...Case Study Bernie Madoff’s Ponzi Scheme: Reliable Returns from a Trustworthy Financial Adviser By Denis Collins Denis Collins is a professor of management in the School of Business at Edgewood College in Madison, Wisconsin. His research interests include business ethics, management, and organizational change. Contact: dcollins@ edgewood.edu A [person] is incapable of comprehending any argument that interferes with his revenue. Rene Descartes Overview This case study is a chronology of the largest Ponzi scheme in history. Bernie Madoff began his brokerage firm in 1960 and grew it into one of the largest on Wall Street. While doing so, he began investing money as a favor to family and friends, though he was not licensed to do so. Over a period of fifty years, these side investments became an investment fund that mushroomed into a $50 billion Ponzi scheme. Bernie1 pled guilty without a trial on March 12, 2009, and was sentenced to 150 years in prison. Thousands of wealthy clients, philanthropic organizations, and middle-class people whose pension funds found their way into Bernie’s investment fund lost their life savings. What to Do? Bernie Madoff, at age 69, owned three very successful financial companies—a brokerage firm, a proprietary trading firm, and an investment advisory firm. On December 10, 2008, the brokerage and proprietary trading firms, managed by his brother and two sons, were performing as well as could be expected in the middle of a deep recession. His investment...
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...Case Study: Bernie Madoff Eric Ranzinger Organizational Behavior – OL 500 Jascia Redwine Abstract Bernie Madoff was one of the top dogs on Wall Street for over 20 years. He managed tens of billions of dollars in client’s funds. His firm was one of the most consistent with profitable returns. When most others were reporting losses during the recession, his firm was consistently reporting net gains. Many celebrities even entrusted their money with Madoff because he was such a reputable name on Wall Street, being the former head of NASDQ. In December of 2008, Madoff turned himself into the authorities because his operation was just a giant Ponzi Scheme. His investors were scared of losing more money in the recession so they tried to cash out. Since he had been defrauding investors for years he was not able to keep up with demand. He ended up losing a total of 17 billion dollars by providing his clients with false reports. There were many red flags dating back to the late 80’s that should have tipped the authorities. Many Wall Street executives knew that Madoffs firm was fraud and did not try to bring him to justice. This is unacceptable. His scheme should have been shut down years ago before it got this bad. There are several solutions available to assure that this type of fraud does not happen again. In my case analysis, we will dig into each option in depth. It will be clear that the best option that needs to happen is to make the SEC adhere to their responsibility...
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...giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time. These types of financial schemes promise investors large interest returns if they provide money as a loan. As more new investors participate, the money that is contributed by later investors is paid to the initial investors, allegedly at the promised interest on their loans. This method works initially, but will then fold as more investors participate and choose to take withdrawals. Though these types of schemes have happened before, the first of this caliber was documented in the 1920’s by its namesake, Charles Ponzi. In 2008, Bernard “Bernie” Madoff was exposed for running the largest Ponzi scheme to date, conning investors out of over $65 billion over thirty years. INTRODUCTION Bernard Madoff was responsible for the largest reported Ponzi scheme in history. How did this happen? Who else knew about it? Why did it take so long for him to be exposed? This paper will endeavor to answer all of those questions and more. This paper will offer dialogue into how Madoff’s scheme differed from a traditional Ponzi scheme and understand the ethical, emotional and financial fallout to those closest to him. It is also important to understand the psychology involved in those who choose to construct a financial scheme. I will also provide some discussion around the issues concerning the SEC and how they...
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... with respect to the rightness and wrongness of certain actions. This definition explains that ethics are a nothing more than an indoctrinated human behavior that is base on their environmental, social, or cultural backgrounds. Humans are therefore, inherently flawed and thus, ethics becomes a huge issue in their lives as they attempt to make up for these flaws. How humans act in a given situation or how they feel about their actions, play into how they conduct themselves in their personal and business affairs. Killing, raping, and stealing are examples of such obvious actions that most people would agree are unethical. This relates to the subjective belief of rather Bernard Lawrence "Bernie" Madoff should remain in prison or out on bail because of the practicing of Ponzi schemes because it lies in the not so obvious realm of behavior. Why? There is no essential difference between someone who steals $5 and someone who steals billions it is all the same, however, in the criminal justice system the belief in crimes at different levels are arranged at different social and cultural standards. White collar vs. blue collar White collar crime is particularly interesting it provides a sharp contrast to the common crimes and street criminals that usually attract the attention of people. A white-collar is associated by individual of a higher social class. Some of the crime can be characterized as any antitrust violations, computer and internet fraud, credit card fraud, phone and telemarketing...
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...Intelligence and Emotional Intelligence: Toward a More Intelligent View of Intelligence Assessing Intelligence Variations in Intellectual Ability Exploring Diversity: The Relative Influence of Genetics and Environment: Nature, Nurture, and IQ Psychology on the Web The Case of . . . Mike and Marty Scanlon, the Unlikely Twins Profiles of Success: Raymond J. Matlock Full Circle: Personality and Individual Differences module 31 Assessing Personality: Determining What Makes Us Distinctive Self-Report Measures of Personality Who was the Real Bernie Madoff? To some, Bernard L. Madoff was an affable, charismatic man who moved comfortably among power brokers on Wall Street and in Washington. He secured a long-standing role as an elder statesman on Wall Street, allowing him to land on important boards and commissions where his opinions helped shape securities regulations. And his employees say he treated them like family. There was, of course, another side to Mr. Madoff. Reclusive, at times standoffish...
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...Chapter 1 Ethical Reasoning: Implications for Accounting Ethics Reflection PENN STATE CHILD ABUSE SCANDAL: A CULTURE OF INDIFFERENCE What motivates an otherwise ethical person to do the wrong thing when faced with an ethical dilemma? Why did Joe Paterno and administrators at Penn State University look the other way and fail to act on irrefutable evidence that former assistant football coach Jerry Sandusky had raped and molested young boys, an offense for which Sandusky currently is serving a 30- to 60-year sentence? According to the independent report by Louis Freeh that investigated the sexual abuse, four of the most powerful people at Penn State, including president Graham Spanier, athletic director Timothy Curley, senior vice president Gary Schultz, and head football coach Joe Paterno, sheltered a child predator harming children for over a decade by concealing Sandusky’s activities from the board of trustees, the university community, and authorities. The Freeh report characterizes the inactions as lacking empathy for the victims by failing to inquire as to their safety and wellbeing. Not only that, but they exposed the first abused child to additional harm by alerting Sandusky, who was the only one who knew the child’s identity, of what assistant coach Mike McQueary saw in the shower on the night of February 9, 2001.1 McQueary testified at the June 2012 trial of Sandusky that when he was a graduate assistant, he walked into the locker room and heard sounds of slapping...
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...Week 1 |[pi|Week 1: Business Ethics and International Responsibility (May 1 - May 8) | | |[pic]|Help |[p| |c][| | | | | |ic| |pic| | | | | |] | |] | | | | | | | | | | Week 1 Introduction Hi! It's Week 1, and we're set to go. This course is perhaps a little different from the typical MBA course. Rather than studying the internal workings of a business, we shall instead delve into the legal, political, and social cultures of our city, nation, and world and see how these affect everything we do in business. We shall study the gamut of legal concepts, from product liability, to civil rights, to intellectual property rights, to antitrust and consumer protection. Underpinning all of these legal concepts, however, will be two foundational aspects: (a) the ethical issues within, and (b) the "world view" without. Milton Friedman, Immanual Kant, Blanchard and Peale, Laura Nash . . . these are just a few of the names of ethicists and...
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...HOW CAPITALISM WILL SAVE US Why Free People and Free Markets Are the Best Answer is Today's Economy S T E V E FORBES and E L I Z A B E T H A M E S HOW CAPITALISM WILL SAVE US HOW CAPITALISM WILL SAVE US W h y Free People and Free Markets A r e t h e Best A n s w e r i n Today's E c o n o m y Steve Forbes AND ELIZABETH AMES CROWN BUSINESS ALSO BY STEVE FORBES Power Ambition Glory (coauthored with John Prevas) Flat Tax Revolution A New Birth of Freedom To the millions of individuals whose energy, innovation, and resilience built the Real World economy. Their enterprise, when unleashed, is always the answer. Copyright © 2009 by Steve Forbes and Elizabeth Ames All rights reserved. Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. www.crownpublishing.com CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Forbes, Steve, 1947How capitalism will save us / Steve Forbes and Elizabeth Ames.—1st ed. p. cm. Includes index. 1. Capitalism—United States. 2. United States—Economic policy. 3. United States—Economic conditions. I. Ames, Elizabeth. II. Title. HB501.F646 2009 330.12'20973—dc22 2009032751 ISBN 978-0-307-46309-8 Printed in the United States of America DESIGN BY BARBARA S T U R M A N 1O 9 8 7...
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...23 Things They Don’t Tell You about Capitalism HA-JOON CHANG Department of Economics, Cambridge University 23 Things They Don’t Tell You about Capitalism HA-JOON CHANG ALLEN LANE an imprint of PENGUIN BOOKS Published by the Penguin Group Penguin Books Ltd, 80 Strand, London WC2R 0RL, England Penguin Group (USA) Inc., 375 Hudson Street, New York, New York 10014, USA Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario, Canada M4P 2Y3 (a division of Pearson Canada Inc.) Penguin Ireland, 25 St Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd) Penguin Group (Australia), 250 Camberwell Road, Camberwell, Victoria 3124, Australia (a division of Pearson Australia Group Pty Ltd) Penguin Books India Pvt Ltd, 11 Community Centre, Panchsheel Park, New Dehli – 110 017, India Penguin Group (NZ), 67 Apollo Drive, North Shore 0632, New Zealand (a division of Pearson New Zealand Ltd) Penguin Books (South Africa) (Pty) Ltd, 24 Sturdee Avenue, Rosebank 2196, South Africa Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England www.penguin.com First published 2010 Copyright © Ha-Joon Chang, 2010 The moral right of the author has been asserted All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording...
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...Para os meus pais, porque "o valor das coisas não está no tempo que elas duram, mas na intensidade com que acontecem. Por isso existem momentos inesquecíveis, coisas inexplicáveis e pessoas incomparáveis" como vocês! Obrigado por tudo, Filipe Abstract The Retail Banking Industry has been severely affected by fraud over the past few years. Indeed, despite all the research and systems available, fraudsters have been able to outsmart and deceive the banks and their customers. With this in mind, we intend to introduce a novel and multi-purpose technology known as Stream Computing, as the basis for a Fraud Detection solution. Indeed, we believe that this architecture will stimulate research, and more importantly organizations, to invest in Analytics and Statistical Fraud-Scoring to be used in conjunction with the already in-place preventive techniques. Therefore, in this research we explore different strategies to build a Streambased Fraud Detection solution, using advanced Data Mining Algorithms and Statistical Analysis, and show how they lead to increased accuracy in the detection of fraud by at least 78% in our reference dataset. We also discuss how a combination of these strategies can be embedded in a Stream-based application to detect fraud in real-time. From this perspective, our experiments lead to an average processing time of 111,702ms per transaction, while strategies to further improve the performance are discussed. Keywords: Fraud Detection, Stream Computing, Real-Time...
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...Para os meus pais, porque "o valor das coisas não está no tempo que elas duram, mas na intensidade com que acontecem. Por isso existem momentos inesquecíveis, coisas inexplicáveis e pessoas incomparáveis" como vocês! Obrigado por tudo, Filipe Abstract The Retail Banking Industry has been severely affected by fraud over the past few years. Indeed, despite all the research and systems available, fraudsters have been able to outsmart and deceive the banks and their customers. With this in mind, we intend to introduce a novel and multi-purpose technology known as Stream Computing, as the basis for a Fraud Detection solution. Indeed, we believe that this architecture will stimulate research, and more importantly organizations, to invest in Analytics and Statistical Fraud-Scoring to be used in conjunction with the already in-place preventive techniques. Therefore, in this research we explore different strategies to build a Streambased Fraud Detection solution, using advanced Data Mining Algorithms and Statistical Analysis, and show how they lead to increased accuracy in the detection of fraud by at least 78% in our reference dataset. We also discuss how a combination of these strategies can be embedded in a Stream-based application to detect fraud in real-time. From this perspective, our experiments lead to an average processing time of 111,702ms per transaction, while strategies to further improve the performance are discussed. Keywords: Fraud Detection, Stream Computing, Real-Time...
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...Heat Wave - Richard Castle file:///C:/Users/zainab/Downloads/Richard.Castle_Nikki.Heat.01_Hea... 1 of 110 05-05-2013 19:50 Heat Wave - Richard Castle file:///C:/Users/zainab/Downloads/Richard.Castle_Nikki.Heat.01_Hea... Heat Wave Richard Castle 2 of 110 05-05-2013 19:50 Heat Wave - Richard Castle file:///C:/Users/zainab/Downloads/Richard.Castle_Nikki.Heat.01_Hea... To the extraordinary KB and all my friends at the 12th 3 of 110 05-05-2013 19:50 Heat Wave - Richard Castle file:///C:/Users/zainab/Downloads/Richard.Castle_Nikki.Heat.01_Hea... Contents One It was always the same for her when she arrived… Two Nikki Heat’s footsteps echoed back at her off the concrete… Three Heat and Rook trailed two steps behind Noah Paxton as… Four Nikki didn’t go home following the movie after all. She… Five There is very little chance of a high-speed pursuit on… Six Nikki stepped into the rooftop bar of the Soho House… Seven Even as she stood frozen in her hallway, Nikki’s first… Eight When Detective Heat nosed the Crown Vic out of underground… Nine Nikki Heat’s apartment building was not the Guilford. It was… Ten Nikki led him wordlessly into her bedroom and set the… Eleven Thirty minutes later, Detective Heat stepped off the Guilford’s elevator… Twelve The three detectives and Rook maintained a tense silence as… Thirteen In the precinct interrogation room, the biker, Brian Daniels, seemed… Fourteen Raley came back into the bullpen dangling...
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...This page intentionally left blank This page intentionally left blank Less managing. More teaching. Greater learning. INSTRUCTORS... Would you like your students to show up for class more prepared? class is much more fun if everyone is engaged and prepared…) (Let’s face it, Want ready-made application-level interactive assignments, student progress reporting, and auto-assignment grading? (Less time grading means more time teaching…) Want an instant view of student or class performance relative to learning objectives? (No more wondering if students understand…) Need to collect data and generate reports required for administration or accreditation? (Say goodbye to manually tracking student learning outcomes…) Want to record and post your lectures for students to view online? With McGraw-Hill's Connect Management, ™ INSTRUCTORS GET: • Interactive Applications – book-specific interactive assignments that require students to APPLY what they’ve learned. • Simple assignment management, allowing you to spend more time teaching. • Auto-graded assignments, quizzes, and tests. • Detailed Visual Reporting where student and section results can be viewed and analyzed. • Sophisticated online testing capability. • A filtering and reporting function that allows you to easily assign and report on materials that are correlated to accreditation standards, learning outcomes, and Bloom’s taxonomy. • An easy-to-use lecture capture tool. STUDENTS... Want an online, searchable...
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...This page intentionally left blank This page intentionally left blank Less managing. More teaching. Greater learning. INSTRUCTORS... Would you like your students to show up for class more prepared? class is much more fun if everyone is engaged and prepared…) (Let’s face it, Want ready-made application-level interactive assignments, student progress reporting, and auto-assignment grading? (Less time grading means more time teaching…) Want an instant view of student or class performance relative to learning objectives? (No more wondering if students understand…) Need to collect data and generate reports required for administration or accreditation? (Say goodbye to manually tracking student learning outcomes…) Want to record and post your lectures for students to view online? With McGraw-Hill's Connect Management, ™ INSTRUCTORS GET: • Interactive Applications – book-specific interactive assignments that require students to APPLY what they’ve learned. • Simple assignment management, allowing you to spend more time teaching. • Auto-graded assignments, quizzes, and tests. • Detailed Visual Reporting where student and section results can be viewed and analyzed. • Sophisticated online testing capability. • A filtering and reporting function that allows you to easily assign and report on materials that are correlated to accreditation standards, learning outcomes, and Bloom’s taxonomy. • An easy-to-use lecture capture tool. STUDENTS... Want an online, searchable...
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...CORE CONCEPTS OF Accounting Information Systems Twelfth Edition Mark G. Simkin, Ph.D. Professor Department of Accounting and Information Systems University of Nevada Jacob M. Rose, Ph.D. Professor Department of Accounting and Finance University of New Hampshire Carolyn Strand Norman, Ph.D., CPA Professor Department of Accounting Virginia Commonwealth University JOHN WILEY & SONS, INC. VICE PRESIDENT & PUBLISHER SENIOR ACQUISITIONS EDITOR PROJECT EDITOR ASSOCIATE EDITOR SENIOR EDITORIAL ASSISTANT PRODUCTION MANAGER PRODUCTION EDITOR MARKETING MANAGER CREATIVE DIRECTOR SENIOR DESIGNER PRODUCTION MANAGEMENT SERVICES SENIOR ILLUSTRATION EDITOR PHOTO EDITOR MEDIA EDITOR COVER PHOTO George Hoffman Michael McDonald Brian Kamins Sarah Vernon Jacqueline Kepping Dorothy Sinclair Erin Bascom Karolina Zarychta Harry Nolan Wendy Lai Laserwords Maine Anna Melhorn Elle Wagner Greg Chaput Maciej Frolow/Brand X/Getty Images, Inc. This book was set in 10/12pt Garamond by Laserwords Private Limited, and printed and bound by RR Donnelley/Jefferson City. The cover was printed by RR Donnelley/Jefferson City. This book is printed on acid free paper. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is built on a foundation of principles that include responsibility to the...
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