Madoff Investment Scandal

Running head: MADOFF INVESTMENT SCANDAL
Madoff Investment Scandal
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MADOFF INVESTMENT SCANDAL
Corporate fraud is an unethical tendency that affects all the stakeholders, including
employees, shareholders and customers of a company. It can be best described as an
intentional misrepresentation of the financial condition of a company or simply as activities
undertaken by the management that mislead the people to increase the profit (Soltani, 2014).
The history of corporate fraud dates back to a shocking timeline of 15th century. Since the
dawn of industrial revolution, organizations have adopted unfair means to deceive the people
associated with them for their own interest (Wells, 2017). However, corporate frauds have
affected public and organizations alike. Some organizations have resurfaced after surviving a
scandal, while some of them have collapsed and were compelled to declare bankruptcy. One
of such widely known corporate scandals, called out for ‘cooking up numbers’, is Madoff
investment scandal. It is known as the biggest Ponzi scheme of the world, mishandling
several billions of dollars.
Madoff Investment Securities LLC was a famous investment company that dealt with
stock and securities. Based in the USA, Madoff Investment Securities LLC was founded by
Bernard L. Madoff, the former chairman of NASDAQ. Bernie Madoff started his company in
1960, at an early age of 22. Initially, he used to trade penny stocks with $500 as per the
market price of 1960s. Gradually, the business started expanding with the help from his
father-in law (Ragothaman, 2014).
Started out as a small investment management firm, Madoff Investment Securities
LLC grew to be a giant of the American stock market. The main reason behind the rise was
the innovative information and communication technology (ICT) used by the company to
disseminate competitor organizations’ quotes. Moreover, the technology that the firm used
eventually became the famous NASDAQ shortly after a trial run. This particular feature of
then firm asserts the amount of authority and significance Madoff Investment Securities had