Aftermath and Conclusion

Aftermath

Considering the size of the fraud - $65 billion according to the amount recorded by the firm, including fake profits made up by Madoff (CNN, 2013) - the fallout of Madoff’s schemes were of no means little to his investors. The CNBC reported that an approximate number of ‘37,000 people in 136 countries’ were affected, with the ripples still being felt to this day (CNBC, 2018).

Notably, this coverage of CBS News (2009) sheds insight on some of Madoff's victims (7:54 timestamp onwards)

To date, only a certain amount of the principal sum that was invested has been recovered; as of February 2020, the amount from recoveries and settlements only totalled to approximately $14.3 billion out of $19.4 billion approved claims (Madoff Trustee, n.d). This meant that not all investors have managed to recover their principle despite more than a decade passing after Madoff’s arrest.

Source: Madoff Trustee (n.d.)

CONCLUSION

The case of Bernard L Madoff Investment Securities is a exemplary corporate governance failure that avoided detection for many years. Observations have highlighted possible reasons why Madoff was likely to commit fraud and how he managed to get away with it for so long through the identification of the elements of fraud triangle and both failures in internal and external control. Also suggested are possible control solutions to prevent the occurrence of such fraud.

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