Bernie Madoff By Michael Dickson 1/24/2009 In our countries history there have been many people that have done a lot of unethical things when it comes to finances. Back in 1920 a man named Charles Ponzi began advertising that he could make a 50% return for investors in only 45 days. Many people believed in this and began to mortgageoff their homes and all of their lives savings. As all of the information became public that he had a criminal history people began to question his judgment. All of them were correct and he was indicted on 86 counts of fraud and tens of millions of dollars were gone.
After this happened anyone caught swindling money from incent investors would be know as to have pulled a Ponzi scam. No one our nation has every beaten what Charles Ponzi until 2008. Bernie Madoff has been charged and convictedof pulling off the largest financial scam every by taking over $50 billion over a course of decades from people that trusted him to invest and give large returns. But who is the man that earned this trust and where did he come from? Mr. Madoff had a business installing and fixing sprinklersystems but he saved money and with only $5,000 he joined the ranks of Wall Street in the late 1960’s.
With his very small firm he got his start by matching buyers of inexpensive “penny stocks” with sellers in the growing market. But in the late 1970’s his firms and those like his got the opportunity to start trading prestigious blue-chip stocks and the rest became history. He started cultivating key relationships with regulators which in turn gave him the upper hand when it came to staying under the radar of the S. E. C. When he worked hard to adopt new trading technologies in the 1990’s he became the head of NASDAQ. Mr.
Madoff had an attitude of using the mantra of “kiss” when it came to his employees and wanted everything completely organized and always looking like a top notch operation. So with all of this prestigewhat happed with him to just knowingly take money from everyone who trusted him? Where did it all go completely wrong for him and what got him caught? One of the main issues that can come from this case is who Mr. Madoff did not use the main forms of Business Ethics. With the power of trust that he has, not only over his employees but from investors all around the world. To try nd just choose one ethical thing that he did is almost impossible because there are so many available, but one area that stands out is the deception that he brought to so many people. He did not discriminate with one type of investor or financial group. He had everyone from multi-millionaires to complete towns and even the little people that wanted to be able to just retire comfortably. When he chooses to take investments he didn’t care where they came from and who it hurt. When you look at the overall outcome of all of this, there is not just who lost everything but also the employees that worked for him.
They toowere investing in the company with their own paychecks. Mr. Madoff was allowing management to buy into what he was selling and when it was all over they lost what they thought was a good investment. The trust that he instillinginto all of them was the same that he put into those outside of the walls of his high dollar offices. The internal stakeholders not only looked up to him but trusted every word that came out of his mouth. One of his employees stated that “He appeared to believe n family, loyalty and honesty.
Never in your wildest imagination would you think he was a fraudster” (nytimes. com) this shows the type of scammer he was and could not even live up to the very traits he was putting out to everyone around him. From an outside look there are so many people that have lost everything they had. During the court hearings for him you can see and feel the effects on the external stakeholders just by listening. One of the people that lost everything spoke and said “that he should not be allowed to plea quality and should face a trial like everyone else” (abcnews. o. com) When you look at all of the ways things went wrong and what he decided to do with his life, finding alternatives is really simple. Just being a human being is one area to start and finish at. He still could have made billions of dollars just by doing the investments and taking his share in the profits he made for his clients. Just hiring good people to help him to watch the market and make the choices that would be in the best interest of his clients would in turn make him enough money to be very comfortable.
Many investment people have been caught red handed over the last few years for doing this same thing and it makes people scared to trust anyone with their money even the banks. If they would just follow the simple principle of would my grandmother be ashamed if she saw what I was doing, then everyone would be trustworthy. The affects that this has had on both internal and external stakeholder have lost everything. Employees have lost their jobs and life savings and everyone from the small town people to complete cities have lost everything they had for retirements.
There is not one person that Mr. Madoff has not hurt in the process. His family has well never mind his wife still has over $67 million left for her and their family so I guess not everyone lost in this case. When Enron happened you would have thought that it would have been harder for companies like Mr. Madoff to pull this kind of thing. Many people believe that our government is to lax on regulations and that the free market cannot manage itsself and when you hear about stories like this it does make you think long and hard about if they are correct.
But I do not believe that we need government to take over the market just to try and protect us from people like Mr. Madoff. We as a nation need to hold the companieswe work for and do business with more accountable for their actions. We have become a society that is tooscared to stand up for what we believe in for the chance that retaliation will happen. But to me that this what makes us better than the rest of the world because we can speak our minds and stand up for those that cannot defend themselves.
If we allow our government to try and fix this issue with more regulations well we know that never works because there is always s a loop hole to jump through and we see what a wonderful job they do with controlled spending and running efficiently so never mind about that. Just step back and always take a second look before you invest with someone and ask to see financial statements of years past and always ask questions first and invest second. References http://abcnews. go. com http://nytimes. com business ethics, Hartman and Desjardins