1. Is Madoff’s sentence too long?
2. Some SEC personnel were derelict in their duty. What should happen to them?
3. Are the reforms undertaken by the SEC ( tough enough, and sufficiently encompassing?
4. Does it matter that Madoff’s auditor, Friehling, was his brother-in-law?
5. Does it matter that Friehling did no audit work?
6. Comment on the efficacy of self-regulation in the form of FINRA, and in respect of the audit profession. What are the possible solutions to this?
7. Answer Markopolos’ questions: “How can we go forward without assurance that others will not shirk their civic duty? We can ask ourselves would the result have been different if those others had raised their voices and what does that say about self-regulated markets?”
8. How could Markopolos and the other whistleblowers have gotten action on their concerns earlier than they did?
9. Did Markopolos act ethically at all times?
10. What were the most surprising aspects of Markopolos’ verbal testimony on YouTube at
11. Did those who invested with Madoff have a responsibility to ensure that he was a legitimate and registered investment advisor? If not, what did they base their investment decision on?
12. Should investors who make a lot of money (1% per month while markets are falling) say “Thank you very much”, or should they query the unusually large rate of return they are receiving?
13. Should investors who made money from “investing” with Madoff be forced to give up their gains to compensate those who lost monies?
14. Is this simply a case of “buyer beware”?

Bernie Madoff perpetrated the world’s largest Ponzi scheme1 in which investors were initially estimated to have lost up to $65 billion. Essentially investors were promised, and some received, returns of at least 1 per month. However, beginning in the early 1990s, these payments came from funds invested by new investors, not from returns on invested funds. Consequently, when new investor contributions slowed due to the subprime lending crisis in 2008, Madoff ran out of funds to pay redemptions and returns, and the entire scheme unraveled. As Warren Buffet has said, “You only learn who has been swimming naked when the tide goes out.” Bernie Madoff certainly was, much to the chagrin of some supposedly very savvy investors who were attracted by seemingly constant returns of about 1% per month in up as well as down markets.

  • CreatedOctober 28, 2014
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