April 16, 2015
Bernard Madoff one of the names the world will never forget. Madoff was known, as a financial genius responsible for helping to create NASDAQ but what makes unforgettable is that he was also responsible for committing the largest Ponzi scheme we have yet to see. December 2008 a shock that no one was prepared for and something that will forever change the financial industry was the news that Bernard Madoff had been named as the man who committed the largest Ponzi scheme ever, essentially making billions of dollars disappear This scheme was responsible for the economic crisis we are still rebuilding today (Rittenberg, Johnstone, Gramling, & Knap, 2012,pg.125-126).
In the case of the Madoff Ponzi scheme case the regulatory oversight that was missing that could helped to prevent such an act was the fact of the SEC not requiring private investment firms to register with them. This is one of the reasons why I believe this scheme was not discovered. The next and probably the main reason was the lack of investigating his companies when he was handling billions of dollars. Because of his well-known statue in the financial realm it is like they gave Mr. Madoff free rein and essentially are just as responsible for the Ponzi scheme. Even considering the fact that Madoff was not required to register with SEC since he operated has a private investing firm and being so are not subject to the same oversight as public companies, the SEC still had right and the ability to monitor his company this should of especially been after having a whistleblower make allegations in regards to Bernard’s on goings within his company. The SEC apparently was understaffed and not capable of handling a scheme as big as this one a SEC director of SEC’s office of Compliance and Inspection and Examinations Lori A Richards commented saying that “only percent of the 11,300 investment advisers registered with Sec are examined on a...