Homework Question on Madoff’s Unethical Practice
- Bernard Madoff, a once highly regarded member of the Wall Street community, recently pleaded guilty of running a $50 billion ponzi scheme.
- Research the driving forces behind his seemingly unethical behavior and discuss your findings.
- How did favoritism and bounded ethicality come into play in this case?
Homework Answer on Madoff’s Unethical Practice
With respect to my findings, the driving force behind Madoff’s unethical behavior was his urge to succeed financially and become wealthy as fast as possible. I found that since childhood, Madoff had the urge to be rich. Consequently, once he graduated from college, Madoff never wasted time. Instead, he strategized how he could join the Wall Street that he believed was making money at the time (Lewis, 2012).
Accordingly, he started his security firm that enabled him become a reputable stockbroker, and with the help of his stockbrokerage firm, he promised his clients high returns that he delivered to some of them, but not all of them. On the other hand, his unethical business practices also contributed to his unethical behavior. In this case, although Madoff understood what he needed to do in practicing his business, he employed other strategies that exempted him from licensing and registering his business.
At first, he requested his father in law to collect money from his clients and give it to him as one account of investment (Lewis, 2012). The practice exempted Madoff from registering his business at the first stage. In addition, his accountant by the name Avellino also practiced unethical accounting practices while auditing his firm. According to my findings, these two factors contributed to Madoff’s unethical practice.