Position Paper on Bernie Madoff Essay Example

withdrawn considerably more than their initial investment.” For clarity, a Ponzi scheme is a deceptive investment fraud that promises high returns with minimal risk to its investors. It provides returns for early investors by bringing in new ones. As long as new investors keep coming, these scams can deliver the promised returns. These schemes are bound to crumble when the inflow of new investments ceases or there simply isn't enough money to distribute, which was an inevitable scenario whether Madoff confessed or not.

This plan not only yields profits for senior investors but also produces substantial revenue for the company itself, inclusive of Madoff. As for the funds accrued by investors from this scheme, it's difficult to determine the best course of action. After going through various articles, it's still unclear to the media or law enforcement if anyone else was involved in this numerous-billion-dollar Ponzi tactic. In the absence of this intelligence, I propose that personally invested individuals should retain any capital generated via this method.

Is it really their fault if they lack the necessary tools or understanding to accurately know what is equitable in an investment agreement? Notably, Madoff's company had an excellent reputation and was constantly discussed, which led individuals to assume it was valid. Meanwhile, firms are equipped with professionals knowledgeable about finance and protection measures for their investments. If there were no hidden secrets between Madoff and these firms, then the blame should lie on the companies for their negligence. Numerous major firms, including HSBC and Fairfield Greenwich Group, incurred losses ranging from 100 million to a staggering 7.5 billion.

The Ponzi scheme he orchestrated evaded detection even from large corporations equipped

with their own accounting departments. As noted on Wikipedia, prominent victims of this scam included former Salomon Brothers economist Henry Kaufman, Steven Spielberg, Jeffrey Katzenberg, actors Kevin Bacon, Kyra Sedgwick, John Malkovich, Zsa Zsa Gabor, Mortimer Zuckerman, Jerome Fisher (co-founder of Nine West Shoes), Baseball Hall of Fame pitcher Sandy Koufax, broadcaster Larry King, World Trade Center developer Larry Silverstein, and Senator Frank Lautenberg's family foundation. Furthermore, The Elie Wiesel Foundation for Humanity suffered a hefty loss of $15 million while Wiesel and his wife Marion lost their entire life's savings (Wikipedia).

It confirms that Madoff's investment plan wasn't solely for the naive or reckless. Speaking about personal investments, I'm not privy to the specifics of my Aunt and Uncle's investments, only that they invested in some. During a discussion with my father about my essay on Bernie Madoff, he subtly revealed this information which I found to be quite fascinating.

Certainly, there must be numerous individuals who sunk their entire retirement savings into Madoff's company and now find themselves in a situation of complete financial loss. As reported by Fox News, a class action lawsuit is underway against Bernie Madoff, with participants in the hundreds. It is hoped that more people will join, especially those who have invested their entire life savings, so they can anticipate a future with money. It would be quite amazing to expect high interest returns in the current economic climate.

At the company I work for, Top Food and Drug/Haggen Inc, we have the option of participating in a savings plan that guarantees a fixed 10% yearly interest compounded irrespective of market variations. However, the significant drawback is the absence of insurance

or security for the deposited money, implying that if the company collapses, the invested money will most likely be lost. When I first mentioned this to my father, he found it strange since most money market accounts typically offer no more than 5%. So far, I've been fortunate, but due to the deteriorating economy, the company reduced its earnings to 7% at the onset of the 2009 fiscal year.

Stephen Davis, a senior fellow at Millstein Center for Corporate Governance at the Yale University School of Management, questioned the oversight and risk management systems of financial institutions. He wondered why these systems did not identify issues earlier and suggested that some could be held accountable if found negligent. Davis's remarks were quoted by Brockman. The New York Times reported that Madoff attracted new investors with hefty promises of return rates as high as 46 percent, which is notably higher than the normal investment return rates of 8 to 10 percent.

Nevertheless, it remains unclear just how aware those favored investors might have been about their unique position. Suppose I'm a business and an investment firm informs me I could earn up to 46% interest. That'd be fantastic, yet simultaneously it'd raise a major alert. Despite Madoff's conviction for his comprehensive Ponzi scheme, I posit that several of the corporations who invested with such a bait ought to be held accountable for their respective losses. This notion is so grandiose that even an ordinary individual should recognize it.

Given the extensive accounting and security measures in place within companies, it should have been apparent that Bernie Madoff's assertions were dubious. According to mainstream views, none of the news reports

or articles I've come across support the justness or legality of this case. It must also be mentioned that Bernie Madoff himself admitted his involvement in the Ponzi scheme after a tip-off from his management. The scheme was inevitably heading towards a collapse fuelled by greed, irrespective of whether someone had reported it to the authorities or not.

The Associated Press reports that Madoff, who plead guilty without any plea agreement, is not required to cooperate with the prosecutors. This has led a number of legal pundits and observers to suggest that he may be willingly taking the blame to safeguard his wife, family, and friends (Neumiester and Hays). In the preceding months, he had transferred the ownership of two of his properties to his wife. A significant amount was also withdrawn by her from numerous funds connected, albeit not directly owned by Madoff's investment firm. This points towards a possibility of certain indications that suggested the unexpected incidents that occurred in the last few months.

After scouring the web extensively, I was unable to find any contradictory views related to Bernie Madoff's litigation. This clearly underlines not just the legal violation involved, leading to his imprisonment, but also the moral and ethical impropriety as there's an absence of any supportive voices for him. I remember seeing news items and reading about his son, Andrew Madoff, losing millions thanks to his father's scandal - it's just appalling. Reviewing the various ethical principles we have studied during this term and applying them to this case, I immediately thought of Egoism.

Upon delving into the comprehensive evidence, I've discovered that the ethical principle of Utilitarianism seems applicable to this situation,

barring the conclusion and aftermath. Egoism, on the other hand, aligns morality with self benefit. As per our textbook, "Egoism argues that an action is deemed morally correct if it largely benefits an individual's interests" (Shaw 45). Herein, Bernie Madoff and his Investment company can be perceived as the "agent". This implication aligns perfectly since Madoff had been profiting personally by exploiting others, thus orchestrating a scheme solely for self benefit. This theory corresponds with the entire plan including its results.

Conversely, our text describes Utilitarianism as a moral guideline that suggests we should always act in a way that promotes the maximum possible balance of good over evil for all those who might be affected by what we do. Here "good" is interpreted as pleasure or happiness, as stated by utilitarians (Shaw 49). This theory, I found, is somehow applicable to the circumstances before it was discovered that Madoff was running a scheme. Prior to the revelation, many parties were experiencing happiness from the situation: Bernie was happy, existing investors were happy because they were experiencing profits, and new investors were excited about gaining incredible returns in the future.

In summarizing Bernie Madoff's Ponzi scheme and subsequent prison sentence, it is my firm belief that he merits the maximum legal repercussions in force, which currently stands at 150 years imprisonment coupled with the reallocation of his wealth among the victims to repay their losses. My view grants leniency towards those who benefitted from prior investments while insisting on harsher measures against big corporations that should have been alert against fraudulent ventures. From my investigations, I detected no contradictory perspectives worth debating or countering my stance.

Bernie Madoff

seems to be in a no-win scenario, according to nearly everyone who participated in or learned about the case. My observations of the case have not personally impacted me, but I believe they may alter how future individuals approach investment organizations. I am still taken aback by how Madoff's actions and commitments were so neglected by both large corporations and individuals. I wouldn't be astonished if this case prompted government to enact new legislation or guidelines for investment companies, which would ultimately be beneficial.

Citation

http://en.wikipedia.org/wiki/Madoff_investment_scandal