Republic of the Philippines

BATANGAS STATE UNIVERSITY

Pablo Borbon Main1, Rizal Avenue, Batangas City
College of Accountancy, Business, Economics and
International Hospitality Management

Governance, Business Ethics, Risk Management and Internal Control

MGT 209
First Semester
AY 2019-2020

Case Study
Bernard L. Madoff Investment and Securities: A Focus on Auditors’ and
Accountants’ Legal Liability

By:

MARJORIE A. TAN
18 – 58354
BSMA – 2101

KATHLEEN MAE D. VILLANIA

18 – 50853
BSMA – 2101

December 2019

Case Study MGT 209 Page 1 of 26

Executive Summary

During 2008, Bernie Madoff became famous for a Ponzi scheme that defrauded

investors out of as much as $65 billion. A Ponzi scheme is an investment fraud that pays

existing investors with funds collected from new investors. Ponzi scheme organizers often

promise to invest your money and generate high returns with little or no risk. But in many

Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those

who invested earlier and may keep some for themselves. With little or no legitimate

earnings, Ponzi schemes require a constant flow of new money to survive. When it

becomes hard to recruit new investors, or when large numbers of existing investors cash

out, these schemes tend to collapse.

To satisfy his clients’ expectations of earning returns greater than the market

average, Madoff falsely asserted that he used an innovative “split – strike conversion

strategy,” which provided the appearance that he was achieving extraordinary results. In

reality, he was a fraudster. Madoff had attracted a wide following because he delivered

consistently high re-turns with very low volatility over a long period. This strategy involves

taking a long position inequities together with a short call and a long put on an equity

index to lower the volatility of the position. We know now that these returns were fictitious.

The Madoff affair raises the obvious questions as to why it was not discovered earlier and

why investors and regulators missed the various red flags. Madoff was arrested on

December 11, 2008, and convicted in 2009 on 11 counts of fraud, perjury, and money

laundering. As a result Madoff was sentenced to 150 years in prison.

The Securities Investor Protection Corporation (SIPC), which provides aid to

customers of failed brokerage firms when assets are missing from customer accounts,

Case Study MGT 209 Page 2 of 26

gave Madoff’s victims $800 million and appointed Irving Picard as the trustee responsible

for liquidating Madoff’s firm in December 2008. Picard filed claims totaling $100 billion in

lawsuits against Madoff’s feeder funds, banks that Picard believed to have added Madoff

in perpetrating his fraud, clients who took out more than they put in (“net winners”), and

the Madoff family. In addition to the feeder funds coming under fire, the firms auditing

these funds also became litigation targets.

The first lawsuit against a feeder fund’s auditor was brought in December 2008.

The lawsuit brought by New York Law School and the limited partners of feeder fund

Ascot Partners, was against the Ascot Partners’ auditor BDO Seidman (and J. Ezra

Merkin, the feeder fund’s general partner)

The lawsuit alleged that BDO Seidman grossly negligent and failed to do the

following:

 Use due professional care;

 Properly plan the audits

 Maintain an appropriate and degree of skepticism, and;

 Obtain sufficient competent evidential matter to support the conclusion of the audit

reports.

The lawsuit alleged that Ascot Partners had made materially false and misleading

statements to investors, implying that it would use “numerous third – party managers with

varying execution strategies, thereby avoiding the risk of concentrating capital in too few

investments or managers. Virtually all of Ascot’s $1.8 billion was invested with Madoff.

From 1991 through 2008, Bernard L. Madoff Investment and Securities’ (BLMIS) financial

statements were audited by the accounting firm Friehling & Horowitz. In March 2009,

Case Study MGT 209 Page 3 of 26

David Friehling, who was a CPA licensed by the state of New York, was arrested and

charged with securities fraud, aiding Madoff with investment adviser fraud, and filing false

audit reports with the SEC. The changes brought against Mr. Friehling include that he

failed to do the following:

 Conduct independent verification of BLMIS revenues, assets, liabilities related to

BLMIS client accounts, and the purchase and custody of securities by BLMIS.

 Test Internal Controls over areas such as the payment of invoices for corporate

expenses on the purchase of securities by BLMIS on behalf of its clients.

 Examine a bank account through which BLMIS clients funds flowed.

Statement of the Problem/Discussion Questions

The following are the discussion questions:

1. Refer to the fundamental principles governing and audit. Under the

responsibilities principle, auditors are required to exercise due care and

maintain professional skepticism throughout the audit. Based on the case

information, discuss the ways in which the BLMIS auditor, David Friehling,

disregarded his responsibility to uphold fundamental principles governing an

audit.

Auditors are tasked in providing independent and objective evaluations

of company’s financial condition. According the Responsibilities Principle,

auditors are responsible for “maintaining professional skepticism and

exercising professional judgment throughout the planning and performance of

the audit. This was clearly not exhibited by the auditors at Friehling & Horowitz

Case Study MGT 209 Page 4 of 26

 on the BLMIS audit. In the case of BLMIS the auditor is viewed to contribute

greatly in this case of fraud. Friehling did not act with due care as he failed to

perform several tasks listed in the engagement, such as testing internal

controls over payments of invoices for corporate expenses. Moreover, he also

failed to examine a bank account through which the client’s funds flowed.

Despite of being a basic incompliance these contribute a big part and these

were considered as an important steps of the engagement, so it is easy to

argue that the auditor did not fulfill his responsibilities. The fact that Friehling

decided to not have his work peer-reviewed, and his actions to file false certified

audits and financial statements with the SEC clearly show that Friehling did not

follow the fundamental principles of conducting an audit. As Friehling main duty

is to exercise due care and maintain professional skepticism throughout the

audit under the responsibilities principle which he had failes to do.

2. Consider the charges brought against the BLMIS auditor, David Friehling,

regarding his failure to complete certain audit steps. If you were auditing

BLMIS, what type of evidence would you like to review to determine whether

BLMIS had (1) purchased, (2) sold, and (3) maintained proper custody of

investment securities?

According to paragraph #21 of AU Section 326, “To be competent,

evidence, regardless of its form, must be both valid and relevant.” Indeed, “the

validity of evidential matter is so dependent on the circumstances under which

it is obtained that generalizations about the reliability of various kinds of

evidence are subject to important exceptions.” So, the competence of audit

Case Study MGT 209 Page 5 of 26

 evidence refers to the quality of the evidence gathered for a financial statement

assertion about a financial statement account balance and/or an economic

transaction(s).

In accordance to this, it is stated in the standard, that there are two aspects

to evidence quality that are most important: relevance and reliability. The

relevance of audit evidence specifically relates to whether the evidence

gathered actually relates to the financial statement assertion being tested. That

is, will the evidence allow the auditor to reach conclusions related to that

financial statement assertion? The reliability of the evidence specifically relates

to whether the evidence gathered can truly be relied upon as providing a true

indication about the financial statement assertion being tested. According to

paragraph #22 of AU Section 326, “The amount and kinds of evidential matter

required to support an informed opinion are matters for the auditor to determine

in the exercise of his or her professional judgment after a careful study of the

circumstances in the particular case.” So, the sufficiency of audit evidence

refers directly to the quantity of the audit evidence gathered about a financial

statement assertion.

3. Consider an auditor’s common law liability to third parties. Describe the

difference among the three levels of failure to exercise due care: ordinary

negligence, gross negligence, and fraud. Based on the case information,

comment on the possible level of failure that was seemingly exhibited by BDO

Seidman in their audit of Ascot Partners. Are there any factors that you believe

could be used in defense of the auditing firm?

Case Study MGT 209 Page 6 of 26

  Negligence is the failure to use the level of care and caution that an

ordinary person would use in similar circumstances. It often involves a

careless mistake or inattention that causes an injury. Gross negligence

on the other hand is the deliberate and reckless disregard for the safety

and reasonable treatment of others. In both cases, the fundamental

disregard for responsibility must directly cause harm to another person,

another person’s property, or both. The CPA made a representation

about a material fact with lack of reasonable support. The purpose of the

representation was to induce reliance by another. The representation

was relied on by the client or third party. The reliance caused damages

to the client or third party. On the other hand, Fraud is defined as the

intentional false representation or concealment of a material fact for the

purpose of inducing another to act upon it to his or her injury (as defined

by the American Institute of Certified Public Accountants). David

Friehling did not exercise due care and maintain professional skepticism

through the audit of BLMIS audit. He did not conduct independent

verification of BLMIS revenues, assets, and liabilities related to BLMIS

client accounts. In addition he did not independently verify the purchase

and custody of securities by BLMIS. Friehling did not uphold the

fundamental principles of conducting an audit when he did not test

internal controls over payment of corporate expenses or purchase of

securities for BLMIS clients. Friehling violated the basic principles of

audit when he filed falsely certified audits and financial statements with

Case Study MGT 209 Page 7 of 26

 the SEC. He also did not exercise due care and maintain professional

skepticism when he did not examine the bank account through which

BLMIS client funds flowed.

4. Consider Section 24 of Securities Act of 1933 and Section 32 of the Securities

Exchange Act of 1934. Based on the case information, do you believe that the

BLMIS auditor, Friehling, should be facing criminal charges? Why or why not?

Next, do you believe that the Ascot Partners auditor, BDO Seidman, should be

facing criminal charges? Why or why not?

The Securities Act of 1933 was created and passed into law to protect

investors after the stock market crash of 1929. The legislation had two main

goals: to ensure more transparency in financial statements so investors could

make informed decisions about investments; and to establish laws against

misrepresentation and fraudulent activities in the securities markets. BLMIS

auditor Friehling, the Ascot Partners auditor, BDO Seidman should face

criminal charges because the lawsuit alleged that BDO Seidman is grossly

negligent and Friehling knowingly or recklessly made false statements in an

effort to help Madoff avoid any real scrutiny of BLMIS' investment operations.

The lawsuit alleged that Ascot Partners had made materially false and

misleading statements to investors, implying that it would use “numerous third

– party managers with varying execution strategies, thereby avoiding the risk

of concentrating capital in too few investments or managers. Virtually all of

Ascot’s $1.8 billion was invested with Madoff. From 1991 through 2008,

Bernard L. Madoff Investment and Securities’ (BLMIS) financial statements

Case Study MGT 209 Page 8 of 26

 were audited by the accounting firm Friehling & Horowitz. In March 2009, David

Friehling, who was a CPA licensed by the state of New York, was arrested and

charged with securities fraud, aiding Madoff with investment adviser fraud, and

filing false audit reports with the SEC.

Causes of the Problem

Investment plays a significant role for improving productivity and increasing the

competitiveness of an economy. That is the reason why people trust in investments in

order for their money to grow and at the same time contributing a portion for the growth

of the world’s economy through the help of different financial and investment institutions.

As for the case of Bernard L. Madoff Investment and Securities (BLMIS), it was a different

situation. Headed by Bernard Lawrence Madoff, give birth to one of the biggest fraud

cases in the past decade.

Madoff ran the biggest Ponzi scheme in the US history. From the 1980’s through

December 2008, he had taken billions of dollars from individuals, charities, trusts, pension

funds, and hedge funds, which he advised were invested but actually converted for his

own use. He promised the people and organizations high rates of return with limited risk.

He hired back office employees that were not qualified and had workers create false

documents. He also had a business in London that he wired money to give the impression

he was trading internationally (Voreacos, 2009). According to an interview conducted by

Eugene Soltes, he asked Madoff on how he would explain his actions and misconduct to

a group of students. Answering a single question, Madoff exhibits several all-too-familiar

cognitive biases, psychological tendencies that can lead to irrational behaviour. His

answers highlighted five main reasons, first, is his ambition. Like a single person in

Case Study MGT 209 Page 9 of 26

Harvard Business School, he also aspires to be one of the successful person in the field

of business. Second, Madoff’s confidence is up to a level where he perceive that he can

achieve everything. Third, is the “slippery slope” as he started to go off the tracks, and

was able to convince himself that this was just a temporary situation until that path

continue for a long time of defrauding the investors. Fourth is the lack of self-control, to

limit oneself and to beat every actions with conscience. Madoff lose himself and not

frightened enough to stop what he is doing. Lastly, rationalization of iffy decisions. Being

on jail Madoff had realization of rationalization. Everything shouldn’t been happened if

only he has a clear mind to have a clear and rationalize decisions of everything.

Moreover, focusing on the “slippery slope” that Madoff took and the causes of such

fraud scandal cases to arise. A Focus on Auditors’ and Accountants’ Legal Liability, the

case highlights the legal liability faced by auditors of the feeder funds. During 2008, Bernie

Madoff became famous for a Ponzi scheme that defrauded investors out of as much as

$65 billion. Such fraud would not completely happen but just Madoff himself. The cause

of the case points out other key players who are also liable for the said case. According

to Daily Mail Reporters (2012), Friehling & Horowitz handled the accounting for Bernie

Madoff’s firm. The sole audit was David Friehling. “From 1991 to 2008 Friehling never

audited Madoff’s business and each year told federal regulators that Madoff’s company

had a 'clean audit record.' Madoff paid Friehling $12,000 to $14,500 a month as his auditor

from 2004 to 2007. On the other hand, with the proper investigations it comes that Mr.

Friehling’s work was not peer-reviewed because, since 1993, he had informed the AICPA

that he did not perform audits, and therefore, would not need a peer review. Which by the

case Friehling illegally audited Madoff’s account. In additional according to Accounting

Case Study MGT 209 Page 10 of 26

Web (2009), David G. Friehling, who operated from a tiny storefront office in the New

York City suburb of New City in Rockland County, was charged with securities fraud and

with aiding the investment adviser fraud committed by Mr. Madoff. A related civil case

was filed against him and his firm, Friehling & Horowitz, by the Securities and Exchange

Commission. “Friehling failed to conduct audits that complied with GAAS and GAAP by,

among other things, failing to: (a) Conduct independent verification of BLMIS assets; (b)

Review material sources of BLMIS revenue, including commissions; (c) Examine a bank

account through which billions of dollars of BLMIS client funds flowed;(d) Verify liabilities

related to BLMIS client accounts; or (e) Verify the purchase and custody of securities by

BLMIS." He also invested his own money with Bernie Madoff, which is a conflict of interest

and violated auditing rules.

In this instance, we can come up to the conclusion that the auditor is at fault but it

seems like that the Securities and Exchange Commissions on some parts are at fault too.

According to Matthew Goldstein for Business Week, “The SEC already has admitted that

its prior investigations into Madoff were faulty and regulators could have been done a

better job. A number of people on Wall Street, including some of Madoff’s competitors,

sent letters to the Securities and Exchange Commission warning regulators that

something was amiss at Madoff’s firm. To be fair, detecting fraud is difficult. It doesn’t

exempt the institution in doing their part righteously, being one of the governing body in

the business the SEC has enormous power to subpoena records and get access to

trading records and something ordinary investors can’t do. With this the SEC could began

taking decisive and comprehensive steps to reduce such cases or at least just minimize

Case Study MGT 209 Page 11 of 26

those instances abiding those process as the accounting firm need to complete a real

audit before it can indicate a case of fraud.

Decision Criteria and Alternative Solution

Decision criteria helps evaluate the alternatives from which a certain company is

choosing to imply. The decision criteria in a business setting are or characteristics that

are important to the organization making the decision. (Cox A., 2015)

Each of the mentioned alternatives below can be evaluated using the following

decision criteria:

1. Conceptual Fit

2. Timeliness

3. Quality

4. Cost

5. Fairness

6. Stability

7. Transparency

8. Comparability

Alternative Solutions

1. Understand Your Investment

Bernie Madoff told his clients he was engaging in a split-strike conversion

strategy, which involves selling out-of-the-money call options on index futures,

buying a representative sample of the underlying equities in the index, and

purchasing in-the-money put options. (Carnie, P. 2019) Investing requires

Case Study MGT 209 Page 12 of 26

 discipline and commitment to a strategy. As an investor you must also take part by

understanding your own investment strategy, so having a difficult time adhering it

during tough times will be prevented. Abandoning your investment strategy when

it’s out of favour can be a recipe for loss. Entering in the business of investment,

one must have a strength of knowledge so that you will have your own edge to not

be fooled by people engaging in fraud.

2. Develop an awareness of observing signals.

Part of what made Madoff so dangerous was that he became a master of

signalling. Signalling is when you outwardly display behaviour’s, objects, activities,

or qualifications to convince others of something. In Madoff’s case, he was

signalling to the outside world that he was an incredibly successful and trustworthy

investor:

 He owned multiple homes, a collection of Rolexes, and a 100 ft. yacht he

named “Bull” (you can’t make this stuff up).

 Served a term as Chairman of the NASDAQ Stock Exchange.

 Served on regulatory advisory committees.

 Gave generously to charities.

 Was always immaculately dressed in custom pinstripe suits.

 Belonged to several elite country clubs.

 Had a prestigious office in Manhattan and London.

Case Study MGT 209 Page 13 of 26

  Signalling can be a useful tool for judging people and situations; however,

it can also be used against you if the person you’re judging is aware of what

you’re looking for.

Also, just because someone is signalling that they’re successful does not

mean that they are running a Ponzi scheme. How someone holds themselves out

to the world should help you in your decision, but it should not be your sole deciding

factor for assessing an investment.

3. Exercise Due Diligence

The term "due diligence" is used in many ways and has vague

interpretations for many. Due diligence in its basic form is based on a certain

standard of care or level of prudence. It can involve the evaluation of a person, a

group or a specific act or set of events. It is considered an open format for the party

or parties under evaluation, meaning that any segment of the business is open

season for review and unfettered access must be granted. Businesses themselves

conduct frequent internal evaluations as part of the normal operating procedure

usually called internal audit or internal operating business review. (Schmidt, M.

2019)

There were fundamental problems with the Madoff fund, say investment

professionals familiar with the case. According to Jordan Kimmel a fund manager,

“I would guess there was a lot of mischief being handed to the auditors that

prevented this from being exposed sooner, because no auditor regardless of size

Case Study MGT 209 Page 14 of 26

 would go along with a crime of this level and this magnitude.” The problem in the

Madoff case was that he was so well-insulated, with a five-year rate of return and

numerous testimonials from high-roller clients, that it was difficult for many

investors to sift through the static and find out how the fund was being managed.

4. Only work with an adviser that uses a third-party custodian

In Madoff’s case, he was the custodian and the investment adviser for his

clients. The role of a custodian is to hold clients’ investments, create statements,

settle trades, report account values, handle deposits and disbursements, and

many other important duties. The role of an investment adviser is to make the

actual investment decisions for their client about which securities to invest in, how

much to invest, and decisions around the timing of when to get in or out of

investments. Because he was doing both of those jobs, he had the ability to

manipulate the statements to support the story he was telling his advisory clients.

When selecting an investment adviser, it must take into consideration that it is best

practice to only work with firms that use a third-party custodian. The third-party

custodian is then responsible for holding the investments, and the adviser is

responsible for choosing the investments.

5. Don't Chase Returns

The biggest incentive to buy into an investment vehicle, of course, is that

it's generating big money for its investors. In the case of the Madoff investment,

Case Study MGT 209 Page 15 of 26

 the Ponzi scheme by design is set to reward those who get in the game first, who

are then paid returns with money that comes from later investors. "People are

chasing the number, and most of them get into them after the returns have already

been had," says Casserly, who cites last year's popular emerging markets trade

as an example. She points out that $1.9 trillion went into developing economies in

August 2007, just at the point that institutional investors were pulling out. In 2008,

emerging markets have tanked as the global recession has spread. But in many

instances, especially in cases like the Madoff fund, by the time big returns are

getting noticed the investment has already seen its best days. The damage is

especially egregious to those who put most or all of their savings into the funds.

Case Study MGT 209 Page 16 of 26

Recommended Solution, Implementation and Justification

In December 2008, Bernard L. Madoff admitted to perpetrating a massive Ponzi

scheme. Shortly thereafter, the SEC began taking decisive and comprehensive steps to

reduce the chances that such frauds would occur or be undetected in the future.

Based on the information gathered, the researcher came up with the following

recommended solutions.

WHO WHAT WHEN HOW

Carry out lessons for

Investment Executing lecture As Soon As investors to have deeper

Advisers and lessons for Possible knowledge on fraudulent

investors schemes, how to avoid them

and how to notice red flags

when someone is fooling you.

A broker-dealer that

maintains custody of

Auditors Audit Enhancements As soon as customer securities and cash

possible would be required to undergo

a compliance examination —

by a Public Company

Accounting Oversight Board-

Case Study MGT 209 Page 17 of 26

 registered public accounting

firm — that would include an

audit of the controls the

broker-dealer has in place to

protect customer assets.

Broker-dealer audit

requirements also would be

updated to facilitate the ability

of the PCAOB to inspect

broker-dealers’ registered

public accounting firms.

Proposed revisions to Form

ADV and the creation of Form

PF will increase the amount of

information available for use

by the agency in conducting

Internal Control Improving Risk As soon as risk assessment. The agency

Management Assessment possible is also increasing

Capabilities collaboration with third parties

and other government

agencies. Finally, the agency

created a new Division of

Risk, Strategy, and Financial

Case Study MGT 209 Page 18 of 26

 Innovation that is providing

expertise to examiners and

the policy divisions in risk

assessment, financial

products, and financial

engineering.

The SEC has instituted

Examiners Improving Fraud As soon as measures to improve the

Detection possible ability of examiners to detect

Procedures for fraud and other types of

Examiners violations. Examiners across

the country now routinely

reach out to third parties such

as custodians, counter-

parties, and customers during

exams to verify the existence

and integrity of all or part of

client assets managed by the

firm. In addition, the

measures include more

rigorous reviews of firms

before the examiners enter

the premises, and an exam

Case Study MGT 209 Page 19 of 26

 approach that focuses not

only on obvious signs of fraud

but also more subtle signals

that deserve closer

inspection, such as a firm

using an unknown accountant

or no accountant at all. The

measures also include

expanded use of joint broker-

dealer and investment adviser

examination teams for entities

that have joint or dual

registration as broker-dealers

and investment advisers.

The SEC has been bringing in

new staff with diverse skill

Senior Recruiting Staff with sets to expand its knowledge

Specialized Specialized base and improve its ability to

Examiners and Experience assess risk, conduct

Additional Staff examinations, detect and

investigate wrongdoing, and

focus our priorities. Some

initial examples included:

Case Study MGT 209 Page 20 of 26

  The agency has hired

new staffers to the

examination unit —

and will bring on board

more — who have

specialized experience

in areas such as

derivatives markets,

derivatives trading,

private funds, clearing,

risk management,

trading, operations,

portfolio management,

options, compliance,

valuation, new

instruments and

portfolio strategies,

and forensic

accounting.

 The agency has been

Capital Markets Recruiting Staff with hiring additional staff

Expertise Specialized with expertise in

Experience modern financial

Case Study MGT 209 Page 21 of 26

 products and

techniques — such as

structured debt,

derivatives, and private

fund activities. Now,

other staffers can tap

into that expertise to

help them identify

emerging issues and

understand the ways

the industry is

changing. Such

expertise can also be

helpful in efforts to

improve the

techniques used in

examinations and the

collection and analysis

of data.

I Implement a Security
As soon as
Auditors Implement a Security possible Program that focuses on

Program for Investor’s flow of money until

Investors

Case Study MGT 209 Page 22 of 26

 such investor’s receive the

right amount of returns.

The SEC has developed

formal agreements, similar to

those used by criminal law

enforcement authorities, to
As soon as
Employees or Encouraging Greater secure the cooperation of
possible
Organizations Cooperation by persons who are on the

inside the 'Insiders' "inside" or otherwise aware of

company organizations engaged in

fraudulent activity. These

agreements provide that

insiders who offer truthful

evidence and agree to

cooperate and testify will be

eligible for a possible

reduction in sanctions. These

cooperation agreements have

the capacity to secure the

availability of witnesses and

information earlier in

investigations, enabling the

agency to build stronger

Case Study MGT 209 Page 23 of 26

 cases more quickly. Since its

launch in January 2010, the

cooperation initiative has

been used to support and

strengthen investigations

nationwide in areas including

financial statement and

accounting fraud, insider

trading, investment adviser

fraud, market manipulation,

offering fraud, and FCPA

violations.

Case Study MGT 209 Page 24 of 26

External Sourcing

Mail Reporters (2012, November 16). Tragedy as medical student son of Bernie Madoff’s
accountant shoots himself dead - as his father waits to be sentenced for hiding
$65billion fraud. Retrieved December 04, 2019, from Mail Online:
http://www.dailymail.co.uk/news/article-2234198/Tragedy-medical-student-son-
Bernie-Madoffs-accountant-shoots-dead--father-waits-sentenced-hiding
65billion-fraud.html
AccountingWEB (2009, March 30). AccountingWEB. Madoff's accountant: When isan
auditor not an auditor? Retrieved December 04, 2019, from Mail Online:
http://www.accountingweb.com/topic/watchdog/madoff-s-accountant-when-
auditor-not-auditor
Voreacos, D. (2009, March 11). Bloomberg. Bloomberg.com. Retrieved December 04,
2019, from: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6Osn
Coxx, J. (5, August 2010). Five Lessons for Investors from the Madoff Scandal. Retrieved
December 04, 2019, from CNBC: https://www.cnbc.com/id/28253863
Alessandro, K. (12, December 2013). Five Years Later: How Bernie Madoff Has
Transformed the Investment Industry. Retrieved December 04, 2019, from
EzeCastle Integration: https://www.eci.com/blog/488-five-years-later-how-bernie-
madoff-has-transformed-the-investment-industry.html
Carney, P. (2019, May 16). 10 Years Later: Lessons Learned from the Bernie Madoff
Scandal. Retrieved December 04, 2019, from Rodger & Associates:
https://rodgers-associates.com/blog/lessons-bernie-madoff-scandal/
Schmidt, M. (2019, June 25). How To Avoid Falling Prey To The Next Madoff Scam.
Retrieved December 04, 2019, Investopedia:
https://www.investopedia.com/articles/fundamental-analysis/09/investing-due-
diligence.asp
Nobel, C. (2016, October 24). Bernie Madoff Explains Himself. Retrieved December 04,
2019, Working Knowledge: https://hbswk.hbs.edu/item/bernie-madoff-explains-
himself
Investor.Gov (2012, November 16). PONZI SCHEME. Retrieved December 07, 2019,
from Investor.Gov:https://www.investor.gov/protect-your-
investments/fraud/types-fraud/ponzi-scheme
Bernard, C., Boyle, P., (2009, May 18). Mr. Madoff’s Amazing Returns: An Analysis of the
Split-Strike Conversion Strategy. Retrieved December 07, 2019, from Research
Gate:https://www.researchgate.net/publication/240315698_Mr_Madoff's_Amazi
ng_Returns_An_Analysis_of_the_Split-Strike_Conversion_Strategy

Case Study MGT 209 Page 25 of 26

US Securities and Exchange Commission (2019, July 15). The Securities and Exchange
Commission Post-Madoff Reforms. Retrieved December 07, 2019, from US
Securities and Exchange Commission:
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