The main objective of this study is to identify what are those elements that lead Madoff in
    persuading successfully some of the wealthiest investors from different sector and whether this investor
    will able to claim the amount of their investment. And to determine why the Securities and Exchange
    Commission unable to uncover this fraud.

    Likewise, this study aims at finding answers to the following specific objectives.

    Specific Objective:

     To investigate what are those elements that makes Madoff successful in terms of persuading
    investors from different sectors
     To assess the assurance of every investor in claiming back the amount of their investments
     To identify possible factors that hinders securities and exchange commission in uncovering
    the truth behind this fraud
    At the end of this case analysis the SEC would be able to find out …

    There are various ethical issues which arose during the Madoff investment scandal and which
    are contrary to ethical requirements of businesses. One of these issues is fraud. Businesses are
    not expected to engage in fraud since it is not only against business interests, but it is also
    illegal under law. When Madoff and his staff engaged in fraud, they broke the ethical
    responsibility towards organizational stakeholders and in addition, they committed a crime. This
    led to his jail sentence of over 100 years. The second ethical issue which arises when analyzing
    the Madoff case is misrepresentation. Firms are required to follow the ethical responsibility of
    full disclosure to all organizational stakeholders. Misrepresentation is not only a breach of
    ethical requirements but it is also a crime. Madoff misrepresented the state of his firm’s finances
    and a false belief that it was making profits. This is what attracted the thousands of investors to
    Madoff Investments. Misrepresentation also enabled Madoff escape detection from financial
    regulators although there was suspicion on his illegal practices. The third ethical issue which
    arises from the case study is money laundering. This is the use of a legal source of revenue to
    hide illegal sources of revenue or revenues which have not been declared or taxed by the
    government. This is an unethical practice which is a crime and is punishable by many years in
    jail. Madoff used his investment firm as a front to hide the revenues which were received
    through the Ponzi scheme. The investment firm was used to portray the business activities are
    legal and to hide the true sources of revenue. Money laundering is a crime which Madoff was
    charged with and it contributed to his long jail sentence.

    Probable SEC role to avoid (reduce or


    eliminate) financial and nonfinancial losses
    Truly speaking, there was no actual investment in securities market and customer funds
    were never exposed to the uncertainties of price fluctuation, and account statements
    bore no relation to the United States securities market at any time. Bernie Madoff’s
    fraud resulted $65 billion financial loss which definitely paid for the perpetrators, their
    families, and their friends as well as a lot of people got rich during his long-running
    scam. Pension funds, retirement accounts, and children’s trust funds were worthless
    because of this scam. Philanthropic organizations had to cancel millions of dollars in
    promised or ongoing donations (Collins, n.d.). Many employees lost their jobs and trust
    of millions broken. It is also a fact that Madoff ended up in prison. In this context, if the
    Securities and Exchange Commission (SEC) had listened and taken necessary actions
    both financial and nonfinancial losses could have been avoided (reduced or eliminated,
    but the understaffed and underfunded SEC, which received a record 13,599 complaints
    in 2000, decided not to initiate an investigation of his complaint (Collins, n.d.).
    Markopolos explained his analysis presented in the 2000 complaint at a meeting at the
    SEC’s Boston office and encouraged the SEC to investigate Madoff. After the meeting,
    both Markopolos and an SEC staff accountant testified that it was clear that the SEC’s
    Boston District Office – BOD’s Assistant District Administrator did not understand the
    information presented. Our investigation found that this was likely the reason that the
    BDO decided not to pursue Markopolos’ complaint or even refer it to the SEC’s
    Northeast Regional Office (NERO) (Kotz, 2009). The other interesting part is most of
    SEC investigations, the company sent junior agents to corroborate Madoff’s earnings
    and verify the legitimacy of his operations (Howell, 2017) and senior officials at the SEC
    did not directly attempt to influence examinations or investigations of Madoff or the
    Madoff firm, nor was there evidence any senior SEC official interfered with the staffs’
    ability to perform its work. This shows SEC did not play any role to uncover Bernard
    Madoff’s Ponzi Scheme. If SEC had listened to Harry Markopolis the first time he
    informed them of his suspicions. The activities of Madoff would stop and what he did
    over a period of four years, like he deposited $21 million in Ruth’s account to pay for her
    Paris shopping sprees and a $2.8 million yacht. Bernie’s brother, Peter, purchased an
    expensive weekend home in the Hamptons for his daughter, and Bernie’s sons acquired
    a manufacturer of fly-fishing equipment, a sport they both enjoyed (Collins, n.d.), would
    never happened and the investors would never lose their future.

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