You must have Credits on your Balance to download this sample
Finance & Accounting
Pages 4 (1004 words)
Xiaolin Lu Professor’s name Finance and Accounting November 2012 A Corporate/banking Scandal: The Bernard Maddoff’s Ponzi scam Perhaps, the Maddoff’s Ponzi scam is one of the biggest financial scandals, and a neat one too, that ever happened in the financial community…
But there are doubts if all his investors could ever fully recover their investments. Explanations why the scandal happened: how it is related to separation of ownership and management. The discovery of Maddoffs’s scheme was only accidental, as Harry Markopolis, a portfolio manager for an equity derivatives asset firm in Boston was asked to analyze Maddoff’s money making methods. Thereupon, he discovered Maddoff was using a Ponzi scheme. Markopolis, in an interview by Dick Carozza (May 2009) said that he had tried to convince and submitted evidences of the fraud to the SEC for 9 years, but to no avail because SEC would not listen. They are convinced that Maddoff was clean because he is such a respectable person in the financial community and that Maddoff strategy was doubtful. His scam was finally uncovered in 2008, when the stock market crumbled, and as the investors rushed in to redeem their investments, Madoff ran out of cash and turned himself in. After pleading guilty on March 12, he was sentenced to 150 years of imprisonment with losses estimated from $10 billion to $65 billion. How he was able to fool numerous people that includes high ranking bank officials, i.e. UBC, HSBC, is mind-boggling up to this time. Normally, a Ponzi scheme operates on a promise of higher interest for an investment, but Maddoff has no promise of that nature. ...
Not exactly what you need?