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    Bernard Madoff case study

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    1. In a narrative format, discuss the key facts and critical issues presented in the case.

    2. Do you think Bernard Madoff engaged in creating a Ponzi scheme because of greed or did he employ it as a short term strategy and just caught up in a process that he could not reverse?

    3. What were the elements that led to him so successfully wooing some of the wealthiest and most intelligent clients? Why do you think the SEC was unable to uncover his fraud?

    4. If you were in the position to recommend an investment advisor, how would you make sure that you did not become the victim of a Ponzi scheme or other financial fraud?​

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    Solution Preview

    Maddoff founded one of the first brokerage firms to use the computer to reduce the cost of trading securities and one of the founders of the NASDAQ. His firm grew dramatically during to highly consistent earnings, regardless of market movements. His career achievements put him in high regard. Maddoff intimidated the SEC during their review of complaints that his returns are not realistic or even possible. Maddoff also did not accept clients that were probing (asked details about methods) or required online access to see trades in real time.
    In 2008, Maddoff confessed to his son that he results were fraudulent. News of the Ponzi scheme outraged the public and called independent audits into question. The auditor, Friehling, was a single-auditor firm, clearly not staffed enough to audit a ...

    Solution Summary

    Your discussion is 523 words, indicating that Maddoff was driven by greed, set up client as special people to create allure, pushed back on inquiries using intimidation and never intended to make this right.