Bernard Lawrence “Bernie” Maddox, a former Chairman of the board of directors and on the board of governors Of the NASDAQ (National Association Of Securities Dealers Automated Quotations) stock market, hedge-fund investment manager and owner of a brokerage house, was accused of having defrauded thousands of investors of an estimated $65 billion. The main goal of this project is to describe and analyze how a white collar criminal could defraud many investors of billions in our time despite all the corporate governance mechanisms.
In fact, our problematic during this project is to investigate the following issue: What were the failures in the Madam’s affair? We are interested in studying an example of corporate governance failure mainly because several failures have been observed these last few years. Thereby, it is important to understand what the gaps In such cases are, and try to find mechanisms to prevent recurrences. In this case, the corporate provenance failure is not restricted to the company but more to a part of the financial system.
We therefore focus our study on Madam’s case that represents one of the most scandalous malfeasances of the 21 SST century. Indeed, the Maddox Opinion scheme provides an important case study on how market regulatory, gatekeepers, watchdogs and other parts Of corporate system fail to discover Madam’s scam. Moreover, through this case, we will understand some important principles, namely: How do hedge funds work and what was the responsibility of different third parties? What does Opinion scheme consist in? How can the market stop the excesses committed by the managers without the need of mechanisms?
Which phenomenon or organism “help” (“did not stop”) Maddox? Primary information has been obtained through internet in order to get deeper knowledge of the Bernard Maddox scandal. “Chasing Maddox’ and “leafier Maddox’ were two documentaries that well reflect the Madam’s story. To understand some principles of corporate governance, we go through the consultation of some books. And for the research question, we read different papers and articles and try to give some personal view thereby to ensure that he information is not biased.