Response Essay

Response essay

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1.

Bernard L Madoff was arrested and charged with the massive financial fraud in history. However, no one has exact information about that suspected fifty billion dollar scam except Harry Markopolos, who figured out Madoff scheme before anyone else. CBS Steve Kroft interviewed Harry Markopolos who was an ambiguous financial analyst and slightly strange fraud investigator from Boston.

Markopolos was working for a Boston investment firm when his boss told him about Bernard L Madoff. Bernard L Madoff was engaged in running a gigantic unregistered hedge fund. Markopolos boss wished him to reverse engineer Harry trading strategy to Madoff’s results. Bernard L Madoff was among the most successful businessman in New York and no one could suspect him of fraud ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"YjTY1uZw","properties":{"formattedCitation":"(Only For Education, 2019)","plainCitation":"(Only For Education, 2019)","noteIndex":0},"citationItems":[{"id":2510,"uris":["http://zotero.org/users/local/KZl8ZL3A/items/TJLXJIXW"],"uri":["http://zotero.org/users/local/KZl8ZL3A/items/TJLXJIXW"],"itemData":{"id":2510,"type":"motion_picture","title":"The Man Who Knew","URL":"https://www.youtube.com/watch?v=GCOITCZa9Rg&feature=youtu.be","author":[{"family":"Only For Education","given":""}],"issued":{"date-parts":[["2019"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Only For Education, 2019). Bernard L Madoff used mathematical models to provide his fraud. According to Markopolos, Madoff was either using the insider information to get huge profits or he was running a giant Ponzi scheme.

Markopolo had a financial motive behind the reporting of this fraud. Madoff was his competitor and he wanted to toss him off. He was looking for the sizeable reward in case the fraud involved inside trading. Thus, Markopolo was looking for a sustainable incentive in the form of monetary rewards. He was also hoping for the purposive incentive which the reverse was engineering Harry trading strategy to get Madoff's results. He could then applied that results in his business and get huge returns. Harry Markopolos sent material to FCC five times in 2000, 2001, 2005, and 2007 and finally in April 2008 ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"M5F8rdBm","properties":{"formattedCitation":"(Only For Education, 2019)","plainCitation":"(Only For Education, 2019)","noteIndex":0},"citationItems":[{"id":2510,"uris":["http://zotero.org/users/local/KZl8ZL3A/items/TJLXJIXW"],"uri":["http://zotero.org/users/local/KZl8ZL3A/items/TJLXJIXW"],"itemData":{"id":2510,"type":"motion_picture","title":"The Man Who Knew","URL":"https://www.youtube.com/watch?v=GCOITCZa9Rg&feature=youtu.be","author":[{"family":"Only For Education","given":""}],"issued":{"date-parts":[["2019"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Only For Education, 2019). The Securities and Exchange Commission ignored all his warnings that resulted in disaster.

One method to overcome this disaster can be the establishment of sound financial regulation (Johnston, 2014). If there is deregulation as well as laissez-faire oversight, then the financial sector would be affianced in high-risk investments and deceitful actions. These activities would then also crash the global financial markets. Financial markets have significant value for a robust economy. However, they also attract white-collar criminals. Accordingly, in the presence of regulations crimes can be prevented to guard the fiscal health of the state.2.

There is an ecological system that 'prepares' white-collar crime and criminals. According to Mel Fugate, people witness unethical behavior at work. Harvard business review reported that 98% of employees have reported experiencing unethical behavior at work. This trend is continually getting worse and doubled since 1998-2011. Unfortunately, all leaders in the organizations do not care about this unethical behavior. They think if something is not illegal then it must continue.In organizations, most of the unethical behavior falls into the legal category. They must understand their ethical liability along with legal liability (TEDx Talks, 2015). Legal liability matters as it is the test of smarts but ethical liability is at a higher standard as it is the test of the character. Moreover, ethical liability is expected by most of the leaders. These liabilities lead to the development of an ecological system that 'prepares' white-collar crime and criminals.

Unethical leadership leads to the development of unethical cultures. These cultures then perpetuate unethical behaviors. Furthermore, when leaders see that there are no consequences for the leaders above the law then they do not stop the unethical behaviors (TEDx Talks, 2015). There are many famous leaders about which people even cannot imagine unethical behavior ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"xR9rq7Pi","properties":{"formattedCitation":"(Van Slyke, Benson, & Cullen, 2016)","plainCitation":"(Van Slyke, Benson, & Cullen, 2016)","noteIndex":0},"citationItems":[{"id":2260,"uris":["http://zotero.org/users/local/KZl8ZL3A/items/Q4MG92LK"],"uri":["http://zotero.org/users/local/KZl8ZL3A/items/Q4MG92LK"],"itemData":{"id":2260,"type":"book","title":"The Oxford handbook of white-collar crime","publisher":"Oxford University Press","ISBN":"0-19-049521-9","author":[{"family":"Van Slyke","given":"Shanna R."},{"family":"Benson","given":"Michael L."},{"family":"Cullen","given":"Francis T."}],"issued":{"date-parts":[["2016"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Van Slyke, Benson, & Cullen, 2016).They foster unethical cultures and people who speak up get punished. There must be a code of ethics to check different unethical practices. These will guide not only the leader's behavior but also of subordinates. Thus, when subordinates will find any unethical practice they will report it and save the organization.

References

Johnston, M. (2014). Corruption, contention, and reform: the power of deep democratization. Cambridge University Press.

TEDx Talks. (2015). Legal vs. Ethical Liability: A Crisis of Leadership and Culture | Mel Fugate | TEDxSMU. Retrieved from https://www.youtube.com/watch?v=veXPk4Zeqtk&feature=youtu.be

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Only For Education. (2019). The Man Who Knew. Retrieved from https://www.youtube.com/watch?v=GCOITCZa9Rg&feature=youtu.be

Van Slyke, S. R., Benson, M. L., & Cullen, F. T. (2016). The Oxford handbook of white-collar crime. Oxford University Press.