The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.
“Most people in the U.S. want to do the right thing, and they want others to do the right thing. Thus, reputation and trust are important to pretty much everyone individuals and organizations. However, individuals do have different values, attributes, and priorities that guide their decisions and behavior. Taken to an extreme, almost any personal value, attribute, or priority can “cause” an ethical breach (e.g. risk taking, love of money or status, winning, flexibility, etc.)” (Crews).
In Kramer’s article he explains that Bernie Madoff used the value of trust in an unethical way. Kramer explains that transitive trust can persuade people into a false sense of security. Kramer also states that evidence suggests that Madoff was very good at cultivating and exploiting social connection (Kramer 70. This quite simply means that we trust easily and this is not always a good thing; Madoff used people by getting them to trust him, like the Jewish community he was a part of. Simply put, Madoff got people to trust him even though he was untrustworthy (Kramer 70). The previous evidence explains how the Madoff scandal occurred due to trust. Madoff clearly got many people to trust him. It seems as though “trust” is a very primitive value, almost second nature, and when we trust people too easily that are not trustworthy, we fall into their trap, and we engulf ourselves into a false sense of security. For instance, the investors trusted that Madoff was correctly investing their money and that the returns printed on the statements they received were correct, the SEC trusted that he was not scheming, and the individuals who were in on the scheme with him trusted that he...