Red Flags: Bernard L. Madoff's Polonzi Scheme

Red Flags: Madoff’s ponzi scheme lasted from 1991 to 2008. During that time period, there were several red flags that showed that Bernard L. Madoff Investment Securities LLC was involved unethical behaviours. Whistleblower Harry Markopolos attempted to prove that Madoff Securities was involved in fraud from the late 1990s to Madoff’s arrest in 2008. Markopolos approached well-known economists, market analysts and the Security Exchange Commission multiple times in order to incite an open investigation against Madoff’s firm. Each time he confronted the Security Exchange Commission, news outlets, or people on Wall Street, they would deny his claims and refuse to look into the issues. After Madoff’s arrest in 2008 at the hands of his sons, Markopolos published a book titled No One Would Listen: A True Financial Thriller to reveal the obvious red flags in the ponzi scheme and the failures of the Security Exchange Commission to regulate the securities firm. The red flags include split-strike conversion, market timing, the firm giving up profits, performance line, and secrecy. Split-strike conversion involves purchasing stocks that mimicked …show more content…
Madoff Investment Securities LLC. Madoff told his clientele that if they spoke about their investment with his firm, he would return their money immediately with no opportunity to reinvest in the firm again. Dealing with Madoff was like a two sided coin; there was promise of modest returns at the expense of absolute silence. Investors have the right to know about where their money is going and to some extent what a corporation is going to do with the investment. This would explain one of the most suspicious details with the “Bernie” Madoff Scandal, no big time investor or Fortune 500 company had investments in Bernard L. Madoff Investment Securities LLC and refused to mention their reasoning as to