Ponzi Schemes
Name
Institution
Ponzi Schemes
Bernard Madoff was a person ripping off investors and companies of their hard earn money. Despite the Ponzi scheme being reported to the stock exchange commission, no action was taken. Harry, the whistleblower, made several submissions to the stock exchange commission with no response. He claims the investigators in the commission are trained to look at papers and assess any fraudulent activities, but they are not trained to look at the financial details in the documents.
The activities of Madoff caused severe damage to several investors and companies when the scheme went under. With Madoff and his agents living a luxurious life, the clients of the project were being evicted from their houses, with most of their money gone with the scheme.
The investors and companies invested their money in the agency with a 12% interest per year. Therefore they expected to be rewarded well when the time came to redeem their money. Madoff operated the scheme for more than 20 years, and therefore, in the duration, he had amassed a lot of investors money. He was good at recruiting his client since he preyed on his Jewish community since he was Jewish. That was not enough when he realized the was not bringing in the required cash; he preyed on his golf members too.
Madoff kept his client with promises of investing in real assets while all he did was convert the contribution to cash for himself. Those actions alone have an imperious effect on the economy and to the investors. As a result of Madoff’s carelessness and fraud, many clients who were investors and companies lost their money in the scheme. Madoff was also close to the regulatory boards, and it was difficult to suspect the scheme of fraud. The scheme was also reputable, which made investors and companies invest without a second thought.