Madoffs Fraud Case Research Paper Example | Topics and Well Written Essays - 1250 words

Madoffs Fraud Case - Research Paper Example He said that he earned the capital he invested in the business from Far Rockaway as lifeguard earnings. His firm was a major contributor to the growth of Nasdaq and boasts of succeeding in creating a system where brokers who mostly had traded in the New York Stock Exchange could do more business with the Nasdaq. When news that the business executive had been defrauding the investors and that the firm was nothing but a scam went public, it became a shock for most people. The scheme was a well-organized plan by a number of people to convince the regulators, investors, and visitors in the firms’ office that trading was going on while in real since it was not. In fact, there was no trading in the company for most of its life, with Mr. DiPascali an employee, revealing that he discovered that the company was not trading at all since the late 1980s. In addition, the firm also used a program that generated numbers randomly to choose the people to award-trading orders to, which happene d in varying intervals and in different increments. In such a case, it is unlikely for the investors to face charges for being victims of injustice (Efrati, 2009). However, Efrati, (2009) explains that two of the biggest investors in the firm, who had invested and trusted the firm with billions of dollars, got involved in the case, and the prosecution dragged them individually as well as their foundations to court to face charges. Instead of winning sympathy from the prosecutors and the judge, as they faced the charge of conspiring with the managers to defrauding other investors in the company. In a Manhattan court, Peter Madoff confessed among other crimes that he had faked documents and lied to regulators, which helped his elder brother Bernard Madoff to perpetuate the biggest of all investment frauds. The multi-billion dollar fraud scheme, known as the Ponzi scheme, defrauded investors of their invested capital during the collapse of Benard L. Madoff Investment Securities LLC inv estment firm owned by Bernard Madoff. According to his confession in the court, Peter said that the investment sham caught him in shock when his brother told him the truth in the December of 2008 but said that he helped to divert the firm’s remaining funds to friends and family of the Madoffs. The employees forged documents that created a wrong impression of the company as trading and lured them into getting into the contracts and later lost their money. During his confession, Peter apologized for his irresponsible behavior, which is nothing, compared to the number of losses that investors suffered under his watch. For Peter, pleading guilty for his actions did not let him walk free after the judge sentenced him to 10 years imprisonment (Bray & Lauricella, 2009). The sentence also requires him to forfeit all his personal assets that include a Ferrari and more than 10 million dollars in cash. The sentence did not spare his wife and daughter, where he is required to forfeit the ir assets too. According to Peter, Bernard always acted as the boss, without giving his younger brother a chance for dialog. Despite this, he had an option of choosing not to honor his brother’s commands and do the right thing. He contributed to losses estimated at 17 billion dollars, money owned by the company on behalf of the investors, of which he promised to recover 11 billion.