Read Case 11, “The Fraud of the Century: The Case of Bernard Madoff.” Discuss the long term implications of this scandal and how it relates to business ethics.
One long-term implication that will be a result of the Bernie Madoff scandal is that of a damaged reputation. When Bernie Madoff committed such widespread fraud against his unsuspecting victims, he basically ruined the good name that he held previous to the corruption. In the business field, a person’s reputation means absolutely everything because people have a way of learning about one’s reputation before they have even meet the businessman or businesswoman in person. Those who are deemed dishonest do not make it very far in the field of business due to the fact that they cannot be trusted by others.
As a result of the scandal, the Madoff name will no longer be regarded as highly as it was once when Bernie Madoff and his wife were behaving unethically with the ventures that they executed in the business. Having a last name that is pretty much blacklisted in the financial history will hinder Bernie Madoff’s wife and children if they ever decided that they wanted a long-standing career working in finance. Such doubt will also be expressed toward the people who share the surname but do not have any relation whatsoever to Bernie Madoff, his wife or the Madoff family that came under fire when Bernie went down in the corruption. Although they may not have been participants within Bernie Madoff’s Ponzi scheme, they will still have to put forth the extra effort to prove to their employers, customers and colleagues that they are trustworthy individuals who deserve the chance to prove themselves in the industry. Having the tarnished reputation will also make it difficult for Bernie Madoff to be able to support himself once his prison sentence is over. Upon being released from prison, Bernie Madoff will no longer be able to work in the financial industry again. In addition, the fraud that he now has on his record will prevent him from getting any kind of job that dealt with type of cash handling.
Another long-term implication that will be a result of the Bernie Madoff scandal includes that of widespread paranoia. It is very common for people to already distrust the financial institutions in the United States of America and the people who work for such entities. Now that the news has leaked about the fraud that Bernie Madoff was committing against others, it will be very hard for the general population to continue putting their trust and faith into the financial institutions that they deal with on a regular basis. This is going to place the general populace even further on edge when it comes to making large donations, deposits or investments an in turn, damper the usage of professional financial services offered in society. This is important to business because eventually, the banking systems will go out of business and many people will end up losing their jobs.