Madoff's Ponzi Scheme

The name Bernard Madoff was a legendary name on Wall Street until he was arrested December 12, 2008 for pulling off a multibillion-dollar fraud scheme. His scheme is most likely the largest scandal in Wall Street's history. His actions are considered and related to history's Ponzi Scheme. The Ponzi scheme is named after the man Charles Ponzi who managed other's money promising a 50% profit within 45 days. However, in reality Ponzi only took the money the new investors invested in him and gave it to the old investors who wished to withdraw some money. As long as old investors did not withdraw too much at a time, the plan would work well. As for Madoff, he began to run out of new investors who would have "payed" off the old investors. Thus, he ran out of money to pay for the "profit" he promised to the investors. Overall, the vast amount of companies that had trusted Madoff to manage their money and had not withdrawn their money, ended up losing million/billions of dollars. Not only did the companies that invested in Madoff suffer, the companies/people that invested in those companies ultimately suffered as well.

Madoff's actions undoubtfully affected Canadians as well. As Madoff is a well-known money manager, there must be Canadians who had trusted him as well. Madoff's actions had caused companies to lose as much as 50 billion dollars, which is completely unacceptable. It is in fact fearful that a 70-year-old man is able to pull off such a scheme without being caught before resulting in such damage. There must be a firmer and enforced force that monitor such people's actions to avoid future misfortunes.





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