A Wall Street legend, Bernard Madoff, has been sentenced to a maximum of 150 years in prison (David Teather, guardian.co.uk) for fraud, theft and money laundering. The president of the board of directors of NASDAQ, a 70 year-old financier, a well-known and trusted stockbroker turned out to be an icon of financial crime. For decades, Bernard Madoff managed to operate a $65bn (“Bernard Medoff gets 150 year sentence”) ‘Ponzi’ scheme that devastated lives and ruined hopes of thousands of investors.
The roots of the scam of the century (“Bernie Madoff`s Crime and Punishment”, cnbc.com) may be traced back to the 1960, when Bernard Madoff started his own investment firm - Bernard L. Madoff Investment Securities, LLC. (“Bernard Madoff.biography”). With the help of Bernard Madoff in laws, Madoff Securities attracted wealthy clientele by delivering steady, consistently positive returns through the stock exchange. Even during the turbulent times on the market, Madoff`s clients received profits. Bernard L. Madoff Investment Securities boasted of an “unblemished record of value, fair-dealing and high ethical standards”.(Tomas Zambito, Greg B. Smith, Daily News, Saturday, December 13, 2008, NYDailyNews.com). Over the years, excellent reputation of Bernard L. Madoff Investment Securities lured not only individual investors, but big celebrities, such as Steven Spielberg, Kevin Bacon and wife Kyra Sedgwick, Eric Roth, etc, banks - UniCredit SpA, Nordea Bank AB, Groupama SA, etc, hedge funds and charities - J. Gurwin Foundation, Fairfield, Conn., Chais Family Foundation, etc ( “Madoff”s victims”).
In 2008, despite all the success of the highly respected financial expert, Bernard Madoff confessed that the actions of Madoff`s Securities were all just a big lie (“Bernie Madoff’s Crime and Punishment”). A financial mastermind pulled off what can be called a very successful ‘Ponzi’ scheme that defrauded his clients for billions of dollars. The pyramid scheme, Madoff operated, involved the payment of the profits to existing investors using the funds provided by new investors. In a word, Bernard Madoff focused on attracting new investments to pay back returns to earlier-stage clients. The pyramid collapsed with the decline of stock market that caused Madoff to confess in his long-lasting fraud. He saw no solution to a dilemma of having to pay his clients an amount of money his funds did possess. However, who knows how long would have lasted the fraud if Madoff did not report his lie. How is it possible that the largest scam in the U.S. history was not revealed?
The information about Madoff Securities` services being under the doubts of various financial analysts in the late 90`s circulated in various media sources (“Madoff Scandal”). Financial analysts believed that the returns claimed by the company were impossible, but the Securities and Exchange Commission (SEC) ignored the doubts, and failed to uncover Madoff`s crime. Instead, SEC failed to pursue the complaints with evidence that Madoff was operating a ‘Ponzi’ scheme, and brief, limited resulted in examinations performed by relatively inexperienced SEC team, gave green light to Madoff, who continued with his operations for almost another 10 years. Madoff pulled off scheme cheating upon thousands of investors and he did it right in front of SEC, a federal organization that had no clue about the dramatic role they played in continuance of the scam.
Perfectly operated Madoff`s ‘Ponzi’ scheme stunned the economic world. The fraud of the century affected thousands of investors who lost their life savings and now live with the hope to receive payouts of at least some investments. Madoff`s Security managed to con not only multi millionaire clients ranging from celebrities to giant business tycoons, and banks, but the company also received investments from physical individuals and charitable organizations. Even though rich investors faced heavy losses, the damage is less catastrophic; not all of their savings were invested into Madoff`s Securities. However, many senior citizens were wracked by Madoff`s fraud; in this case, it was a serious crime to use the life savings of people who are now on the edge of poverty, looking for the ways to survive. Whole families fall under Madoff`s victims: pension funds, college funds were invested with Madoff (“Bernie Madoff`s Crime and Punishment”), and now when the bubble burst, everything is gone. Many are left with nothing. Along with individuals, many charitable organizations also were not saved from the wrongdoings of Madoff`s Securities; several of them have already shut their doors and fired their staff. Even if there were no direct exposure to Bernard Madoff Investment Securities LLC, still many branches and subsidiaries would be hit by Madoff related losses.Want an expert to write a paper for you Talk to an operator now
A greedy and dishonest old man, throughout his whole career, had transferred around $170 million of his clients’ money to his private accounts. Bernard Madoff lived the life of luxury, and never thought of what could have happened to his pyramid scheme until it collapsed. Madoff`s ‘Ponzi’ scheme triggered the domino effect that affected organizations and people from the top to the bottom. When one of the economic links breaks the whole economy suffers. Madoff`s Securities collapsed and created the destructive wave that caused the economic system to fail.
Bernard Madoff’s name is still legendary – he is the finance criminal of the century. By pulling off wildly successful hoax, his name is carved in memories of many those who burned their lives by trusting Bernard L. Madoff Investment Securities, LLC.
- The Beauty Bar, a world known hair care brand, launched a new ad campaign “We Care for Your Hair” to falsely represent a new line of organic hair shampoos and conditioners OrgaLine with 100% all natural ingredients. The campaign`s philosophy was based on reconnecting people and their bodies with the environment by using only plant’s and fruit’s natural bioactive molecules and no pesticides, chemicals, mineral oils, genetically modified ingredients, parabens and synthetic fragrance and/or color. The OrgaLine advertisement claimed that their hair care products made the hair flawless and gave just out of the salon look for the lower price. However, the OrgaLine was not all organic made, instead it contained Sodium Lauryl Sulfate, which caused skin irritation, damages to the eyes, and was responsible for early hair loss in both men and women. The price, which was set to be lower, turned out to be higher. What Beauty Bar did, is that it labeled their hair care products to include all natural ingredients, while the shampoo formula contained synthetic foaming agents and petrochemicals. In order to make their campaign successful, The Beauty Bar used false information to give their products qualities they did not possessed.
- BabyBoo, Inc filed a complaint against Bambi Food, Inc for fraud and deceit, unfair misrepresentation and unlawful business practice. BabyBoo, Inc complaint alleged that Bambi Food, Inc falsely represented various “B-Formula” baby foods to be all natural, organic and non-GMO food products, made from fresh, just picked out of the garden fruits and veggies to satisfy even the pickiest eaters. Bambi Food Inc stated that their baby food products were full of nutrients, reasonably priced, easy to prepare, and delicious. BabyBoo, Inc believes that healthy eating habits start to develop with child’s first foods, and they play a key role in preventing obesity. BabyBoo, Inc bought “B Formula” in reliance upon its labeling and advertising representation to provide mothers with the healthy choice of food for their babies, and help develop healthy eating habits. However, the “B Formula” products turned out not to be fresh, but instead were made from frozen fruits and vegetables, contained flavor and color enhancers, were high in sodium, sugar or both. Some of the products were classified as high in sodium, and were targeted to the toddlers.
- ArGa Pharmaceuticals started selling Fit&Slim, a new drug that helps people lose weight. In order to sell the product, and help people fight with extra calories, and shrink back to size Small, ArGA Pharmaceuticals claimed to be the first prescription weight loss drug approved by the FDA. ArGA Pharmaceuticals stated that Fit&Slim was approved as an addition to dieting and exercising, for the use in chronic weight control. Fit&Slim packages had FDA approval labeled and claimed to be harmless and with no side effects. However, The FDA denies the approval; and states that ArGA Pharmaceuticals misrepresented the certification of Fit&Slim. Not only does FDA deny the approval, but prohibits the sale of Fit&Slim, as the drug is dangerous if used, and it may cause heart attacks and stroke risks.
- Fozzy Team, Inc. is a corporation engaged in commercial distribution and possession of Software Programs. For years, Fozzy Team, Inc shared a reputation of being the best and most trusted among its clientele for providing the top licensed software. However, Fozzy Team, Inc was accused of distributing software without authorization. The corporation was accused of making copies of software programs and selling those pirated copies in a licensed package. The software program either was impossible to install or worked improperly. A new window popped out every time the software run and asked for license number to continue, and in order to get the number, clients had to return to Fozzy Team, Inc and buy a license again. The pirated software programs, although they were pirated, were sold for the price of licensed software, and plus customers had to pay additional price for license number, which was supposed to be free when software was bought the very first time. Fozzy Team, Inc’s costumers accused the corporation of distributing or possessing for distribution various copies of pirated, unlicensed software programs falsely labeled as licensed.
- A CEO of Mountain High, Inc Mr. X being dismissed from his duties, started to distribute bulletins with improper information about the corporate clients, and negative statements about the company’s actions. Mr. X affected by the company’s decision to fire him, spread out the data information of the financial difficulties of the company, made public personal information of the clients, and criticized the malfunctions of the corporation and poor working environment. When Mr. X received an offer to work for the competitor of Mountain High, Inc, with the condition to give out all the necessary information to undermine the reputation of Mountain High, Inc, Mr. X did not think twice, and burned his former employer to dust. However, Mountain High, Inc did not give up, and on behalf of their clients, sued Mr. X for false and misleading representation of company facts and personal information.
- Customers of the FashionistA Store sued the store owners for unauthorized substitution of authentic Gucci leather purses with the counterfeit products. All the Gucci bags came with a high price tag, and were advertised as the great investment for the future if the customer planned to keep the bag for a long time. The interior label of the bag stated ‘Made in Italy’, and the Gucci logo on a monogram bag was two letter Gs with one upside down like in the authentic purse. However, the customers found out about the fraud by looking at the handles and piping that should have been genuine leather, but turned out to be pleather. Few customers noticed the signs of poor workmanship, such as cracking, and the stitching was not flawless like it should have been, random threads were popping out. The FashionistA Store tried to sell low cost Gucci bags for the price of the authentic ones to maximize their profits.
The citizens of New York City filed the complaint against the Safe and Sound Insurance Company (SSIC). SSIC philosophy was to secure financial support if faced with any untoward incident. But instead, SSIC failed to support their clients in the time of hardship. NYC citizens reported that each of them was sold homeowner insurance issued by SSIC which covered real and personal property owned by them. When buying home insurance, the plaintiffs thought they have bough protection for their homes. While, during the hurricane Sandy, everyone suffered from damage of the amount of such damage differed relative to everyone who suffered. Prior to 2011, before New York felt the destructive power of hurricane Irene, SSIC provided hurricane coverage as an endorsement to its homeowner policies, and all minor damages were payed off, but in that year after the hurricane, SSIC changed their policy to cover only the damages caused by wind that resulted in no coverage caused by water. However, the SSIC did not inform their clients about the policy change and did not reduce the coverage fee clients had to pay. The plaintiffs being unaware of policy changes believed that they would receive the same post hurricane coverage they received prior to 2011. However, devastated by hurricane Sandy, SSIC insurance owners received minor coverage for minor damages. Plaintiffs believe that SSIC reduced its level of responsibility by implementing the new policy, but continued to earn the same premium income, and maximized their profits.