Andrew invested his funds in the company, however he was stopped from doing so by Mark in the year 2001 (Glovin & Scheer, 2011). The company made use of the numerous marketing tactics for the purpose of drawing the customers and thus stimulating a new era where electronic trading was of priority. The company has been a highly profitable security firm tapping enormous volume of the stock trades from the Big Boards. The company during its initial days used to deal with the Over-The-Counter along with Pure-Brokerage-Pink Sheets transactions. It was because of the Rule 390, the company was able to trade in NYSE stocks. For the purpose of altering the execution practices, the company had to utilize the Cincinnati Stock Exchange. It has been evident that among the five brokers, Madoff has been one of them who had been involved in the creation of the NASDAQ. It was noted that the company’s spread was quite sublime. It started as an investment advisory firm. It has been noted that the company had not been recorded in the stock exchanges till 2006. It can be stated that in terms of the US Securities by the year 2000, Madoff Securities had been successful at becoming the top traders and had in approximation $300 million of assets (De La Merced, 2008). Three floors were occupied by the business of Lipstick Building. The 17th floor belonging to Lipstick Building was office of Bernard Madoff that had in approximation of less than 24 of the staffs. It has been found that only a few of the employees were allowed to enter into that building. The floor was named as the hedge fund floor (Henriques & Berenson, 2008). The branch office of Madoff was also in London that was completely separate and different to that of the Madoff Securities employing 28 people and thus handled the...
Numerous news and articles reported the frauds that were committed by Bernard Madoff. One of such frauds has been the operation of $50 billion scheme, named Ponzi scheme, which was one of the major frauds that took place in the history. Madoff stated that it had been his fault that he paid the investors the money which was not at all real. It was found that approximately 50 percent of its customers invested in hedge funds, while other customers consisted of banks along with the wealthy customers. In the website of the company, it focused upon the “high ethical standards” of the firm (Glovin & Scheer, 2008).
The auditors of Madoff were accused by the Securities and Exchange Commission (SEC) of committing frauds in securities. They fallaciously demonstrated that they had conducted the audits legitimately while the fact was that they had not. It was stated by SEC that it was Friehling that helped in the smooth operation of the Madoff Ponzi plan. He falsely stated in the yearly audit reports that F&H ‘(David G. Friehling, CPA and his firm, Friehling & Horowitz, CPAs, P.C.)’, has checked the financial statements of BMIS according to the Generally Accepted Auditing Standards (GAAS). Further, the auditors of Madoff were accused of attaining ill-received benefits via returns from Madoff as well as BMIS. They were also accused of taking out the returns in the names of Friehling along with his members of the family from BMIS accounts (LaRocco, 2010).