Madoff Questions Ethan devoe

What is a ponzi scheme?

A ponzi scheme is where a head operator takes in money from investors saying he'll give them great returns, but uses new investors' money to pay the old ones. This cycle goes on until the operator runs out of new investors (no new money to pay the old ones) or a drop in the economy reveals the scheme.

Impossible to sustain indefinitely

How did Madoff keep his scheme going for so long?

The prosperous economy made Madoff's falsified returns seem more realistic to investors.

His charming personality made him seem like an unlikely candidate to be a fraudster.

Madoff also served on several committees that kept him in the know about regulations and anyone that might be suspicious of his operation.

Who is a "Ponzi Person"?

Ponzi schemers are often described as very kind and likable. People who knew Madoff thought of him as very dependable and someone who they could trust.

The SEC did nothing after after the warnings about him because they knew and liked him personally. He even sat in on committees with regulators, making him seem a very unlikely suspect.

Why'd he do it? While no one could know for sure, I would assume that it was merely for profit. There's nothing morally acceptable about what he did, so greed is the only logical motive i could think of.

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Created with images by TBIT - "dollar bank note money"

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