Madoff’s scandal is one of the largest fraud scandal ever recorded in the world history especially during this time when the world is facing the greatest economic depression and recession. This may be regarded as one of the shocking event which has helped to shape the direction of the economy in the United states of America(Frank,Robert,2008) .The revelation comes as an ironic step since the ones who brew the whistle were his own sons who were also learning the business together with his father. Although the fraud occurred, there are a lot of controversies which currently surrounds this fraudster issue in the United States of America. Although Madoff got arrested so as to help recover the fraud money, this will prove to be having some negative effects especially to the markets of the United States of America respectively. The liquidatations may be facing the redemptions and this may serve as one of the negative effect as it will serve as the barrier of the stock exchange growth (Jagger, Suzy, 2008). This paper tries to bring out the general cause of the scandal which contributed to a lot of losses to the customers involved and the economy of the United States of America. At the same time this paper will try to analyze the consequences of this scandal in general to the future of the United States of America respectively.
The seventy year old Madoff‘s arrest has been considered by many as a move which is going to have an extraordinary impact in the financial industry especially the rendering security sector(Maier,Kate,2008). Moreover this will serve as the investigation tools towards those who are the non-transparent investors .This scandal is going to turn upside down the expectations of the fraudsters and at the same it will reveal the inner circles of other financial frauders in general. Most of the scandal was concerned with the issue whereby the brokers would introduce the customers to company ad then he would receive fees from the client.
For instance if Maddof was no to be discovered that he was learning such a fraud business and at the same time face the charges, then it is clear and evident that this Ponzi fraud ring scheme would not have been discovered at all.Mr Maddof had managed to operate this Ponzi scheme for a long time without being discovered hence bringing a lot of questions to the public in general. But in contrast Maddof had warned that it was not possible to have the returns of that business to the clients involved which has served as the major worrying signal (de la Merced, Michael, J, 2008).
Although the effect of the Maddof scandal was Marjory concentrated on the impact of the stock exchange, this will also have what may be generally called as the social imbalance in the society. For instance those who had initially trusted Maddof as their beneficiary had faced the major economic challenge in general. Most of the organizations had trusted Maddof as their basic financier especially the non-profit making organizations such as the Yeshiva University which had Maddof as its basic secret trader who helped to operate the colleges involved (Seal Mark, 2009). Moreover the Sterling Equities which was the investment company of the Wipon family, one of the richest family in the New York owning New York Mets base ball team had also invested in the Ascot company which was owned and learn by the Maddof family(Lambiet,2008). This company also went into a loss after the fraud scandal was discovered. On addition some other big companies had lost a lot of money which was unknown.
The Ascots Company was found to be operating in the unique manner whereby it is reported that this company had a lot of transactions which were carried in and out of the exchange market respectively. The Maddof may have been a model which signaled him on when the market was secure for him to sell and buy. It was approximated Madoff was one of the busiest and active proprietor among the security business men. Moreover his business returns would be regarded as one of the extra ordinary returns which have ever been recorded at the short span period which was witnessed in the Madoff case (Salkin, Alen, 2009). The extra ordinary returns made by Ascot company was the main driving factor which made the tax free institutions such as the religious institutions and hospitals to be attracted to the investment of Maddof.For instance if it is true that 459 billion was frauded. AS Madoff claimed then this may be regarded as one of the biggest frauding in the world history which follows the once Charles ponzi scandal who was an Italian investor who managed to con the customers their 50% of their returns in only 45 days (John, Carney, 2008).Madoff may be one amongst the investors to be jailed in 2008 economic recession and depression times which is quite ironic in nature.
It has been established that before the Madoff Scandal came along, their existed the Equity scandal which involved a public company whose shares were mismanaged in the New York Stock Exchange. During this time three auditors were imprisoned together with other high ranked executives (Lauria, Joe, 2009).
On reference to the historical developments in the life of Bernard madoff it can be established that many of the activities which were as a result of this fraud were generally engineered by the government and thus much should not be blamed on Madoff.Madoff had served in several high ranking positions which enabled him to get access to the public finances. In the first case Madoff was a former business man in America and at the same time he served as the non executive chairman of the popularly known NASDAQ Stock exchange(Carpenter,A,2009). At the same time Madoff managed to find the Wall Street firm which he name as Madoff investment securities where he served as the chairman. This firm proved to be at the top in the market ranking and it consequently performed more than the earliest established firms by using the retail brokers respectively. At the same time this firm contained the advisory section and the management investments that promoted the fraud activities.
Madoff himself had initially confessed to his sons that his management firm was a type of Ponzi scheme which he generally called as one of the big lies which has ever occurred in the world history (Appelbaum et al, 2008). Ethically it can be analyzed that although Madoff was a liar and a frauder, he was at least honest because he managed to tell his sons that he had frauded the public. The sons managed to pass this information to the authorities’ .This can be seen as of the question which has to be analyzed properly since we can establish the exact reasons behind the step taken by his sons. It has been analyzed that may be the son and the father had some complications which included the debt of the father that the son had. A the same time the way Madoff was treated after the whistle was blowed up was not satisfactory.Madoff was immediately arrested by the Federal Bureau of Investigations and he was immediately charged without any further investigations. The investigation department argued that Madoff had performed the greatest security fraud and thus he was not going to be excused .At the same time after the arrest Madoff was freezed of his assets and at the same time a receiver was consequently appointed to take control of the assets. Although the SEC had initially conducted some investigations on this scam, the competency of this investigation is constantly under question. Another controversial issue was that Madoff was a great philanthropist who helped the charity organizations and churches .At the same time it was established that Maddoff helped to finance the general elections by contributing some money to the democratic and the republic camp. Moreover Madoff established some charitable organization which was commonly known as the Madoff Charitable Foundation which was a privately owned firm worth $19 million. At the same the Madoff family was famously known for donating the charities t o the educational and the cultural organizations respectively (Bray, Ched, 2009). This factors made Madoff to be seen as the public figure, thus although he came up with a security fraud, many still have some confidence and sympathy to him.
The management of the Madoff business can be regarded as a strategised method which was aimed evading several financial resources. The companies of Madoff were generally managed by the entire family. He had Peter who was his younger brother as the senior marketing director. He also served as the chief compliance officer. At the same time the daughter of peter who was known as Shana was appointed as the compliance attorney. Moreover it was established that the son of Madoff acted as the chief in control of the trading section together with the grandson of Madoff, Weiner Madoff.Although the sons of Madoff reported the security fraud to the public they were also involved (Glovin et al, 2009).
Madoff can be regarded as a criminal of circumstances .The ill motives of Madoff has been driven by the roles which he was given by the public .And at the same time he was driven by the needs of the public which made him to grow gread.Madoff had served in several authorities in the United states of America. On the first instance he was the chairman of the building cooperation board which was a governmental board at the time .The philanthropic nature of Madoff also contributed towards the fraud activities which were done .He was a philanthropist who served in several boards of the non profit organizations. Making Madoff to be the National treasurer of the American Jewish Congress facilitated further the progress of the security frauds of the congress finances. At the same time he served as the chairman of the Board of directors of the Syncs school of Business and he served as the treasurer of the board of trustees of that business school, Madoff was able to get a lot of access to the stock exchange because he had served earlier in the board of the New York City Center (Diana Heriques, 2009). Moreover he acted as the executive council of the Wall Street division, thus making him to be in control of most activities in the New York City. Consequently Madoff served as the chairman of the board of directors of the National Association of Securities Dealers respectively, one of the concrete reasons why he managed to be successful in his security frauderings.
The government of the United States of America contributed a lot towards this financial scandal by giving the Madoff’s family access to the government. It has established that the Madoff family was given a lot of access towards the lawmakers especially those from New York. At the same time they had access to the industry regulators, this may be seen as one form of corruption between the family of Madoff and the concerned authorities. The ties between the Madoff family and the Securities industry and financial markets association was questionable.SIFMA served as the main security which regulated the industrial organizations in the United States of America. Moreover Mr. Madoff was one of the members of the board of directors of the Securities Industrial Association which later came to integrate with the Bond Market Association in the year of 2006 and formed the SIFMA(David Voreaacos&David Glovin,2008).
It was quite ironic for a man who was implicated in such a big fraud to admit to the charges which were investigated on him. The big question which lies ahead is whether he was the only one who was involved in that large fraud.Madoff managed to plead guilty on March 2009 on all cases which were being investigated on him. He admitted of the security frauds, money laundering through the wire less systems and the use of the mail fraud. Despite of the fact that the fraud was of the largest scale, Madoff has tried to insist that he was the only one who was responsible for what took place. But according to many political critics it may have involved many people in the government and other non governmental organizations (Liberman et al, 2008). This made him to face an imprisonment of 150 years which has been seen as an extra ordinary judicial measure. Moreover his assets were frozen by the government.
In conclusion Madoff’s case has been seen as one of the greatest fraud in the world history especially during the times when the United States of America is facing the economic critical times.Madoff may not be the only one who was behind the money laundering scandals but he opted to serve as the scape goat for the other people who were involved. Consequently it can be seen that although Madoff was found guilty, he was one of the people in the United States of America who helped many institutions to gain financial favors. The government too has to be blamed for what happened.Madoff was appointed in many positions in the United State of America governmental parastatals.This may have made Madoff to gain access to the financial secrets. Moreover he was protected by the higher authorities before the issue came to be noticed by the public. In the United States there are many people who have involved themselves in the fraud activities but they have not been found. The government should establish some regulations to avoid any future frauds.
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