- March 14, 2013
- Posted by: essay
- Category: Term paper writing
Bernard Lawrence Madoff is one of the most controversial figures in the history of the Wall Street. On the one hand, he was one of the most successful entrepreneurs, who have managed to reach a tremendous success in the Wall Street. On the other hand, his entire career was a mere bubble, the total lie and deception of investors that eventually ended up with the imprisonment of Mr. Madoff with a lifetime sentence, counting 150 years imprisonment, the maximum term allowed. Mr. Madoff built up a huge financial empire, which survived through numerous financial problems and turbulent times in the Wall Street and financial crises. Nevertheless, the business build on the lie could not survive and the Ponzi scheme used by Madoff was eventually uncovered that led to the notorious trial and imprisonment of one of the tycoons of the Wall Street that proved that the Wall Street was still uncertain in terms of legal and ethical business development for one of its most outstanding representatives has proved to be a genius criminal.
Three types of illegal business behavior alleged against Madoff
In fact, Bernard L. Madoff used to be a respectable financier, whom investors and his employees trusted doubtlessly. However, the scandal has struck in 2008, which put the end to the financial empire of Madoff and undermined his public image as a reliable financier and businessman. In this regard, it is worth mentioning the fact that Madoff was pleaded guilty to 11 federal felonies, including securities fraud, money laundering, and making false statements (Brown, 2003). In fact, these allegations were unthinkable in relation to such a respectable businessman as Bernard L. Madoff used to be.
At this point, it is worth mentioning the fact that Bernard Madoff, a former chairman of the NASDAQ Stock Market and founder of Bernard L. Madoff Investment Securities, was one of the few NASDAQ market-makers who competed with the New York Stock Exchange, by trading stocks listed on the Big BoardBernard Madoff, a former chairman of the NASDAQ Stock Market and founder of Bernard L. Madoff Investment Securities, was one of the few NASDAQ market-makers who competed with the New York Stock Exchange, by trading stocks listed on the Big Board (Gagnier, 2008). He has a good reputation in financial circles and his business partners, employees and investors could not even think of the possibility of illegal activities being undertaken by Madoff but this was exactly what Madoff has been doing in the course of his financial career.
However, it was difficult to investigate Madoff’s case because the Madoffs were pioneers in electronic trading and publicly spoke of the need to use technology to transform the inefficient and sometimes shady over-the-counter stock market (Gagnier, 2008). Moreover, while he managed billions of dollars for individuals and foundations, he shunned one-on-one meetings with most of his investors, wrapping himself in an Oz-like aura, making him even more desirable to those seeking access (Creswell & Thomas, 2009). In such a way, Madoff has managed to gain the approval and support of his business partners and investors. In fact, investors could fail to trust him, whereas his financial empire was a mere bubble.
During the decades that Mr. Madoff built his business, he cast himself as a crusader, protecting the interests of smaller investors and bent on changing the way securities trading was done on Wall Street (Creswell & Thomas, 2009). However, in spite of Madoff’s claims that he started his illegal activities in the 1990s only, it is possible to presuppose that his early scheming efforts date back to the beginning of his career. For instance, in 1963, the S.E.C. began investigating whether a number of firms, including Ms. Madoff’s, had failed to file financial reports and whether that required revoking their registrations. Early the next year, Ms. Madoff withdrew her registration and the S.E.C. dropped its proceedings against her (Creswell & Thomas, 2009). Furthermore, during the mid-1970s, when changes in the rules allowed his firm and others like it to trade more expensive and more prestigious blue-chip stocks, Mr. Madoff began gaining market share from the Big Board (Creswell & Thomas, 2009). Eventually, in the end, Mr. Madoff is found to have been engaging in fraud for most of his career, then the hero never really existed. Authorities say Mr. Madoff himself has confessed that he was the author of a longstanding and wide-ranging financial charade (Creswell & Thomas, 2009). In such a way, Madoff has ended up his career in prison and the major types of illegal behavior from his part were securities frauds, money laundering, and making false statements. In fact, he used illegal schemes to earn money but he made false statement and denied his criminal activities till the end, when his guilt became obvious and evidence of his schemes was uncovered. At the same time, he did not just still money from his investors using securities frauds but he also laundered money to use them for his own benefits. Some specialists point out that it is ironic that a man who campaigned for greater transparency within NASDAQ should end up being charged with fraud and losing billions for innocent investors (Gagnier, 2008).