Madoff Case Study

Introduction H iodinsty is star of the basic principles for ethical business conduct. Gaining the trust of customers and investors is paramount in ensuring continued long margin success and profits. For over ten old age, Bernard Madoff created and grew one of the worlds largest Ponzi schemes cognise to date. He gained the trust of wealthy friends and prominent charity brasss, served on the withhold of NASDAQ, and lived a lavish lifestyle wholly while keeping a dark secret from those who were the closest to him. Madoffs deceit was worldwide.Being a manhood of power, Madoff lured in Ponzi scheme investors all over the globe with the guise and as for certain of being part of an exclusive club. Regulators be now increasing testing of and instructions to financial intuitions in an effort to protect consumers from another one million million million dollar scheme. Issues Raised As our test book states, When an individual engages in deceptive practices to advance his or her ow n interests over those of his or her organization or some other group, he is committing fraud Fraud is both purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression. (Ferrell pg. 78) There is no doubt that Madoff actively breached the trust of the companies twisting in the Ponzi scheme. After his family gained awareness of his actions, Madoff admitted to his dealings and was tried and sentenced to 150 years in jail. One of the questions raised by his scheme, is did he work merely? There is proof that an accountant friend assisted, scarcely who else looked the other office while he was pulling the wool over the eyes of millions? Who knew something was wrong, but still participated thinking they too could gain from being at the vellicate of the scheme?This is the promise of such schemes those at the top get all the benefits. The estimate of losses totals over $50 billion. In order to deal out that large of a sum, there would n eed to be a draw of paperwork somewhere, let alone, accountants and workers to control it. He couldnt have done it without the cooperation and assistance of soulfulness well informed who could process trades, report them and create monthly statements. Others had to facilitate him falsify all those reports, conduct mail fraud and create triple sets of books, while he was at country clubs attracting more(prenominal) investors to be at the bottom of the ladder.However, he still claims to be the only perpetrator. Even with regulators and the reciprocal ohm on the exemplar, no one will ever know with for sure how many people actually worked for Madoff or how many investors he had or how much bills he actually managed. Analysis of Regulation Since the Madoff case came into public view, a spotlight is now shining on the authorities bodies of regulation. The enthronisation world is painfully aware of what is possible when auditing regulations are negligent. currently after Madoffs arrest and trial, the SEC took quick measures to ensure the golosh and confidence of financial investing.Many of the new SECs regulation guidelines hold Revitalizing its Enforcement Division, Revamping the handling of complaints and tips, Encouraging greater cooperation by insiders, Enhancing safeguards for investors assets, ameliorate risk assessment capabilities, Conducting risk-based examinations of financial firms, Improving fraud detection procedures for examiners, Recruiting mental faculty with specialized experience, Expanding and targeting training, Improving internal controls, Advocating for a whistle blower program, Integrating broker-dealer and investment adviser examinations, Enhancing the licensing, education and oversight regime for back-office personnel. I think one of the best things the regulating bodies can do is provide education to investors and support both investors and financial intuitions to demand higher standards of ethics. The SEC, and other regulat ors, need to break out the wait and see technique and become more proactive in their regulation tactics. I like the idea of having a better whistleblower program for anonymous complaints as well as sporadic audits and training.Bottom line, the more people talk to and about financial practices the better. Conclusion Fraud is the turnabout of being honest. As the world adapts to technology and people build relationships with their money and financial institutions, ethical problems are sure to erupt. Fraud was easy during the get and growth period of technology and the internet, since its full capabilities where unknown. Bernard Madoff is not the freshman to use his position of power to gain the trust of the wealthy or hard working. Many still believe business is a bet on or war and they think each man is for himself, or no rules apply in the quest for profits and a lavish lifestyle.Because of Madoff and his off the beaten track(predicate) reaching, billion dollar scheme, the tim es have changed and the SEC and regulating bodies are more aware than ever, of how people with knowledge can take favour and lie to those who dont have it. The mystery of who knew about and participated in Madoffs scheme may never be solved, but one thing is for certain, the doors of communication must stay open between business, regulators, and consumers all over so we can look out for each other and hold each other accountable for unethical actions. Reference Ferrell, O. C. , J. Fraedrich, and L. Ferrell. Business morals Ethical Decision Making and Cases. 9th. ed. Mason, OH South-Western Cengage Learning, 2011. Print.