Scam of the Century?

In what many call the Scam of the Century, Bernie Madoff, a once highly respected man in the finance community confessed to misleading his investors and in the process cheating them out of an estimated $50 billion. To put his operation in perspective, Madoff managed to wipe out around the same amount of capital for his investors as the Enron mega-scandal that so many of us are aware of. What's more, he managed to go largely undetected by financial regulators for decades presenting himself as a pillar in his community by "lending his investment expertise" to various charitable foundations and initiatives.

Madoff used a method called a Ponzi Scheme in which investors are paid with the incoming cash that new investors contribute. His variation was slightly more involved but the same basic concept holds true.

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There is really much to be said about the kind of man that can knowingly cheat individuals out of their hard earned money. To take it even further one can also question the type of society that indirectly encourages this type of behaviour. Recently the trend of financial scandals added the whole mortgage mess has done a lot to throw a wrench in the credibility of the financial system. The performance based culture we all live may be in some ways partially responsible, from CEOs playing with accounting records to meet profit targets to professional athletes using performance enhancing drugs to get or maintain an edge, the fact is that we as a society venerate winners and discard losers. This in no way attempts to find an excuse for Madoff's reprehensible actions but rather attempts to find an ounce of cause for what I to refer to as a crisis in credibility we as a society face. Sparing a more in-depth analysis I would just say although his untruthful ways are much to blame for what he did there were also other societal factors that also did their part too.

As I prepare to enter into the corporate world I hope that my ambition does not lead me into the situations similar to the ones mentioned. I have always admired individuals who count on their own hard work to propel them forward and in my experience such accomplishments are always sweeter victories.

If you're interested in learning more about the story behind the scandalclick here for a very good documentary explaining the Madoff affair . Highly recommended.