Ponzi Scheme: Bernie Madoff Scandal

1200 Words 5 Pages
Ponzi Scheme; the act of taking money from one person as an investment, then taking money from another, only to give a portion of the second persons money to the first investor as a supposed return on their previous investments. The notorious Bernie Madoff used this simple concept to essentially steal billions of dollars from people all around the world. In 1960 Madoff founded the investment firm Bernie L. Madoff Investment Securities LLC, and he sat as chairman of the company for the entirety of his career before his arrest. At the time of his arrest, he claimed the firm had liabilities of 50 billion. However, based on the amount in the accounts of Madoff’s 4800 clients as of November 30, 2008 it was estimated that the size of the fraud was roughly 64.8 billion. Bernie was without a doubt, the greatest con man to have ever lived. He offered very modest, yet alarmingly consistent returns to only the most exclusive of clients. He created an allure to his name by stirring the desires of his potential investors, essentially, by frequently using the most powerful word in the English dictionary. No. He would only take the most pristine clientele; if George Clooney walked up to him and asked him to take his money to invest, he probably would’ve made up some bullshit excuse for being unable to accept it at that …show more content…
Most Ponzi Schemes return around 20% or more to their investors. For that reason being, they tend to collapse very quickly because that number is just too good to be true. Madoff understood that he needed to return just above the norm, while never exceeding to a point of raising concern. Madoff was making everybody money. Who is going to sound the alarm when he is putting money in every single one of his client’s pockets, consistently, year after year after year? With no unhappy customers, and every other portfolio management firm being too distracted by curiosity and envy he was doing just

Related Documents

Related Topics