How wrong was the Madoff hustle?

How wrong was the Madoff hustle?

The Madoff hustle was constructed by Bernie Madoff and was the biggest scam in US history, with an estimated of 64 billion dollars stole from the public and even family and friends. The fraud was uncovered around the credit crunch in 2009 and Bernie has been sent to jail for the rest of his life as punishment. In this blog, I’m going to focusing on how he scammed so many people and the ethics of his decisions.

How is it possible to commit fraud of such a vast level?

The method Bernie used is called Ponzi scheme and this scheme is quite commonly used, as its surprising to me how easily they can get away with it. Bernie started with a legit stock brooking business and was known for having the technology that allowed him to buy stock way before competition, but as the rest of the competition developed, this caused Bernie to lose his niche. I feel like the high pressure on Bernie from the wall street market caused him to make the bad decision of using the Ponzi scheme. Bernie was described as good standard of wall street and a good family before discovered as fraud and this is what made him pull off the Ponzi scheme so well. The Ponzi scheme consisted of Bernie selling share of his business to the public and taking their investment but instead of investing into his business he would just pocket some of it and slowly give them their own money back. All Ponzi scheme eventually dry up of money as too many people request pay outs. However, the reason why Bernie lasted so long was that he had such a good reputation and trust, people kept investing in him meaning he could keep the money pool high. I personal think that the Ponzi scheme is a very poor decision because eventually its going to collapse meaning that there are only going to be short term benefit of it and the long-term affect means they will lose their lifestyle and all the money they gained. Another way he kept people hooked as investors was that he faked his share value by having a healthy percentage increase each year so people thought that it was a safe rate of return, even if it wasn’t that high. I have used a stock market simulator that mirror the real stock markets and I’m surprise that people believed that Bernie’s business was legit because the shares in that simulator never stayed constant. Bernie was also very exclusive with his business and because it was so hard to become a part of people felt honoured when offered so they didn’t ask questions. He had a level in his building where only selected members were allowed and this was where he made all the fake share deals that he sent to investors to keep them hooked. Bernie was discovered when the credit crunch hit in 2009 as some many of his investor requested a pay out and this caused all the money to dry out.  

How unethical was the Madoff Hustle?

There is no hesitation that the actions of Bernie were unethical, as he stole 64 billion from all kinds of people. But one of the ones I was shocked most about was the fact that he stole from multiply charities and one of the most know ones was the foundation of humanity and he cleared them out and stole 15 million dollars off them. This was base of the fact that people felt the security was good when investing with him and this made it easy for big corporation to invest. The most unethical thing about this is that all that money would have been used to help people that are in need and as Bernie had multiply homes in different location, he was defiantly not in need. I have recently been involved with the Anthony Nolan trust and I have become a match and started the process of donation my steam cells. If I got a call from them saying they can’t afford to carry on with the process as all their donation have been stole by Bernie, then I would have been outraged. I personal think that stealing from charities is a new level of being unethical. Another target of Bernie was the elderly as they have vast amount of money store in pension schemes just sitting there, so it was easy to convince them with the safe return rate. This forced pensioners out of retirement and caused them back into work as they no longer had a pension to relay on. This even cause an ex solider to kill himself, Bill Foxton had survived multiply missions and won multiply awards for defending his country and Bernie still happily took his money knowing that he wouldn’t be able to give it him back. This seem so unethical to me as they would have work all their life to build that pension and Bernie lied to them and stole it from them. As I watch the documenter on the Madoff Hustle I started to see that Bernie had no ethics at all as he was also seen to scam some of his own friends and family. But even through what he did was incredibly wrong, I couldn’t help thing how convincing and prepared he must have been to keep it going for so long. Bernie started off by asking investment off people in the local area as they were a wealthy area and after the fraud was discovered the area had a sudden increase in resell business as people was forced to sell expensive belongings. This seems very unfair to me as some of them items would have had a lot of meaning to the owner and they would have had to lose them to improve their security. The surprising part was he would of do this knowing that he would have to interacting with them as they lived in their local area, he would have had to be an amazing actor to hide such a big secret and have no remorse in his body. Bernie was also a part of a big Jewish community and a lot of them trusted him enough for them to invest into his business and they feel like he dishonours Jewish people and gave them a ban name. A lot of the victims might use the fact that he is Jewish and spread the blame across to other Jewish people and Bernie still didn’t care. This would of also had major impacts on business that are associated as even if there were not involved with the crime, they would of lost vast amount of customers as they would have been seen to have no ethics. For me there is only two ways that Bernie had the morels to commit the fraud he did, and this is the fact that he didn’t have any idea of the repercussions of his action or that he is one of the most unethical people in history.

Overall, I feel like the Ponzi scheme is a very unethical way of making profit and Bernie took it to a new level by targeting charities and elderly as they would be unaware of this scheme. I feel like the scheme is a very suicidal method for the constructing a business, because there is no way that they are going to get away from it, so I struggle to see why they would do it. Before viewing the Madoff Hustle, I had the mid set that ethics wasn’t a very important part of business management, but I was surprised how even the most trusted business could act so unethical. This seen very similar to the blog I did off the inside job and Goldman sax and all the other banks that scammed people and used the trust they had against them. From this I have learnt that even if the business is trusted worldwide it doesn’t mean that their ethics are right and a lot of CEO and founders of business are willing to make decisions that cause other people to suffer for the benefit of their business. This also relates to the blog that I mentioned about the cooperate psychopaths because the unethical decision is normally made by one person and the rest are just unaware of what they are contributing to. They gain such a drive from gaining power and profit they are willing to put other people in distress to benefit themselves.