1. Imagine that you work in the HR department of a financial services company. How would you react to an application from a highly skilled employee with experience at Bernard Madoff's firm? How much would it matter whether you believe the person knew what was going on? How, if at all, would your response change if you worked for a manufacturer?

2. What ethical criteria should you apply to making selection decisions involving people who once worked for Bernard Madoff (or some other firm with ethics or legal problems in its history)?

3. How important is it to you to work only for organizations with high ethical standards? Why does it (or doesn't it) matter to you?

In a scandal involving fraud worth tens of billions of dollars, Bernard Madoff admitted to authorities that he had involved investors in an extensive Ponzi scheme- promising steady, favorable returns but using funds invested by new clients to pay phony returns to older clients. Eventually, a plunging stock market made the scheme impossible to maintain; it finally unraveled when Madoff was turned in to authorities by his sons and confessed to fraud. The fallout extended well beyond losses to investors.

Employees of Bernard L. Madoff Investment Securities lost their jobs when the firm became insolvent. About 200 people had worked for the firm, and when Surge Trading bought its remaining assets, only about 30 stayed on. Now those who lost their jobs are struggling to rebuild their careers in spite of having a notorious name on their résumés. The association with Madoff is a red flag whether or not they were involved in the illegal and unethical behavior.

Eleanor Squillari was Madoff's assistant. Concluding that she would never find another job in the finance industry, she attended beauty school in the hopes of being able to land a job in a hair salon. Elaine Solomon is still trying to figure out what she can do next. She had been assistant to Peter Madoff, brother of Bernard and the firm's chief compliance officer. Now no one has interest in hiring her.