Bernie Madoff

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The Bernie Madoff Case Study 1. List the Facts • On December 11, 2008 Bernard Lawrence “Bernie” Madoff was arrested for the largest stock fraud in history. This included charges of securities fraud, investment advisor fraud, mail fraud, wire fraud, money laundering, false statements, perjury, making false filings with the SEC, theft from an employee benefit plan, and gross negligence. He was charged with 150 years of imprisonment and forfeiture of $17.179 billion dollars. • Although he worked in accounting and as a market-maker (wholesale), where he matched buyers of stock with sellers on Wall Street, he had a side business where he acted as an investment advisor but he wasn’t registered as one. • Madoff would pay clients like Fidelity…show more content…
In 2006, the SEC launched a two-year investigation but Madoff was ultimately cleared. • In 2007, when the market collapsed because of the subprime mortgage crisis, hedge funds stopped allowing clients to withdraw money because it was too much too fast and some simply shut down. Yet, Madoff was still making money despite the economic down fall of the stock market. Eventually, he also began getting more withdrawal requests than deposits. • In 2009, after Madoff was arrested, the SEC faced the Financial Service Committee who labeled them inept and incompetent for not discovering Madoff’s scheme, especially because of the help of Markopolos. The SEC claims that they were unable to get Madoff pending an ongoing investigation, but Frontline sources relayed that they were understaffed and had been for years and didn’t have the ability to investigate properly and were getting overwhelmed. 2. Make inferences about the…show more content…
All factions of the business would be under the same roof. There would’ve been inconsistencies and fluctuations in returns and there wasn’t. At some times during the course of his career, there would’ve been some major losses and wins but business would’ve been trustworthy and legit. Corporate ties wouldn’t have been so secretive and discretion wouldn’t have been Madoff’s strong arm as a business tactic. His distance would’ve been closer and it wouldn’t appear that he didn’t want to associate with his clients. Assuming that he was practicing lawfully, he wouldn’t have been so involved with so many SEC cases and whistleblowers like Markopolos wouldn’t have posed as a threat to him because they wouldn’t have had anything to write about. Avellino and Bienes would’ve been licensed investment brokers and Madoff would’ve had them complete that before they began working for him. They would’ve still been operating today and there wouldn’t have been any resentment between them today. The SEC should’ve caught Madoff or at least had a pending investigation and monitored his business practices since the Avellino and Bienes case

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