The Case of Bernard Madoff
Problem Statement: Fraud
Summary : This case closely encompasses how Bernie Madoff was accused of creating a scheme that destroyed $65 billion in investments. He single handedly deceived thousands of people including auditors, accountants, and regulators. His scheme deceived so many intelligent people and regulators considered him legitimate. His family, auditors and employees have been under investigation to find out who helped and benefited from Madoff's scheme. Madoff claimed he was the only one at fault however his right hand man explained that numerous businesses new about his scheme and still accepted it and openly violated the law.
Your Solution: My solution to this case is to further continue the investigation and find out who helped Madoff directly and who knew about it and didn't report him. He was a master mind manipulator who knew how to devise a scheme that would deceive investors and still seem legitimate. It was a classic white-color crime where he lied, cheated and stole from thousands of people around the world.
Answer to questions:
The ethical issues involved in the Madoff case was his misconduct and deceitful activity. He lied to investors, cheated out his financial interests, and stole from thousands of people around the world. He took money from new clients and paid it out to existing clients.
I don't believe that Madoff worked alone. Even if nobody helped him deceive investors, people knew about it, and the act of knowing and not reporting a white-color crime is guilty by association. He must have worked out a deal with his auditors just like Enron did with Arthur Anderson.
What should happen to ensure schemes like this don't happen in the future is enforce strict restrictions and regulations. Strict internal controls and compliance standards will detect misconduct.