Bernard Madoff's Mysterious Case

his report digs into Bernard Madoff's mysterious case and his long time investment securities activities that ultimately resulted in a massive fraud of unequalled magnitude. A number illegal business behavior are clearly identifiable, as well as three groups of persons who got impacted through Madoff's actions. Scrutiny into risk management follows; through describing three internal behaviors that if implemented, could have assisted prevent the growth of Madoff's business empire. Also, one looks into triple ways through which investors could have avoided Ponzi schemes such as those of Bennie Madoff. Finally, various legal actions in the wake of the Madoff fraud discovery are uncovered, but with more litigation looming.

Introduction

Bernie Madoff had a reputation as an enigmatic innovator in the investment business. He was the former chairman of NASDAQ, which is an electronic forum for penny stocks, or over-the-counter stocks too petty to be noticed on the New York Stock Exchange. Term split-strike conversion to describe an investment strategy that purportedly offered an extra edge to one's portfolios got coined by him. Yet much of what is known of Bernard Madoff Investment Securities and its owners side business remains encapsulated in mystery, as a result of the tight-lipped confession of the accused, about his crimes. Bernie declined to implicate friends and family members, claiming that he committed the biggest investment fraud in history by himself. Since his incarceration, details have been eventually surfacing suggesting that Bernie Madoff may have had accomplices. Maybe there are more charges than can be filed against him, although Madoff's many offences may already be enough to keep him in prison for the rest of his life.

Three types of illegal business behavior by Madoff

Charges against Madoff included fraud, deceptive practices and theft. There were clear signs that Madoff's activities were fraudulent. Madoff made his reputation and his millions through delivering intact returns of one or two percent per month to his investors' month in and month out from the day he started the advisory business investment as an adjunct to his brokerage company. Hedge fund operators and wealthy investors marveled as Madoff worked his "magic" in bear markets and bull markets alike, regardless of the gyrations on the stock market.

Eleven charges got filed by federal prosecutors against Madoff. Securities fraud included the first charge and entails false claims of investment security holdings, and misinformation concerning brokerage and stocks advice. Also, considered part of this criminal activity is is divulging insider information. The other major charge composed of three counts of laundering money, domestically and through international accounts. Money laundering refers to the funneling of illegally acquired revenue into new monetary configurations, with the intention of hiding this revenue's original origins. In connection with both his investments and securities adviser businesses, prosecutors charged Madoff with wire and mail fraud. Such offences involve coming up with schemes utilizing either the telephone systems or the United States Postal service towards obtaining property or money in an unlawful or false manner.

Three types of parties that were impacted

Those hugely affected by Madoff's actions include investors, employees, banks and business partners. Wealthy and prominent individuals including Fred Mepon, who is the principal owner of the New York, MET lost millions of dollars through Madoff's unethical business behaviors. Hedge funds and banks around the world, in US, France, Britain, are reporting losing billions. Charities, university endowments and other institutions, which entrusted their monies to Madoff, or to hedge funds, which invested in Madoff's company are shocked by the news that their investments have been rendered worthless. The fallout of the scandal by Madoof could result in other investment firms leading to thousand more business and individuals being impacted. Losses from Madoff's fraud exceeded $50 billion.

Inextricably connected to Bernie Madoff's rise to prestige and power are Madoff's family, Bernie's father-in-law Saul alpern loaned $50,000 to assist him unravel Bernard L Madoff Investment Securities in November of 1960. Saul had founded his own accounting firm in partnership with Sherman Heller, with their office in East 40th Street in Manhattan would double as Bernie's business address during its early stages. In the meantime, Bernie's mother Sylvia was operating a brokerage firm named Gibraltar Securities out of her home, and it lasted until the Securities and Exchange Commission started an investigation of 48 such bucket shops in August of 1963. Amazingly, the SEC did not prosecute any of them; Issued the following January, a litigation release strongly suggested that an outside court settlement had moved these small operations out of business for not filing financial reports.

The firms admitted violation, but requested that their registrations be withdrawn; and in this connection, they represented that they are no longer hooked to the Securities business and do not owe customers any securities or cash. The court concluded that the public interest would be served by allowing the withdrawal, and discontinued its proceedings.

People who had worked under Bernie Mudoff but were non related, also became tainted from the association following Madoff's arrest. This group of employees includes those who may have had direct dealings through Mudoff subsidiaries such as Cohmad Securities Corporation. The idea also applied to those directly employed, such as former executive assistants Elaine Squillari and Eleanor Solomon.

Three Business safeguards which ought to have been adopted

An overall lack of diligence practiced not only on the part of the company's employees,