Madoff Questions By: Emmy Coburn

Question 1: A Ponzi scheme is a investment scam where Investors are promised high profits. This works by constantly bringing in new investors. The money from the constant investors helps to pay back the old investors. In reality there are no legitimate transactions being made in the process.

Question 2: In Madoff's schemes a lot of things went into making bit believable. For one thing Madoff was always made out to be a good and active member of the financial industry. He was involved with charity, he started his own business. These things led people to believe he was good man ,and could never be involved in a big scheme. Also Madoff played a big part in the SEC as an advisor. Him being apart of the SEC made people trust him. Overall he got away with it because he was good at what he did. He got involved so people got to know him as this smart business man.

Question 3: Ponzi schemers are usually very charming people. You meet them and you automatically fall in love with their personality. They come off as smart, and trustworthy of your money. That's part of the reason these ponzi schemes work so well. The schemers are nice, and funny. You would never suspect a problem.

question 4: I believe there are a lot of reasons the SEC didn't consider the warnings about Madoff. Harry Markopolos tried to show people that Madoff's business stability was not logical or realistic, but people failed to acknowledge this. One reason they most likely ignored these red Flags was because Madoff had no other complaints from clients or anyone else really. The SEC also personally knew Bernie, and didn't waste their time investigating someone who they assumed was doing only good things despite the warnings. Bernie to them was a trustworthy guy, and they had no actual proof that he was a fraud therefore they didn't bother further looking into his scheme.

Question 5: Bernie Madoff's investment company I believe originally began with good intentions. He wanted to be good at his job and make a nice profit. He promised people what he thought was possible, but then realized it wasn't possible. Though for him failing wasn't an option, so he discovered a way to make it "work". He made lots of money and could live happily with a well working company. In the end of it all I do think Bernie began to focus on one thing and that was the money. he could have cared less about the clients. Throughout his process his main focus of his company dramatically changed. He wanted as much as he could handle and he was willing to scam others to make it happen hoping he wouldn't get caught. Bernie took a life risk and it failed in the long run.

Interesting facts: Did you know Bernie Madoff started his firm with $5,000 that he earned working as a lifeguard.

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