ECON 3020

Dr. Tufte

Spring 2013

Homework 1

I was … um … shocked when none of you volunteered any information about Bernie Madoff in class on Wednesday. That’s not really acceptable for a business major, so let’s correct it.

First, enter your T-number into the boxes below: one number per box so that the last digit of your number is in the last box on the right.

If you don’t know your T-number, you can look it up in mySUU: “They can see it on their academic detail page https://my.suu.edu/academicdetail or they can use the forgot username tool (which also tells them their T-number) at https://my.suu.edu/accounts/forgotusername.”

Name: ____________________________________________

Part A: Answer 1 question whose number corresponds to the number you wrote in the darker box above. Write your answer in the darker box below.

0) What year was Madoff born? Where? What’s the big industry there?

1) What faith is Madoff? How is this relevant to understanding his victims?

2) Who did Madoff work for? How is this relevant to his ability to commit fraud?

3) What was Madoff instrumental in founding? What do you think this did for his reputation?

4) How was Madoff involved in self-regulation? How is this relevant to his reputation?

5) Was there conflict of interest in the SEC? How so?

6) How many times did the SEC screw up its investigations of Madoff?

7) Who was the first one to tell the SEC that there was a problem with Madoff’s business?

8) How did he know there was a problem?

9) Did large, reputable, Wall Street firms work with Madoff extensively? Why not?

Part B: Answer 1 question whose number corresponds to the number you wrote in the lighter box above. Write your answer in the lighter box below.

0) Does it seem like his wife is guilty too? How is this related to Madoff’s sentence?

1) Does it seem like his sons are guilty too? What happened to one of them?

2) Who turned Madoff in? What tipped them off to the problem?

3) How much was made by the person who appears to have made the most off this scheme? For the most part, did he return the money?

4) About how much money was invested with Madoff?

5) About how much money was paid out to “investors” by Madoff?

6) About how much money is completely missing?

7) What religion were many of the victims? What’s the name for a fraud where you know the victims through a special relationship?

8) When did Madoff assert that he started his Ponzi scheme? How long did it take it to collapse?

9) What baseball team was mixed up in this? How so? For the most part, did that money get returned?