Ethical Issues Involved In Bernard Madoff's Case

The fraud that Bernard Madoff committed was discovered in December 2009, which was based upon a Ponzi scheme. He did so by taking money from new investors to pay earnings to old customers. The higher the number of his clients who wanted to withdraw of retire their investment, the more revenue he would need. Ponzi scheme is named after Charles Ponzi whose crime was discovered in July of 1920 by the Boston Post. Madoff started in the investment business legally by buying and selling stocks that were not listed on the New York Stock Exchange. He started by himself in 1960 and was a “wholesaler” between institutional investors. In his early days, he works with investment firms such as A.D. Edwards, Charles Schwab amongst others and his profit was the difference between the offer price and the sale price of the stocks. His competitive advantage came from working with his brother Peter who was the first of his family members to join Madoff’s business. Peter developed amazing technology for trading, buying and selling stocks at the best prices. Madoff’s profits at the beginning were not based on fraud. Meanwhile, Madoff also serves as Chairman of Nasdaq in 1990, 1991, and 1992. Due to his reputation at Nasdaq, he was attracting billions of dollars from investors. …show more content…
This is a white-collar crime. Madoff started by manipulating his cash flow stream to make his company seem more valuable that it actually was. Secondly, his company’s financial records were never made public and it was never questioned. Thirdly, he lied to the investors and told them that their savings were in safe hands and that they would receive high returns. Lastly, the ethical issue of bribery would have been involved for the other participants in the Ponzi scheme such as the ones auditing his company, the SEC, and his