How does a Ponzi scheme work?
t'is you paying old investors whence the money thou taketh from new investors.
How do you think Bernie Madoff was able to keep his scheme going for so long? (Why did they not catch on?)
People who participated said they were making money, so more victims sucked in believing it was safe and put money of their own in.
What type of person is a “Ponzi Person”(characteristics, personality)
One with no cares of consequences for others. One who sees the perfect victims. Madoff did an ok job at getting those who believed in the economy continuously booming, who wanted to get rich quick. Madoff spotted out those people pretty good.
Why do you think the SEC did nothing after warnings about him?
A couple of reasons. 1. According to Markopolos, people at his firm and around him "...bought into the story. They bought into his patina of respectability that he was a market maker — one of the largest on the street. They thought he was a Wall Street titan, and they had no reason to doubt him." Madoff had the reputation. 2. Madoff worked on a board at the SEC. 3. There are a lack of resources at the SEC and were understaffed to investigate any matter.
Why do you think he did it?
I think he really wanted to make those consistent 1.5% returns a month to his investors. He got too cocky with what realistically he was capable of doing. So when he found out he couldn't, he created the scheme to hide his weaknesses, his shortcomings. It was simply ego.
also add two new facts from your research about either ponzi schemes or Bernie Madoff
In the words of Diana B. Henriques, who interviewed Madoff in prison, "The week of his arrest, he had about $300 million left in the bank, a private jet available at a nearby airport, and an ocean-going yacht moored with a full crew in the South of France. But all he did was make a date with a lawyer for the following week." Of course, after he turned himself in. "He made no attempt to flee — he says it simply never occurred to him, and on that one point, at least, he may have been telling the truth. All Ponzi schemers seem to maintain a weird balance between cold-blooded rational calculation, on the one hand, and self-delusional fantasy on the other." It is most interesting to me how he could of just flee, yet turned himself in. Like, what if there is guilt inside him that pushes him to punish himself? What was the concrete reason for him to stay, morality or lack of thinking far ahead?
Bernie Madoff is the only Wall Street criminal to face time. In my opinion, most likely because he stole from the rich and not the poor. If it was otherwise, the powers that be wouldn't care that much.