Essays on Securities Fraud

Abstract

The Madoff Securities scandal was one of the biggest Ponzi schemes to hit America. This essay would examine the Madoff scandal from an audit perspective since it was the complacency (or collusion) of the auditors that encouraged the perpetrator of this scam. While the scam that was pulled by Bernie Madoff, was both large and difficult to spot, its detection also helped expose a crucial flaw that existed in corporate America at the time. This was the lack of regulatory oversight in the Securities business. While one could lay the blame for this scandal on the Regulator, another important ...

INTRODUCTION

Martha Stewart was indicated for Securities Fraud. However, she was acquitted of the charges, but instead found guilty of obstruction of justice and making false statements. As a result of the finding of guilt, she served five months in federal prison. There are many opinions concerning the evidence presented in the case against Martha Stewart for violation of the Securities Act. Some legal scholars claim that she was guilty of insider trading while others claim the court properly found the evidence lacking and her actions not in violation of the securities law. Presented in this paper are two scholarly ...

Cases of fraud usually take place in both huge firms as well as small firms, and in this case, we will focus on Mamtek, which was a small firm. There are various reasons that usually led to cases of fraud in the various firms. Most of the fraud cases usually involve manipulating the various stakeholders for personal gain. Such decisions to commit fraud are usually for personal gains or to achieve performance within short durations rather than following the right procedures which would bring positive results in the long run. Mamtek was a Hong Kong based manufacturing firm that ...

ETHICAL AND LEGAL ISSUES

i) Bernard Lawrence Madoff was a well known and respected entrepreneur, investor and stockbroker. He also was the non-executive chairman of NASDAQ up until the uncovering of his fraudulent activities that he had carried out since the early 1990s. Madoff established his investment firm in 1960 with which he used his influence and trust to con people of their hard earned money promising a good return on their investments at a better rate than the prevailing stock market and bank rates. However this was a huge scam, what is known as a Ponzi scheme. A Ponzi scheme is a type of securities fraud where the ...

1. The three types of illegal business behavior alleged against Bernie Madoff include fraud, money laundering and theft. The first, fraud, involves coercing investors to decide whether or not to invest by giving them information that does not correspond to the reality of their situation. Madoff did this by This is meant to provide a short term gain for the defrauder, but significant losses for investors – the person committing the fraud gets the investment money while providing no return on that investment back to the investors. This is an unethical business practice, due to the fact that it is an ...