Bernie Madoff Case Study

Bernie Madoff Case Study

Did the Bernie Madoff sons turned him in because he did something wrong, and they knew it? Or did they turn it in to protect themselves?

Bernie Madoff’s sons turned him in to protect themselves because Bernie confessed to them that his company was running a Ponzi scheme, and they did not want the public and the FBI to assume that they were involved in their father’s scheme. The elder brother, Mark Madoff, did not want anything to do with the scam. When he was associated with the scandal after their father was exposed and arrested by the FBI, he became devastated and committed suicide two years after his father was arrested (CNBC Prime, 2021).

Does the SEC have vicarious liability for the respect of the money of its investors?

The SEC have vicarious liability for the respect of the money of its investors. The liability is divided into aiding and abetting, respondent superior, and conspiracy liability (Steinberg, 2020). SEC regulations state that individuals who know or should have known about fraud and offered substantial help to the primary wrongdoer could be liable as abettors and aiders. The regulations also state that individuals could be liable if they conspired with the primary wrongdoer. The respondent’s superior liability includes imposing liability on individuals controlling the primary wrongdoer.

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Was this ultimately a conspiracy?

The Bernie Madoff scheme was not an ultimate conspiracy because only Bernie knew that his investment was a Ponzi scheme. He used investors to get money to run the scheme whenever he had a cash crisis which is why nobody noticed that there was something wrong. During the investigation, his younger brother, Peter, who was the Chief Compliance Officer at Madoff’s company, the investigators did not find any proof that Peter knew that the investment scheme was a Ponzi scheme (CNBC Prime, 2012).

Because the feeder investors were people who put their money with Bernie and made huge commissions. Which is two or more people committing a crime. Did all the feeder groups know and not say anything? Should that be considered a Rico case?

The feeder investors did not know that Madoff was running a Ponzi scheme because he always ensured they got their commissions. Therefore, they may have assumed that the Madoff investment scheme was a good investment generating high profits. Although the case should be considered a RICO case because some investors, such as Medici Enterprise, are criminal organizations, Judge Jed Rakoff stated that there was not enough evidence to conclude that Madoff’s investment scheme funded organized crime (Smith, 2012). However, if sufficient evidence connecting the investment scheme to organized crime activities were available, Madoff would be charged under the Rico Act.

References

CNBC Prime. (2021). Bernie Madoff: American Greed’s Biggest Cons [Video]. YouTube. https://youtu.be/km3Iu8G0JjA

Smith, A. (2012, February 22). Judge tosses another claim in the Madoff case. CNNMoney. https://money.cnn.com/2012/02/22/news/companies/madoff_ponzi/index.htm

Steinberg, M. I. (2020). Securities regulation: Liabilities and remedies. Law Journal Press.

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Did the Bernie Madoff sons turn him in because he did something wrong and they knew it?

Or did they turn it in to protect themselves?

Bernie Madoff Case Study

Does the SEC have vicarious liability for the respect of the money of its investors?
Was this ultimately a conspiracy?
Because the feeder investors were people who put their money with Bernie and made huge commissions. Which is two or more people committing a crime. Did all the feeder groups know and not say anything? Should that be considered a Rico case?