Bernard Lawrence

Describe the three types of il efficacious behavior asseverate allegations against Mr. Madoff and for each of the behavior explain why it is illegal or unethical in the conduct of business? Ans) Bernard Lawrence Madoff was a stock broker, investiture advisor and the non executive president of the NASDAQ. Bernard has been found guilty for 11 federal crimes for which he has been sentenced to durance for 150 geezerhood and had to pay $170. 179 billion as a penalty. He was convicted for 11 federal crimes which included security subterfuge, money laundering, perjury, thieving from an employee benefit purpose, wire fraud and mail fraud.In order to further light up three of the crime would be explained in details which argon as follows Money Laundering Bernard Lawrence had been convicted for 2 International money laundering crimes. He had been using the money of his investors for his own purposes and was showing false accounts. His company was convicted of tax revenue evasions and taking advantage and showing false accounting in his books. This is a serious crime in the all world as this is a way of misinterpreting and misleading the investors and the g overnment officials.This is an unethical business physical exercise beca engage it refers to cover important details of the business from the miscellaneous stakeholders and thus taking unjustifi commensurate advantage from that. The companies seem to misguide the public and the government and save trillion dollar signs by evading taxes and buying assets from the money that they urinate actually stolen from the investors. Securities fraud The victim was convicted of securities fraud where he was guilty of doing illegal sale and purchase on the trading floors. He had broken various securities laws and embezzled millions of dollars.This is an illegal practice because the investors by doing so start compositionipulating the stock exchange and the stock prices. This is considered a crime because by this the stock prices can be over verbalise or understated which would harm the small investors. Theft from Employee benefit plan He was alleged of stealing $10 million from the pension pedigree assets. This is a plain act of stealing where he a interchangeablek the money that was the justly of 35 labor unions. Due to this the labor union would non render been able to lend the money that was basically their right by law. (Voreacos, 2009)Question 2 Name three types of parties who were impacted by the practices of Mr. Madoff and describe how they were impacted? Ans) The grungeization had impacted the lives of various deal which included people from all walks of life. From various celebrities to commodious investment companies and banks bring had an impact on their balance sheets imputable to the scandal. Some of the parties involved were Universities Various universities and schools which include the late York University and Maimonides school had invested their inactive broth s with the company which they lost due to the scandal. investiture Funds Various investment funds had their assets homophileaged by the company. The investment companies lost the money that they had invested with the investment fund of Lawrence Bernard. Various investment companies had even bought the shares which brought them loss of billions of dollars. Charity organization A lot of Non profit organizations and good-will organization of celebrities and other people had invested the charitys money. The charities had to lose billions of dollars due to the fraud as they did not get their invested money back. (Madoffs Victims, 2009)Question 3 Describe three business safeguards that may befool prevented the harm cause by Mr. Madoff? Ans) The ponzi scheme was a major negligence from the several(prenominal) authorities. The sulfur authorities did not set ab pop complete check over various factors due to which people had to face losses of millions of dollars. Some of the ship canal the debacle could afford been prevented are Strict policies from Securities Exchange Commission (SEC) This scandal had been in practice for almost over a decade exactly was not detected by the SEC. Thus the SEC was not in like manner active in its practices.The organization was giving a high fork over which was an unusual activity. Thus in such an abnormal situation SEC should gestate been to a greater extent diligent and filmy in fulfilling its duties. If there had been gull checking of the accounts and financial transactions this loss could save been prevented. Transparent practices by the international auditors It is something very pungent that such a massive scandal had lay down the financial world despite of the strict financial standards and the constant audits by the licensed auditors. The external auditors would take a shit to be to a greater extent ethical and transparent in their activities.If they would have identified small symptoms of unethical practices to t he state earlier, millions of dollar could have been saved. Forensic Accountants reactive attitude The forensic accountants have been soundless over the issue until it was the news all around the world. The forensic accountants are trained to identify any sorts of fraud symptoms in the economy. at that place was a reactive approach by these accountants which caused this fraud to go on for too many years. The forensic accountants could have prevented the loss by actively insurance coverage them on time. (Herrerra, n. d. )Question4 Describe three ship canal the unavowed investors could have prevented themselves from happen? Ans) The investors could have been prevented from the debacle by k instantaneouslying the investment practices and the basic rules of investment. slackly the investors are not aware of the practices due to which they are not able to identify if the investment is done in the right manner. Second, the loss could have been prevented if the investors have been ca reful in selecting the investment company. The investors would have been saved if they would have not selected the company for investment.The investors could have managed their funds properly by not investing huge amount in just one avenue. The risk could have been mitigated if they had invested at various avenues due to which they would not have to bear such a huge loss. (Herrerra, n. d. ) Question5 Describe three legal actions that possibly may be brought against Mr. Madoff under criminal or cultivated law? Ans Mr. Madoff had been convicted of 11 serious federal crimes to which he was sentenced to imprisonment for 150 years. The three legal actions against him are as follows Securities fraud 20 years of imprisonment with 3 years supervised release.Along with this there would in like manner be a fine of $5 million or doubly the gross gain or loss from the offense. Money Laundering 10 years of imprisonment with 3 years of supervised release. These would also be a fine of $250,00 0 or doubly the gross gain or loss from the offense. Perjury 5 years of imprisonment with 3 years of supervised release. These would also be a fine of $250,000 or twice the gross gain or loss from the offense. ( segment of Justice Press Release, 2009) References Department of Justice Press Release. (2009, March 12). Retrieved June 7, 2010, from Federal Bureau of Investigation saucily York http//newyork.fbi. gov/dojpressrel/pressrel09/nyfo031209. htm Herrerra, C. (n. d. ). Ponzi Schemes and Forensic Accountants. Retrieved June 7, 2010, from Accounting Sites http//www. bellaonline. com/articles/art49196. asp Madoffs Victims. (2009, March 6). Retrieved June 7, 2010, from The Wall Street daybook http//s. wsj. net/public/resources/documents/st_madoff_victims_20081215. html Voreacos, D. (2009, March 11). Madoff Criminal Charges Summary of the 11 Counts Against Him. Retrieved June 7, 2010, from Bloomberg http//www. bloomberg. com/apps/news? pid=20601087&sid=a6Osnj. SoYdM&refer=homeBerna rd LawrenceBernie Madoff was born on twenty-ninth April, 1938 in New York. His parents were Jewish, namely Ralph and Sylvia Madoff. In 1956, he had graduated from the Hofstra University where he had studied political science. He then became a plumber, and later on founded the Madoff charitable Foundation. His career in the investment field began after he married Ruth Alpern, his high school sweet heart, who modeled at a stock exchange market in Manhattan. In 1960, he founded the Bernard L. Madoff Investment Securities LLC, (now NASDAQ) and has ever since acted as its chairman until he was arrested.Before the discovery of the fraud, Bernard L. Madoff Investment Securities seemed like the kind of firm that every(prenominal) stock broker would want to work with. The investors and the employees all believed in Bernie. It was for this reason that he was appointed as the chairman of NASDAQ, and was also appointed to industry channels by the SEC. Madoff is utter to have been a philanthr opist who worked with many nonprofit institutions. He was a man of great influence, and many people had entrusted him with their wealth.Madoff is known to have committed the biggest fraud by dint of a Ponzi plan which he had carried out for at least 20 years. He confessed his crime to his sons, Andrew and Mark last year. This is an essay applications programme Madoffs, big Ponzi plan that led to his incarceration. (Lenzner) The Ponzi plan Even as Madoff was assuage in studying law at Brooklyn Law School, he was in involved in the securities business. On of his first investments was with a company, called the Electronics Capital, where he had invested $200. harmonize to what the SEC disclosed, his stocks had grown from the original $200 to $16,140.At that time, this was a lot of money, and this must have captured his interest in the securities market. His scheme to get involved in illegal operations to make more money must have been in his mind for some time. This is because in t he 1990s, Madoff would boast to some of his investors that he was using a different strategy from the split-strike conversion method. This must have been what led to the fraud. An investigation revealed that there were clues in his office, but it was very surd to catch him.For example, there was an IBM server, and an AS/400 which dated from as archaeozoic as the 1980s reports say that it was so old, that some information was key out in by hand, but Madoff was reluctant to have it replaced. This machine is said to have been the centre around which the fraud was schemed. Thousands of statements that were printed from it revealed trades that had never been made. (Bandler etal) According to those who vie roles in the early electronic trading and the company, Madoffs company was undefeated yet in the 1970s and the 1980s.They further said that the success could only be attributed to the fact that his security business was the first to have used the electronic software to trade stoc ks. He was also able to soak up many consumers because the software was not only cheap, but also fast. or else of taking a fee for trading stocks like the NYSE did, Bernie give some firms like Charles Schwab a few dollars a share for every order they made. Though the software used by Madoff, his company had the expertise to hedge the risk that resulted form the imbalance in the buy and sell orders and hence were able to preserve its profit.This means that even if he paying(a) the client, he still remained with teeming money to make a huge profit. During the early 1990s, his firm had succeeded, in that it was responsible for executing at least 9% of all the stocks traded every day at the NYSE. His firm vary in trading other shares from big companies outside the exchange. In the register of trading stocks, no other company could outdo NASDAQ, which got its advantage from the use of electronic means. He was respected among his peers, except those of the NYSE, who likened his o rders to kick backs.They viewed Madoffs trades as shabby, but they had no way to prove any illegal activities. The payments that he paid for the orders were all legal, and Madoff ensured that they remained so. NASD and SEC insisted that the securities industrys self adjust body bring together a display panel to investigate NASDAQ. existence the chairman NASDAQ, Madoff challenged his investigators by suggesting that they go ahead to include witnesses in the panel. He was able to talk himself out of the problems that could have possibly befallen him. (Bandler etal) He successfully talked the investigators into his line of thinking.In fact, some of the members in the panel said that he was not pushy during the interrogations. Although his main aim was to protect his business, he never suggested that in any direct way. He was just determined to make the panel understand the way his business operated. At the end of it all, Madoff prevailed. He had managed to change over the panel tha t his practice of offering payments was all the same as that utilize by the Wall Street. Things however changed in 1997, when the rules that governed the trading spreads changed. That year, they were slashed from 12. 5? a share to 6.25? , and later on in 2001, dropped to just a penny. NASDAQs profits started decreasing. Madoff was able to continue committing his fraudulent acts because he now started marketing his investment business by convincing people through word of mouth. Those who learnt of it spread it to their friends. It became a private club, and Madoffs plan not wanting to admit new members, attracted even more attention from those who knew of it. His private investors were urged to maintain quiet, and not to mention the matter to an outsider if they did, they risked losing their investments.In spite of his efforts to keep his investments secret, they somehow surfaced, but he was determined to keep covering up any act that would arouse qualm. Two publications that were directed at arousing suspicion on Madoffs operations went unattended. Even the employees who worked within the organization ignored them after all, they had no clue of what was going on. It later turned out that Madoffs illegal investments were interfering with the legal ones. In fact, during the trial, Madoff admitted hat he transferred millions of dollars from his fraud businesses in London to his legal firm in New York.His fraudulent schemes were so complicated it is said that it would not be unproblematic to understand his operations in details. He also lied to react or cover up his acts. For example, in May 2006, he was interviewed by the SEC, and asked whether the equities were traded in Europe, he admitted that they were. The truth was that he always said that he had several trades in Europe, whenever he could not explain the nature of the businesses. There were also no equities being traded in Europe. In many occasions, Madoffs lies paid him off. Madoffs accompliceAlthou gh Madoff was the mastermind schemer, he obviously had an accomplice. Employees confessed that Frank DiPascali, acted as Madoffs deputy and was responsible for campaign the business on the seventeenth floor, the floor where Madoffs office was. A former trader said that the he was aged 33, but people neither knew what his work very was, nor his title. One employee said that, Everyone knew he was a big deal, but he was like a shadow. (Bandler etal) DiPascali, when arrested, showed his involvement in Madoffs plan when he started to negotiate a plea deal with federal prosecutors.He offered to uncover the whole scheme and to name names, in exchange for a reduced sentence. However, he had no evidence that there were other family members involved in the Madoff scheme. DiPascali was the facilitator of Madoffs schemes. He admitted to have manipulated phony returns on behalf of several major investors in Madoffs business. Some of them include Frank Avellino, is said to have been running th e feeder fund and Jeffry Picower, who had to shut down his foundation as it was alter by the losses associated with Madoff.For example, if one of such important clients earned more money on other investments, Madoff would tell DiPascali, who then fabricated a loss with the motive of reducing the tax bill. In my opinion, I would ay that the join States was able to produce such a person as Madoff because in any event the fact that he had strong connections, his firm was performing well enough in fact it offered job opportunities to Americans, while in many ways contributed to the economic development of the United States.Madoff was also able to cover up his shoddy operations effectively, protecting himself from the authorities. An example of such an instance is when he was able to defend himself from the panel in 1991 during the investigations. (Paltrow) He had a intelligent way to get himself out o trouble. The fact that most people knew him as a philanthropist was enough defense, at least to the mercies. His magnanimous acts like giving donations were just for show, including his donations to the 2008 presidential campaigns, where he funded both candidates.The Madoff object lesson was one of the hardest to be completely uncovered, given that it had been schemed for at least 20 years. It could also be enough reason that Madoff was a clever man since he was able to commit the fraud on his own. If Madoff could have had more funds to pay off his investors in December, then he would have been able to carry on with his Ponzi scheme. His scheme has led to the collapse and period of several organizations that had invested in his operations. Works cited 1) Bandler J. Varchever N. (April 30, 2009) Ho