Professional Documents
Culture Documents
Scandals
Mini-Case
Group 5 and 6
Ponzi Scheme
Answer:
Bernard Madoff occasionally called “T-Bill
Bernie” because his promised steady returns
of investment reflect the same security as
investing in government-backed treasury
bills. T-Bills is the safest securities
because it is guaranteed by the government.
Questions:
2. Charles Ponzi was working-class Italian immigrant
who was eager to find success in America. Bernard
Madoff was already a multi-millionaire before he
started his scheme. Does that make one more unethical
than the other? Why or why not?
Answer:
The source of where you came from or the root where you
started the crime is not a basis to consider if the act
is more unethical or not. As long as you took advantage
of someone and caused injury or loss to the other party
with the intent of doing so is already unethical.
Questions:
3. Explain how a Ponzi scheme works.
Answer:
Ponzi schemes are a kind of pyramid scheme
which operate on ``the `robbing Peter to pay
Paul' principle".
Answer:
They are not the same but somehow there is some
similarities. In the Ponzi scheme they continue to
invite investors to pay out the older. While in
the Bequest bank and AG share cases they use
fictitious loans on different bank accounts and
they are snaffling up shares without disclosing to
the exchange. They both did fraudulent act for
personal gain.
Questions:
5. Is the strategy adopted by Mr. Julian Damondong
similar with that of Charles Ponzi and that of Bernard
Madoff? What similarities could you provide? What are
the strategies adopted which made it different from
that of the two schemes?
Answer:
Julian Damondong used the same strategy as Ponzi and
Madoff. They are all about financial scandal that used
someone's money that are being used for their business
and promise to return in a higher amount. They are
different in a way how to convinced someone to invest
in their business and how to return the invested money
like in ponzi's scheme they promise to return as high
as 520%.
Questions:
6. In the case of the Ample Group,what are the
manipulations adopted by Mr. Marko Ripot to persuade
investors to put in money to business?
Answer:
Mr. Marko Ripot adopted the following manipulations to
persuade investors to put money to the business:
1.Obtaining shares in Ample Group without disclosing it
to the exchange.
2. Conspiring at least eight stockbrocking firms to
fake transactions and thus inflate volumes in Ample
Group shares.
3. Insider trading or the illegal practice of trading
on the stock exchange to one's advantage through having
access to confidential information.
Questions:
7. Which schemes served as platform
for perpetrating both the Ample Group and
the Bequest Bank fiascos.
Answer:
Questions:
8. Did the Board of both corporations
acted in the interest of their shareholders
and the general public?
Answer:
Questions:
9. In assessing the structure of both companies,
are these companies in consonance with the corporate
governance principles as presented in the three models?
Answer:
No. Since both Ample Group and Bequest Bank suffered from
different form of financial Scandal, their structure will
never be in consonance with the corporate governance
principles presented in the three model because just in the
regulatory framework, theirs is already illegal, which in the
corporate governance structure of the three models must be
legal. And also the persons composing these corporations do
not give a sound, integrated and a quality information to the
public hence, they scammed people out of billions of money
for their personal gain which is a clear fact not a structure
or characteristic of a good corporate governance.
Questions:
10. The SEC plays and important role
in policing the corporations. In what way
is SEC remiss in these two cases?
Elaborate.
Answer: