The blog this week will feature ethical issues in the financial industry. While major frauds have occurred in this industry, Bernie Madoff committed the greatest business fraud in history when he stole over 50 billion dollars from investors. While some of you may not know about Ponzi schemes, Charles Ponzi created this term when he made millions of dollars off people investing all of their money and life savings. People think they are making money by investing it, but they are really losing most of their life savings. Madoff has created a completely new meaning to the Ponzi scheme.
To learn more about Ponzi schemes, you can visit http://www.sec.gov/answers/ponzi.htm#PonziName
Bernie Madoff worked under the company called Bernard L. Madoff Investment Securities LLC. He would ask people to invest their money, and it actually seemed like the people were making returns. As all of their life savings would go into this business, Madoff would pay people the returns from money he made off new clients’ investments. Madoff was not actually making money for these people but creating a huge scandal throughout the industry.
This is an example of how greed took over and how any ethical reasoning did not occur. It is truly astonishing that Madoff was able to get away with taking billions of dollars from people. People trusted Madoff, and he seemed to have credentials that helped him go far in the fraud. It is important for people to realize that when making wrong ethical decisions, there are usually consequences. With billions of dollars invested into the fraud, it is surprising that Madoff was able to keep the fraud going on for so long. Please leave your thoughts about this case. I look forward to hearing feelings on this scandal.
To read more about the Madoff scandal, visit http://www.forbes.com/2008/12/12/madoff-ponzi-hedge-pf-ii-in_rl_1212croesus_inl.html