Bernard Madoff Ponzi Scheme Essay - 550 Words

Bernard Madoff Ponzi Scheme (Essay Sample) Content: Bernard MadoffNameInstitutionBernard MadoffA bunch of people have been involved in dishonest acts like conning people of their hard-earned property. These acts leave people poor and leave the victims discouraged. Bernard Lawrence is a 76 year old American conman. He is best known for the Ponzi scheme that defrauded thousands of investors millions of dollars. Ponzi scheme was started in 1990s to defraud people of their dollars but investigators have speculated that it may have started in 1970s by Bernard Madoff as the mastermind. This work addresses the issues of dishonest acts and their effects to the victims with special focus on Ponzi scheme spearheaded by Madoff.Madoff acted as a stockbroker, financier, investment adviser and chairman of several non-governmental organizations and his investment company, Bernard L. Madoff Investment Securities LLC. Through his fraudulent schemes, investors lost over $65 billion. Some chronology of events included underselling the es tate of Peter Madoff, brother to Madoff. This raised alarm among the investors. A victim firm affected by the Ponzi scheme was SIPC trustee that lost over $18 billion. The have been several convicts of the scheme including a former personal secretary Annette Bongiorno who was given 6 years, Daniel Bonventure, the director of operations for investments for 10 years and brother to Madoff, the senior managing director for 10 years. The actions of Madoff and the partners led to stiff government measures to control future vices. Actions by the judiciary led to the victims benefiting as "Irving Picard, the trustee liquidating Madoffà ¢Ã¢â€š ¬s firm, distributed over $6.351 billion to the victims. The victims have tried to get full refund but in vain from the liquidated firm" (Reuters, 2014).The dishonest behavior of Madoff and his partners led to losing of over $65 billion. There fraudsters had members who from United States and abroad including Europe, Asia and South America. "Most of t he victims of Madoffà ¢Ã¢â€š ¬s swindling were organizations, prominent Jewish executives and all people who were affluent enough to contribute to the scheme" (Henriques, 2008). The Ponzi scheme led to financial crises when Madoff could not pay out interest rates to the existing members as there were hardly newcomers. Many of the victims "view this case more of mystery with less clarity since Madoff has not commented on the issue apart from the statements from federal prosecutors" (Henriques, 2008). Such Ponzi schemes prey on the local trust people have on investment advisers.Fraudsters like Madoff should be taught hard lessons like convictions from the federal courts. Madoff was sentenced to the maximum allowed prison period of 150 years to pay for his deeds. Other participants of the scheme were given between six and ten years in prison. There were also refunds to the victims but the amounts were less than what they had invested in the scheme. The victims have the right to seek f or compensation from the government and insurance companies that insure such investments. Strict rules for investments should be enacted and implemented. The masterminds sh...