Essay about Ponzi Scheme

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Largest Ponzi Scheme Ever

Bernie Madoff was able to pull off the biggest ponzi scheme in United State's history that was worth fifty billions dollars. Over a thirty year period Madoff looked like the"golden boy" investor that knew the secret ingredient that could turn a profit over and over again no matter what the market was doing. Word of mouth spread of high success rates gained more clients and made them want to keep their money with him longer. Also not charging normal fees made Madoff as a investor a no brainer. He ran a don't ask and don't tell operation, if a client asked questions they would simply reply by saying if you don't like what we are doing you can take your money back so employees would not bother or ask questions period. Even when the company exceeded 15 clients which meant they should get registered by the SEC, Madoff ignored this rule and even told his right hand men not to , even it they had over three thousand clients.

He also was in the marketing making business which was a good front and also this made him able to see what upcoming investments big banks were going to make also known as insider trading. There were many red flags along the way to his undoing, I believe no employees wanted to snitch him out because everyone was making money. Even after computers took over the world Maddoff and company would send out receipts through mail to give the illusion everything was legit when really he was using hindsight. Another red flag was the accountant Maddof used, even with all the clients he had one accountant in a small firm outside of New York. For the most part he tried and did stay under the radar using other front men and their names. For thirty years he was always able to turn a profit even when the market was at its lowest, this ultimately came to his undoing. During the 2007 housing market and economic crash he was still able to make money for investors. He had hindsight that the major banks were going to go under so he got his money out of there. This finally gave Maddof up because he was the only one able to make money at this time. He was sentacned to 150 years in pirson without parole.

Maddoff and company committed one of the oldest types of white collar crime which was insider trading .(Friedrichs 2010) Because of his marketing making business he was able to see what the high rollers were going to bet on and he was just copy them. Knowing privileged information he was able to stay ahead of the game and have the ability to not lose money. He also just plain lied when he sent out the clients receipts reporting he was making them a profit.

Madoff was respected and well known on wall street which gave reasons for people to respect and trust him. The aftermath of Madoff's operation people lost money and also trust in the government which caused social harm. (Friedrichs 2010)The older couple in the video
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