CONTENT

01 DEFINITION AND IMPORTANT OF CORPORATE GOVERNANCE

02 A BRIEF ABOUT THE COMPANY

03 WHAT SCAM HAPPENED

04 HOW THE SCAM IMPACTED THE COMPANY

05 PLAYERS INVOLVED

06 LEGAL ACTIONS TAKEN

07 WHAT WAS THE LACK OF GOVERNANCE
08 COMPENSATION
09 RECOMMENDATIONS FOR PREVENTION
ABOUT BERNIE
MADOFF AND
HOW HE
STARTED THE
PONZI SCHEME
PONZI SCHEME
HOW THE MADOFF SCHEME
OPERATED FICTITIOUS ACCOUNT
STATEMENTS

PROMISE OF HIGH
Forged statements
RETURNS
No real investments, showed steady returns.
just moving funds.
Promised high, Lured more investors,
reliable returns. maintained trust.
Created an illusion of
profits.
Portrayed Madoff as
an expert.
FAKE INVESTMENTS
AND REDISTRIBUTION
 DECEPTIVE TACTICS

FICTITIOUS FALSE USE OF RELYING ON

INVESTMENT ACCOUNT TRUST AND WORD OF
STRATEGY STATEMENTS REPUTATION MOUTH

DELAYED FAKE AUDITS

WITHDRAWALS AND
REGULATORY
CLAIMS
 KEY PLAYERS
Frank DiPascali Shana Madoff Swanson
Bernard Madoff Other employees

Peter B. Madoff
David G. Friehling
 IMPACT

Financial Losses Individual and Charitable Regulatory

Individuals lost their
Family Tragedies: Organizations: Reforms
life savings, investors faced Reforms in Securities
retirement funds, bankruptcy, and Exchange
and investments. foreclosure, and Commission (SEC)
even suicide
improving investor
protection and
transparency.
 IMPACT

Distrust in Legal Cultural Impact

Financial Repercussions: scandal became
Institutions: emblematic of

corporate greed and

dishonesty.
LEGAL ACTIONS TIMELINE

December 2008 March 2009 June 2009 December 2010

Bernie Madoff was Pleaded guilty to 11 Sentenced to 150 Former employees
arrested on felonies years in prison on were arrested and
December 11, 2008. June 29, 2009 charged in
Forced to forfeit $170 December 2010 for
Confessed to his billion as. their roles in the
sons Ponzi scheme.
LEGAL ACTIONS TIMELINE

June 2012 March 2017 November 2017 June 2021

younger brother, Supreme Court of operations manager, Madoff's auditor,
Peter Madoff, the United States Daniel Bonventre, Friehling & Horowitz,
sentenced to 10 denied Madoff's paid $900,000 in a
years request for a review sentenced to 10 settlement with the
years in prison U.S. Securities and
pleaded guilty to Upholding his 150- Exchange
conspiracy and year sentence. Commission (SEC)
falsifying records.
LAWS AND REGULATIONS

SEC OVERSIGHT FINANCIAL DODD-FRANK WALL

REGULATION STREET REFORM
Securities and Exchange
Commission (SEC demand for greater
AND CONSUMER
transparency and
accountability
PROTECTION ACT
Failed to detect red flags
Financial Stability Oversight
whistleblower protection Council (FSOC)
and incentives
Consumer Financial Protection
Bureau (CFPB)
LACK OF CORPORATE GOVERNANCE

1. Lack of Oversight
2. Conflict of Interest
3. Inadequate Due Diligence
4. Lack of Whistleblower Protection
5. Regulatory Failures
COMPENSATION
Madoff’s Personal Gains
accumulated substantial Compensation for Victims
wealth estimated at
The Securities Investor Protection
around $65 billion
Corporation (SIPC) - $500,000 per account
Irving H. Picard
Charitable organizations and pension funds
RECOMMENDATION FOR PREVENTION

Independent Oversight External Audits

Transparency and
Internal Control Disclosure

Regulatory Compliance Diversification

Whistleblower Protection Independent Reviews

THANK
YOU