Bernie Madoff Case Study Essay example

1434 Words Mar 24th, 2013 6 Pages
Bernie Madoff Case Study

Tanya Seyfried
GFN61090033-ACFA12
January 19, 2013 Bernie Madoff was a successful gentleman whose financial career spanned almost 50 years. Some of his achievements include serving as the chairman of the board of the NASDAQ stock exchange; a member of the Board of Directors on the Security Industry Association; and a former National Treasurer of the American Jewish Congress. (Hirt, Block, Danielsen 2011) His greatest achievement was starting and being the chairman of Bernard L. Madoff Investment Securities LLC in 1960. His investment group gave him wealth and notoriety among the financial elite of New York City and around the entire country. Many trusted him and accepted his
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Mark Williams, a professor at Boston University, stated in a Reuters article in 2009 that “With Congress now probing the Bernard Madoff case, some claim the SEC missed the risk because of under staffing. Even if that’s an issue, one SEC enforcement officer using basic risk-management skills, asking probing questions, searching for clear answers and exercising timely follow up could have helped in detecting this fraud before it grew to such a staggering size”. If an undersized staff was a concern, then why didn’t the SEC add more investigators to this case? In investigation reports following the scandal, it was unveiled that the SEC “red tape” of proper paperwork could have caused the delay in the initial investigation. Tips would come via phone calls, e-mails, faxes, and even handwritten letters into the SEC's 11 regional offices and Washington, D.C., headquarters. (Lynch, Goldstein 2011) Before the Madoff case, the SEC's Los Angeles office might receive a written complaint about a bad broker, for instance, and stuff the letter into a filing cabinet if it was deemed without merit. (Lynch, Goldstein 2011) If, however, a complaint about the same broker was later sent to the SEC's Chicago office, staff there would have no easy way of knowing about the earlier tip. (Lynch, Goldstein 2011) The thought behind this procedure could be considered thorough, although with information coming

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