Madoff Sentenced to 150 Years for Ponzi Scheme

Link:
http://www.bbc.co.uk/worldservice/business/2009/06/090630_madoff_sentence.shtml

Resources:
http://www.cbsnews.com/stories/2008/12/15/cbsnews_investigates/main4670631.shtml
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14214978
http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

Summary:
On June 30, 2009, Bernard Madoff (former Chairman of Bernard L. Madoff Investment Securities LLC) was arrested for one of the largest frauds in American history. His investment firm with exclusive clientele led his customers to believe they would gain between 10-15% interest in the fund-management investments (bonds, treasuries, etc.), but he would pocket the majority of their money and return only part of it.

Connections:
A few of the many connections to Madoff's ponzi scheme include the Generally Accepted Accounting Principles. He faked transactions, violating the Objectivity Principle because there is no reasonable evidence supporting the transaction. Sending fake statements to clients would mean disrupting the Revenue Recognition Convention because the money put into the investments have not made any interest/profit. Not only did he violate the accounting principles, he also made a negative impact on the global economy with his scam of over $67 billion in losses that include world wide companies and people. Madoff's whole ponzi scheme caused many companies' shares in stock to drop and caused many wealthy investors to put a large amount of money into his fabricated funds, worsening the economy.

Reflections:
Because Madoff's scam added up to over $67 billion, it resulted in his sentence of 150 years in prison. 150 years seems a long time, espectially since he is at a retiring age, but I think he deserves his sentence becaue it makes businesses become more aware of the consequences if one were to try and cheat off one's clientele. Furthermore, such a scam would directly and indirectly worsen the global economy. It is the last thing everyone would want, especially with the ongoing progress of the economy. Another point to add on Madoff and his scam is he not only violated the accounting principles and made a negative impact on the economy but also did something immoral. Many charital works including Steven Spielberg's were under the hands of Madoff. Throughout this article, it makes me want to think twice before investing in any type of fund, for one does not know how their money is handled under the hands of a stranger.