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Final Case Analysis

Dulce Duran

South Texas College



In the case of Bernie Madoff, he became aware of his illegal actions, lost loved ones, and

went to jail. Believing that he was following in the most righteous path, but it was not the case

for him. It was until he lost loved ones and got straighten up by the law. Bernie Madoff got

caught in his own illusion of being power hungry and became full of greed. There are principles

and ethics that must be followed in order to stay on the right path. Mr. Madoff lacked many of

these principles and ethical and unethical behavior.

Bernie Madoff

In the case of Bernie Madoff was a person that chose to go in the wrong path and lost a

son and his life in jail. He could have avoided all this if he became aware of all the rules that he

was violating, he would have avoided spending his life in prison and losing his son. This man

had a great reputation with everyone, he would not show his side, the side of him that was

breaking the law and still continue with violating the law. It had to get to a drastic measure of

losing his son in order for him to acknowledge his unethical behavior. He took money from his

own family and lied to their faces. He would take his family’s money and money from other

investors and applied the Ponzi scheme. In the text it states (McKee, 2010), “A ponzi scheme

involves taking money from people who believe they are investing it legitimately, then paying

dividends from investors’ money instead of from profits” (McKee, 2010).

Having this information in mind, the first question that raised in my mind, the family and

or the investors, why did they never ask Mr. Madoff of where the money was going and get

information in his business? In my point of view, when i do invest my hard-earned money in a

business or in any company, I would first get my information of where it is being investing and

the percentage I will be getting back. Or maybe the family did know of the process, since his son

passed before he turned himself to prison. And if they did get any type of idea of the Ponzi

scheme that Bernie was running, all the conspiracies and suspicions would be forgotten and


After all the suspicions and conspiracies of Bernie Madoff, after he got away with six

investigations, he finally told his sons of him violating law and his family and friends trust. One

of two sons committed suicide after his confessions. According to McKee, she states


Prosecutors estimated the dollar amount of the fraud at $64.8 billion, including fabricated

gains and estimated actual losses of $18 billion, lost by nearly 4,800 investors. Madoff

pleaded guilty to 11 felony counts and was sentenced to 150 years in prison...Most people

will never compromise their values and ethics the way did. However, it is likely that at

some point in your life, you will faces with choices that challenge your sense of right and

wrong (McKee, 2010).

Analyzing Madoff

One of the principles that comes to mind in regard to this type of case, would have to be

moral sensitivity. Madoff must have been aware of his actions, and the pain he was causing his

family and friends, but even with his recognition, he continued his unethical behavior. Moral

sensitivity is important to practice individual ethics. In order to solve moral dilemmas, a person

must be able to acknowledge there is an issue in order to solve one. In Madoff’s case, he realized

there was unethical behavior and moral dilemmas but continued his footsteps. The main reason

he did not realize of all of his misdoings, was mainly his power-hungry attitude. He was making

millions of dollars from his family and friends, and believing he was getting away with anything

that crossed his path.


There are six elements that determine a person in to having moral intensity; magnitude of

consequences, social consensus, probability of effect, temporal immediacy, proximity, and

concentration of effect. With these elements, a person can be aware of the cause and effect that

happens through real life. There is an effect if there is a cause. These elements are extremely

important in order to be aware and recognize of ethical issues. For example, if a person were to

create a small problem or an issue, the possibility of this person getting caught or in trouble

would be slim. It can be compared to energy being created in order to move a box, the more

energy it is input to the box, more movement is created into moving the box. The greater the

issue, greater are the consequences from the issue (Johnson, 2016, pg.70).

In order to enhance and be able to realize when a person is on the wrong path, they must

first listen and pay extra attention to their own feelings. When listening to your feelings, this

gives the person an advantage to double think before creating an issue. Being able to take time

on thinking on our actions before actually doing them, can prevent many issues if we recognize

and acknowledge our own actions in time (Johnson, 2016, pg.71).

The second principle that Mr. Madoff did implement in his life, all of the chaos that he

created could have all been avoided if he practiced it; Moral judgement. A person must be liable

and be able to determine right from wrong. The judgement they make, can be understood in more

detail of how to realize from right from wrong in these three topics; cognitive moral

development, unhealthy motivations, and cognitive biases (Johnson, 2016). The cognitive moral

development is also broken down to three different levels: preconventional, conventional, and

postconventional or principled. The first level is preconventional thinking and this type of

thinking can usually be seen in children and people that have suffered brain damage in the brain

regions that deal with the emotions. Conventional thinkers are people with these certain

characteristics; seeking out for help, following the rules, and are able to determine right from

wrong with the help of rules and ethics. Postconventional or principled can be determined as the

people that have their own made up principles and laws, or more like the laws and ethics apply to

society all together rather than individually (Johnson, 2016).

The pervasive acts of Madoff can be considered unethical, and also as destructive

motivations. This type of moral judgement is performed by people that are motivated by their

insecurities, greed, and ego. With these three motivating factors a person is willing to do the

most outrageous act, like stealing from money from friends and loved ones. Not implying that

this type of moral judgement is considered for the people that break the rules, but people that do

use this principle are the ones that cut corners in order to work faster or finish the job faster than

others. Last but not least, the cognitive biases. This principle is the one that let people sleep at

night. Using this principle can make a person believe he or she has done nothing wrong and it is

never their fault. For example, if this person is to perform an unethical action he or she will

always come up with an excuse and get no consequences (Johnson, 2016, pg. 77-80).

Madoff began doing his pervasive actions, whether he was or was not aware of his

unethical behavior and unethical actions, he would take a chance to cheat if it meant more gain

for himself. People that commit unethical actions usually do value their morality but make

exceptions, when it comes to their benefit. If a person, even the kindest and loving person, shows

caring actions towards their morality usually tend to do bad things. For example, the might do

bad things like cutting corners to their taxes, doing false accusations in interpersonal

relationships, and even lie during negotiations (Gino, Understanding ordinary unethical behavior:

why people). According to this article (Gino, Schweitzer, 2011):


Unethical acts can cause substantial damage to interpersonal relationships, organizations,

and economic systems. Several well-documented ethical failures have caused remarkable

harm to individuals and society as a whole, including those involving Bernie Ebbers and

Bernie Madoff, as well as corporations such as Enron, Tyco, and Worldcom. This

worrisome evidence and its economic consequences beg the question of why people

engage in unethical behavior...Thus, the decision to behave unethically commonly

requires people to weigh two opposing forces: the desire to maximize self-interest and the

desire to maintain a positive moral self-image and future relationships. To resolve the

internal conflict between the short- and long-term benefits of dishonest acts, individuals

must exert self-control (Gino, Schweitzer, 2011).

Bernie Madoff did none of these principles, he did not acknowledge his actions or the

pain he was creating, he did acknowledge consequences and was sentenced to many years in

prison. He has made any other mastermind seem like a newbie. We can analyze Madoff as a

greedy, unethical, but in the long term we can analyze what needs to be avoided like for instance

all his misdoing he did with his family and friends.

In conclusion, it is all up to us in the choices that we do in our life, and the risks that have

to be done in order to accomplish what is wanted. But, what if what we want could cause chaos,

is it worth losing everything in order to get what is wanted? Bernie Madoff did just that, he

risked it all, he knew about what he was doing he knew he was violating the law and his loved

ones. He risked it all and lost everything including one of his two sons. We have to become

aware of the choices we make and analyze if it is the best choice for ourselves and for our

family. If we do not become aware of our mistakes who will? Each and every person needs to

accommodate these set of principles and ethics, in order to be aware of their own actions towards



Johnson, C. E. (2016). Organizational ethics: A practical approach. SAGE.

McKee, Annie. Management: A Focus on Leaders. Pearson, 2010.

Gino, F., Schweitzer, M. E., Mead, N. L., & Ariely, D. (2011, 07). Unable to resist temptation:

How self-control depletion promotes unethical behavior. Organizational Behavior and

Human Decision Processes, 115(2), 191-203. doi:10.1016/j.obhdp.2011.03.001.


Gino, Francesca. Understanding ordinary unethical behavior: why people who value morality act