What are the ethical issues involved in the Madoff caseSolut

What are the ethical issues involved in the Madoff case?

Solution

1. Being an investor and investment adviser, Bernard Madoff started off with a legitimate and successful businessman in his early career. He also served as chairman of NASDAQ in 1990, 1991, 1993 and served on charitable board. Being a man of respect and trustworthiness, Bernard Madoff founded his own company called Bernard L. Madoff Investment Securities LLC in 1960 which consisted of only his family members. His company was one of the top market maker businesses in Wall Street. Bernard Madoff was arrested on December 11^th, 2008 for using Ponzi scheme to defraud his clients. Basically, in this scheme, He promised investors a large return of 10 to 12 percents of profit for their investment. Tricky part was Bernard Madoff never invested any of his money in his investor funds. All he did was transferring money from one bank to another. However for this scheme to work, Bernard Madoff always needed to attract new investors and use their investment money to pay the earnings for old investors. Typically, this type of scheme would likely to be self-destruct because of the ability to attract new investors would diminish gradually.

2. The ethical issues involved in Madoff’s case