Madoff’s Ponzi Fraud
The motivation one would have to research the topic on the Bernie Madoff Ponzi scheme would be a result of the scandal constantly being spoken about on the news. Thus once intrigued by the recent scandal, one may wish to seek more knowledge on the issue.
It was later discovered that Madoff had been orchestrating the Ponzi scheme since early 1990s and according to some accounts, it has been said that the scheme had started in early 1980s. The firm used to produce a false paper trail which was sent to the clients to present a false impression of the financial position of the firm which led towards investment by the investors. Later, gains were fabricated and false financial performance reports were released.
Following these measures would greatly reduce the probability of falling prey to Ponzi schemes.
Reasons include; the irresponsibility of Madoff and his company, consumers’ greed for high return and their incautiousness and mainly because of the lack of regulation in the financial market, which is also the main reason for the financial crisis. To enhance the regulation, there are two main methods, one is the direct intervention from government and the other is the pressure from various communities and organizations.
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The Wall Street Journal,2009. Madoff Jailed After Admitting Epic Scam. The Wall Street Journal,13, March
Kovacich, Gerald L. Fighting fraud: How to establish and manage an anti-fraud program. Burlington, MA: Butterworth-Heinemann, 2007. Print.