Early Western Philosophy of Religion Essay

of the classical three laws of rational thinking. Claiming that every proposition is either true or not true, the first law summarily excludes the possibility of a middle-of-the-road alternative between two extremes. The second law states that it is not possible for something to be both true and not true at once and in the same contextual framework. The third law ascribes specific traits to everything. In other words, no two things are similar to each other (De Riemer, 2009). Augustine, the first Archbishop of Canterbury and one of the torchbearers of the Gregorian mission, challenged the validity of the law of the excluded middle by raising questions about the moment of death, when a person is alive and yet to die. Such a brief transition, according to him, does not conform to the basic assumption stated in the law of the excluded middle, for the dying instance falls in a temporal void where this law is nonfunctional (Stump & Kretzmann, 2001, p. 112). He, however, supported the law of noncontradiction on the basis of having certitude of knowledge about a given statement. Thus, he argued that â€Å"If there is one sun, there are not two† (Ibid, p. 163). In a way, Augustine endorsed inductive reasoning to substantiate his viewpoints on the foundational laws of thought. However, when it came to analyzing the law of identity, he discarded epistemological reasoning and embraced the core of Christian worldviews. The law of intrinsic essence of every being was, according to his opinion, a hypothesis that is relative to the monistic identity of the highest form of Being, e. g. God Himself. In other words, it is possible to develop collective identity given that it finds a stake similar to God’s image (Ibid, p. 87). Cosmological accounts of creation have been put forward by many of the early as well as modern thinkers. Various scientific theories have proved beyond doubt that our universe is not infinite. This proposition is tempting enough to ask what lies beyond the periphery. St. Thomas Aquinas, the medieval theologian and one of the seminal thinkers of his time, argued vociferously in favor of God’s existence on a cosmic level. His magnum opus Summa Theologiae is considered to be one of the treasure troves of philosophical treatises on creationism. Aquinas takes natural theology as the starting point of his argument. For nature, laws of existence are not rigid. It is possible for natural things to be born and destroyed, implying that everything is and is not at the same time. But it is truly impossible for anything to outlast its own expiration. What this means is that any form of existence is preceded by another form and that this chain continues backward till the creation of something that served independent of its own necessity for the sake of its succeeding creations. That something is nothing but what we believe as God (Meister, 2009, p. 67). I, despite being an atheist, strongly endorse the line of reasoning Aquinas used to prove God’s existence. He arrived at his intended position by means of teleological assumptions and subsequent cancellations – if A is true, A cannot be not true. This method of double negation, I believe, holds the secret to success of his originative theological account. References De Reimer, H. T. (2009). Infallible Logic, A Visible and Automatic System of Reasoning. Charleston, South Carolina: BiblioBazaar, LLC. Meister, C. (2009). Introducing Philosophy of Religion. New York: Taylor & Francis. Stump, E. , & Kretzmann, N. (2001). The Cambridge companion to Augustine. New York: Cambridge University Press.

Madoff Scandal

Contents Introduction2 Early Career2 The Firm3 Sales Strategy4 Investment Strategy5 The Scandal7 He was not alone9 The Markopolos Whistle11 The collapse13 Charges and Sentence13 The Victims14 2009 Ponzi Schemes16 The SEC Failure17 SEC post- Madoff19 Hedge Fund Transparency20 Conclusion21 Bibliography25 Tables Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009)15 Table 2: 2009 Ponzi Scheme SEC Charges17 Figures Figure 1 Fairfield Sentry vs Gateway6 Figure 2 Madoff Investor Funds (taken from http://orgnet. com/madoff. html)7 Introduction Operating from central Manhattan, Bernie Madoff developed the first and biggest global Ponzi scheme, an event of greed and dishonesty that lasted for more than 20 years, in which $65 billion dollars vanished from the pockets of some of the world’s richest people, charities and ordinary investors alike. This scheme lasted longer than any other white collar crime in history and along the way ruined countless individuals and organizations. The Madoff Ponzi scheme has changed the rules of trust that governed the money game. † Unlike other similar schemes, Madoff’s Ponzi scheme also scammed wealthy and investment savvy individuals that Madoff associated with. Bernard Madoff is a former financier, American hedge-fund investment manager, chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations) stock exchange, and chairman of the firm Bernard L. Madoff Investment Securities LLC. He is the main conspirator of the history’s largest investor fraud committed by a single person. As a result of his act, Madoff was sentenced on June 29th, 2009 to 150 years in prison for crimes that the judge called â€Å"extraordinarily evil†3 and imposed a sentence that was three times as long as the federal probation office suggested and more than 10 times as long as defense lawyers had requested. Early Career Bernard Lawrence Madoff was born in New York City on April 29, 1938 and grew up in a predominantly Jewish neighborhood. He earned a degree in political science from New York’s Hofstra University in 1960 and founded the Wall Street firm Bernard L. Madoff Investment Securities LLC the same year. 1 He was a pillar of finance and charity. As an outstanding philanthropist he served on boards of nonprofit organizations around the world such as businesses, charities and foundations, many of which were entrusted by his endowments. The firm started as a penny stock trader with $5,000 dollars he saved from working as a sprinkler system seller and lifeguard. In the beginning the firm started trading common stock over the counter (OTC) through the National Quotation Bureau using Pink sheets. It later challenged the New York Stock Exchange (NYSE) old brokers by using powerful marketing techniques to win clients and promoting electronic trading using innovative computer information technology. His firm grew with help from people around him such as his father-in-law, who referred him to friends and family. Madoff helped created NYSE rival, NASDAQ, where he later became the chairman. The Firm Bernard L. Madoff Investment Securities LLC functioned as a securities broker and/or dealer in The United States and internationally. Headquartered in New York City, it provided executions for dealers, brokers and financial institutions. The firm had been one of the top market makers on Wall Street with Madoff as the principal face. In plain terms, a market maker is an institution (brokerage company or bank) that is ready to execute stock trades (buying and selling) at every second of the trading day and charges a small fee for every trade via the use of a spread in the ask or bid price. It functioned as a third-maker provider by directly implementing commands from retail brokers. At one point, Madoff Securities was the largest market maker at the NASDAQ and in 2008 was the sixth largest market maker on Wall Street. Sales Strategy Around the 1970s, Madoff began administrating money for investors, some on them he knew personally and several others who belonged to clubs he was member of. He attracted billions of dollars and several large hedge funds also invested in the firm because he did not charge usual fees and only collected fees for processing trades. Madoff offered modest and steady returns to exclusive clients instead of offering high returns to all clients, giving the appearance of his firm to be exclusive. The firm’s annual returns were abnormally consistent, a key factor in achieving the fraud. Most business men believed the story that a single person could generate returns of 12 to 13 percent a year trading the stock market no matter what happens without a single down quarter. 7 Some of these people applied for membership to the clubs that Madoff was a member of, in order to meet and be accepted by him. In addition, he never hustled anyone for investing with him; instead he let them come to him. Thus, he created this aura of exclusivity around him and everyone wanted to be a part of his club. One of the groups targeted by Madoff was the â€Å"Jewish circuit. Being Jewish, Madoff attracted many wealthy Jewish people he met at country clubs on Long Island and Palm Beach. This was an Affinity Ponzi Scheme, as it was called by Newsweek article. 7 Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, and the elderly or professional groups. Around 1995, some of the most prominent Jewish individuals in finance and industry began to invest with Madoff. 1 His most effective recruiter, Jacob Ezra Merkin, was president of the Fifth Avenue Synagogue, member of Yeshiva University, Carnegie Hall and other nonprofit organizations. Mr. Merkin started the investment firm named Gabriel Capital Group. Embraced by philanthropies and installed in a superior position of trust, Merkin seemed to be a Wall Street wise and trusted person to manage other peoples’ money. 1 Investment Strategy His investment strategy consisted of purchasing blue-chip stock, from well established companies like Coca Cola, Intel and General Electric, having stable earnings and no extensive liabilities, and taking option contracts on them. Typically, a position will consist of the ownership of 30-35 S&P 100 stocks, most correlated to that index, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. † When done correctly, this strategy creates boundaries in the stock and protects them against a quick decline in the share price. The investment strat egy used in Madoff’s feeder fund, Fairfield Sentry, is called the split-strike conversion strategy and involves a combination of stocks and options. In plain terms, Madoff bought 40-50 stocks from the S&P 100 index. He then bought put options on the index at strike prices below the market's current level and sold call options above the index's current price. It is similar to using collars, an options strategy that limits losses along with the gains for a particular stock. The following chart outlines the returns of the Madoff feeder fund against Gateway, a fund running the same split strike strategy. A feeder fund is a fund that conducts virtually all of its investing through another fund. Madoff used such feeder funds to mask the fact that he’s acting like a hedge fund in order to avoid SEC investigation. Figure 1 Fairfield Sentry vs. Gateway After the stock market crash of 2001, Gateway follows a downward path for a period of almost 3 years, before it starts to gain positive traction that will last until mid 2007, just in time for the mortgage meltdown that ignited one of the worst recessions in history. Interestingly enough, Madoff’s returns shows no signs of volatility and continue to gain positive traction with only minor fluctuations. Apparently he worked with multiple feeders and the network of individuals and funds were set up to pass money to him. Most of the investors did not know that all of their money was going to the same place: Madoff’s firm. The next diagram depicts the depth and interconnections of Madoff’s funds. The directions of the arrows represent the direction of the money flow. Figure 2 Madoff Investor Funds The Scandal The investment scandal was unveiled with Madoff’s confession. He reportedly confessed to his two sons during the first week of December 2008 that his business was â€Å"giant Ponzi scheme. † Madoff sons, Mark and Andrew, turned him in to U. S authorities on the day after his confession. On December 11, 2008 he was arrested and charged with securities fraud; also known as stock fraud and investment fraud, securities fraud covers a wide range of illegal activities, all of which involve the deception of investors or the manipulation of financial markets. He said to the agents that there was no innocent explanation to the fraud that cost clients $65 billion dollars. He traded and lost money and paid investors with money that was not there. How did Bernard Madoff set the most audacious fraud in history? Madoff said that had absolutely nothing, everything was just a big lie and it was essentially a giant Ponzi scheme. No one ever questioned the investment strategy and resources of the firm. No verification of the accounting was ever made. 7 A Ponzi scheme is a type of illegal pyramid scheme. It is named after Charles Ponzi who became infamous throughout the United States for using the technique in the early 1920s. The Ponzi scheme operation pays returns to investors from their own money or from money paid by new investors, rather than from actual return earned. This type of schemes attracts many investors because it offers high and consistent returns that other investments cannot provide. Eventually the system is destined to collapse under its own weight because earnings are usually less than the payments. â€Å"The business had been insolvent for many years. † Madoff was lying to his clients when he said he was investing their money and generating stable returns. 3 The money of new clients was used to pay clients who wanted to cash out. Some may still ask the question of why he started the scheme in the first place. A possible explanation of his actions could be that he incurred some trading losses and in order to recoup them quickly, put a quick plan together where he would shuffle money between new and old accounts. Initially he may have had the intention of paying all the investors back, but since his real investing strategy did not work fast enough, he stuck to the scheme. His initial intentions were probably not to carry on indefinitely to its present point. However, once his real trading strategies were not producing enough returns to cover his advertised returns (when the market was performing well), he continued until he lost control. If the economy were not in a recession, he would most likely keep going. The only reason he gave up is because investors started withdrawing money and he could not cover the upcoming withdrawals. If the economy kept going strong, Madoff would have been able to attract new money and continue living his double life as usual. He was not alone Few people knew that Bernard Madoff had a highly structured second life for more than 20 years. Bernard Madoff confession and the afterward fraud scandal triggered the investigation to uncover Madoff’s mysteries. He initially claimed that he committed the crimes all by himself, but because it extended trough decades and continents â€Å"a fog of suspicion immediately engulfed Madoff family members who worked at the firm, as well as employees and business associates. There were some small clues on how he pulled off the massive fraud, for instance, the 1980s server that Madoff refused to replace even though some data had to be typed by hand. When government investigated the machine it discovered that it was the heart of the fraud. The statements printed out from this old IBM machine showed trades that were never made. 15 First, the in vestigators turned to the accounting department. Madoff’s accountant David Friehling was also charged with securities fraud, investment adviser fraud and false filings made to the SEC. Unlike any other professional who protects the interests of his clients, accountants have the commitment to protect the public by ensuring accurate financial reporting. â€Å"They are the first line of defense against fraud. † Friehling’s duty at the investment firm was to ensure clients’ securities and money were they when they wanted to withdraw it. In addition, the SEC filed a civil enforcement action against him alleging that he did not perform his duties as an auditor. David Friehling was the auditor and the bookkeeper, which means that he audited his own work. It’s no great surprise that he found nothing wrong with any of his own work. †18 Next, they turned attention to the person second in command at Madoff’s firm. Frank DiPascali was Madoff’s right hand man for 33 years and his unofficial title was director or of options trading and chief financial officer. Nobody was sure what he did or what his official title was, but everyone knew he was a big deal. DiPascali rose to the position of CFO despite his lack of education and financial experience industry. On August 11, 2009, he pled guilty to ten counts of fraud related to the Madoff investment scandal and he is currently trying to negotiate his sentence (to be set on May 2010) in exchange of information of additional people involved in the scheme. Madoff trusted DiPascali completely to keep the secret of the scam operations. DiPascali manipulated fake returns on some key investors and if one of these clients had large gains, he would fabricate a loss to reduce the tax bill. 15 This means, if true, that these investors knew their returns were suspicious. JP Morgan Chase was the primary bank Madoff used to make his Ponzi deposits. According to one estimate, his deposits totaled $5. 5 billion sometime in 2008, and the after-tax profits grew to $483 million over a period of sixteen years. The bank withdrew a total of $250 million in the summer of 2009, due to suspicions arising from due diligence in Madoff’s investment-advisory business. According to a pending lawsuit against the bank: â€Å"Upon acquiring this knowledge, Chase entered into a conspiracy with Madoff and BMIS in violation of the federal Racketeer Influenced and Corrupt Organizations Act (â€Å"RICO†), 18 U. S. C.  § 1961 et seq. 19Depending on the outcome of the lawsuit, along with many more to come, JP Morgan Chase may have to shell out hundreds of millions of dollars in settlement. Madoff’s family was also the center of attention to find clues of Bernard Madoff’s fraud, although none of them have been charged or accused so far. During the plea hearing Madoff took all the responsibility of the fraud most likely to c over up his family. Peter Madoff, Bernard Madoff’s brother, was the chief compliance officer of the firm. He was in charge of ensuring adequate internal control and that the client funds and securities were properly protected. Even though Madoff sons, Mark and Andrew, did not have any position with the investments firm, they were involved in other areas within the firm. They are the ones that turned Madoff in. The family must have known about the long running scheme and should be indirectly responsible for some of the investor losses incurred, as the scheme had supported their lavish lifestyles. Irving Picard, the court appointed trustee in charge of liquidating Madoff’s firm, sued some of the Madoff family members (two sons, brother, niece) for $198. 7 million seeking defrauded investor damages. The Markopolos Whistle Bernard L. Madoff Investment Securities LLC firm was inspected at least 8 times and he was personally interviewed twice in a period of 16 years by the SEC and other regulators before being uncovered. For years, he avoided regular reviews by saying that he was managing accounts for hedge funds instead of running an investment advisory business. During the years of 1999 and 2000 the SEC was worried that the firm was violating a trading rule and sent examiners to investigate but in response Madoff summarized new procedures to deal with the findings. 12 In 2001 some outsiders were becoming suspicious of Madoff’s firm activities. Harry Markopolos, Barron’s, a Dow Jones & Co. publication and Marhegdge, a hedge fund trade publication, raised concerns about Madoff’s steady returns. 12 In 2005 Mr. Markopolos met with SEC investigators in New York and prepared a 21-page report entitled â€Å"The World’s Largest Hedge Fund is a Fraud† summarizing his concerns. The memo specified 29 red flags and in part concluded that â€Å"Bernie Madoff is running the world’s largest unregistered hedge fund† and â€Å"†¦yet since Bernie Madoff is not registered as a hedge fund but acting as one via third party shields, the chances of Madoff escaping SEC scrutiny are very high. 12 The SEC examined Madoff and did not find any violations. He failed for 8 years to get SEC to step in until the scam collapsed and prompted Madoff to confess. In his report, Markopolos clearly outlines some pretty obvious (by now) facts that the regulatory authorities omitted. Here is a short summary of some points that stood out: †¢If the Madoff returns are legitimate, they’re due to insider trading (unlikely scenario). If they’re illegitimate, they’re due to the setup being a Ponzi scheme (likely scenario). †¢The secrecy around the fund’s assets doesn’t make sense as a typical hedge fund would brag about such returns. The secrecy is probably due to the fact that Madoff doesn’t want the regulatory authorities to know he exists as a secret hedge fund. †¢Since Madoff is a broker-dealer, he can generate any trade tickets he wants, therefore generate false information. †¢The Madoff family has held important leadership positions in NASD, NASDAQ ® and other prominent industry bodies that would not be inclined to lead an investigation. †¢Out of 174 months, only 7 months (4%) saw negative returns in Madoff’s Fairfield Sentry fund. No MLB hitter bats . 60, no NFL team has ever had a 96-4 record out of 100 games, and no money manager is up 96% of the months. †¢Since Madoff is not registered as a hedge fund but acting as one via third party shields, his chances of escaping SEC investigations have remained high. The collapse The final weeks of the biggest scheme in history began on December 2008 when the market continued to fall. Madoff struggled to keep the scheme afloat wh en investors tried to withdraw $7 billion from the firm. In typical Ponzi scheme fashion, Madoff desperately needed money from new investors to pay off existing investors. Ten days before his arrest, he received $250 million dollars from Carl Shapiro, a 95 year old philanthropist and entrepreneur, and one of Madoff oldest friends. Mr. Shapiro helped Madoff launch his investing career by giving him money to invest in 1960. He also asked others to invest including Wall Street financier Kenneth Langone. Madoff said he was raising money, between $500 million and $1 billion, for a new investment vehicle for exclusive clients. Mr. Langone declined to invest. 13 Mr. Langone’s denial could have been based on quantitative analysis that most of Madoff’s investors failed to undertake. In addition, by the time Madoff proposed the new investment vehicle to Mr. Langone, rumors of his questionable returns had increased considerably. Charges and Sentence â€Å"On March 10, 2009, a Criminal Information was filed in Manhattan federal court charging Bernard L. Madoff with eleven felony charges including securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (â€Å"SEC†), and theft from an employee benefit plan. † The case is United States v. Bernard L. Madoff, 09 Cr. 213 (DC). The criminal information or complaint declared that Madoff had defrauded his clients for $65 billion. On March 12, 2009 he pleaded guilty to all eleven counts and on June 29, 2009 he was sentenced to 150 years of imprisonment at the Metropolitan Correctional Center in New York (he was later moved to a prison in Butner, North Carolina) and $170 billion in restitution. A breakdown of his sentencing is given below:19 †¢40 years for two counts of international money laundering †¢20 years for securities fraud †¢20 years for mail fraud 20 years for wire fraud †¢20 years for false filing with the S. E. C. †¢10 years for money laundering †¢5 years for investment adviser fraud †¢5 years for false statements †¢5 years for perjury †¢5 years for theft from an employee benefit plan The Victims Some of Madoff’s clients included hedge funds, banks, charities, universities, astute financiers, hospitals, film prod ucers and many others. According to the latest Trustee Interim Report assigned for fund recovery, as of June 30, 2009 the recovery of funds from Bernard Madoff has been $1,088,507,818 with an additional $13. billion in incoming recovery requests. A short list of the investors with the largest losses follows: CLIENTTYPE OF CLIENTEXPOSURE Fairfield Greenwich Group Financial Firm$7. 5 Billion Kingate ManagementFinancial Firm$3. 5 Billion Tremont Group HoldingsFinancial Firm$3. 3 Billion Banco SantanderFinancial Firm$3. 1 Billion of client exposure Bank MediciFinancial Firm$2. 1 Billion Ascot Partners, run by Jacob Ezra Merkin, GMAC’s chairmanFinancial FirmMost of the firm's $1. 8 billion in assets Access International AdvisorsFinancial firm$1. 4 billion Fortis Bank NetherlandsFinancial firm$1. billion Union Bancaire PriveeFinancial firmunder $1. 08 billion HSBC HoldingsFinancial firm$1 billion Picower FoundationCharity$958 million Carl ShapiroIndividual$545 million Carl & Ruth S hapiro Family FoundationCharity$145 million Yeshiva UniversityCharity$100 to $125 million Hadassah, the Women's Zionist Organization of AmericaCharity$90 million Korea Life InsuranceInsurer$50 million Fairfield, Conn. pension fundPension fund$42 million Madoff Family FoundationCharity$19 million Jewish Community Foundation of Los AngelesCharity$18 million Alicia KoplowitzIndividual$14 million Table 1: List of Madoff Clients (taken from the â€Å"The New York Times†, last updated June 24, 2009) As if the loss of fortunes were not tragic enough, there were also 2 suicides that stemmed from the scandal. Rene-Thierry Magon de la Villehuchet, 65, who lost more than $1 billion of his own and his investors’ money, took his own life on December 23, 2008 after realizing that he would not be able to recoup his investment. The Magon de la Villehuchet family was one of the most prominent families in France, building its fortune in the shipping industry during the 17th century. William Foxton, 65, was the second suicide victim of the scandal, but unlike the first victim, he had never heard of Madoff and lost his investment through one of Madoff’s feeder funds. 2009 Ponzi Schemes The now infamous Ponzi scheme may have been popularized by Bernie Madoff during the present year, but the SEC has been uncovering such schemes at a rapid pace since the Madoff scandal. The following is a list of all the Ponzi schemes charges the SEC has issued in 2009 so far: DATEDEFENDANTSPONZI AMOUNT (In millions) 1/08/09Joseph Forte, Joseph Forte LP$50 1/15/09James G. Osie, CRE Capital$25 /19/09Robert Allen Standford$8,000 2/19/09Marvin Cooper, BCI Inc$4. 4 3/11/09Anthony Vassalo, Kenneth Kenitzer$40 3/26/09Millenium Bank$68 4/01/09Edward T. Stein$55 4/06/09Weizhen Tang$50-75 4/08/09Shawn Merriman$17-20 4/09/09Robert P. Copeland$35 4/13/09Clelia Flores, MRI Inc$23 6/09/09Peter Son, Jin Chung$80 6/10/09Gregory Bell & Lancelot Mgmt$2,000 6/15/09David J. Hernandez$11 6/24/09M ichael C. Regan, Regan & Co$15. 9 6/24/09Moises Pacheco, AMM, BD&C$14. 7 6/28/09John Bravata, Richard Trabulsy$50 9/08/09Philip Barry, Leverage Group$40 9/28/09Frank Bluestein$250 10/16/09Homepals14. 3 Table 2: 2009 Ponzi Scheme SEC Charges According to the SEC website, 2008 SEC Ponzi charges totaled $470 million (excluding Madoff charged on December 11), compared to 2009’s approximate amount of $11 billion YTD. The earliest Ponzi scheme on SEC recent records dating back to 1997 is reported on July 4, 2001 for $67. 5 million. There is no mention of another such scheme until June 9, 2005 for $6 million, while the next such scheme is reported on July 24, 2007 for $41. 9 million. The SEC Failure Bernie Madoff was so above suspicion that he even got his name informally applied an SEC rule. The â€Å"Madoff exception† allowed market makers such as Mr. Madoff to sell stock short to facilitate a customer buy order, even if the stock in question was ticking downward. Under a rule that was in place until 2007, short sales on a downward-ticking stock were normally prohibited. In a short sale, investors borrow stock and sell it, hoping to repay with shares bought at a lower price. Madoff was frequently and unsuccessfully investigated by the SEC. His firm’s first contact with the SEC was in the early 90’s when he hired two accountants, Frank Avellino and Michael Bienes, for his first small investment advisory business. The accountants helped him recruit more than 3,000 clients. They were violating the law selling unregistered securities; however they were not accused of securities fraud. The SEC shut down the Avellino & Bienes operation and forced Madoff to return more than $400 million to investors. 13 In 2000, the SEC Boston office is contacted by Markopoulos where he outlines his first concerns about Madoff. Unable to persuade an investigation, Markopoulos is told to contact the SEC New York office. 13 However, no further investigation is conducted partly because the information presented to the SEC is not understood by its investigators due to its highly complex nature. Since then many other letters from concerned outsiders are being sent to the SEC about Madoff. No action is taken from the SEC until January 2006 when it launches an investigation prompted by the Markopolos memo. After an interview with Madoff in May 2006 in its case-closing recommendation, the SEC said it â€Å"found no evidence of fraud. †13 After the uncovering of the investment fraud, the SEC conducted an internal investigation entitled â€Å"Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi scheme. A 477-page report was released in September 2009 were the SEC Office of Inspector General (OIG) analyzes the SEC failure to uncover Madoff’s Ponzi scheme, how it missed all the red flags and identifies recurring opportunities to find the fraud and how unsuccessful their efforts were. In a recent PBS interview with Henry Pitt, former SEC commissioner from 2001-2003, Mr. Pitt indirectly pointed out some SEC flaws:31 †¢The SEC’s exami nation program was put in place in the mid 90’s is fatally imperfect. The total staff of the SEC is 3,500 people (not all of them do examinations) and there are 11,000 registered investment advisers subject to the SEC’s jurisdiction. There will never be enough money, enough people and enough sophistication to conduct examinations the way they needed to be conducted. †¢The law for broker-dealers was setup in 1934 and in 1940 for investment advisers. The relationship between the two entities is treated separately. In today’s marketplace, this viewpoint needs to change. This is one of the reasons why Madoff continued to be in business after the Avellino and Bienes scandal. The SEC was heavily focused on legal analysis, while not paying too much attention to economic and financial analysis. †¢There needs to be more hedge fund transparency, something the SEC has failed to convince the courts to do so up to now. Arthur Levitt Jr, former SEC chairman from 1993-2001, maintains a view that supports a more focused approach on risk-assessm ent within the SEC. Mr. Levitt has been drawing criticism lately regarding his personal and business relationships with Madoff. When asked about SEC resources, he raises a valid point: â€Å"Since 2002, the number of investment advisers — such as Madoff Securities — has increased by 50%. Yet enforcement resources have been flat or even reduced. The number of SEC enforcement division personnel was cut by 146, to 1,192 in 2007 from 1,338 in 2005. †37 SEC post- Madoff Since the Madoff scandal, the SEC has been taking significant steps to reduce the probability that such frauds will occur in the future. A summary of the post-Madoff Reforms are included on the following list: †¢Safeguarding Investors’ Assets †¢Revitalizing the Enforcement Division †¢Revamping the Handling of Complaint and Tips †¢Advocating for a Whistleblower Program †¢Conducting Risk-Based Examinations of Financial Firms Increasing Focus on Agency-Wide Risk Assessment †¢Improving Fraud Detection Techniques for Examiners †¢Recruiting Staff with Specialized Experience †¢Expanding and Targeting Training †¢Seeking more Resources †¢Integrating Broker-Dealer and Investment Adviser †¢Enhancing Licensing, Education and Oversight Regime for †Å"Back-Office† Personnel In summary, the changes focus where the SEC had previously failed: enhancing investigator financial education, providing incentives for whistleblower tips, allocating additional resources. Hedge Fund Transparency One of the SEC’s attempts towards hedge fund transparency came in 2003 where the entity unsuccessfully tried to enforce the registration of a majority of hedge fund managers by re-interpreting the definition of ‘client’ to an investment-adviser. This rule would have required hedge funds to register as investment advisers. This attempt was dismissed by the U. S. Court of Appeals for the District of Columbia on June 23, 2006. The hedge fund industry as a whole is against regulation in part because such regulations would reveal the trading strategies employed internally to the competition. This is a viable argument in favor of the hedge fund industry, however not viable enough to prevent further regulation, at least in the US markets. A possible suggestion could be to create a quasi-government committee made up of various former heads of finance-related industries that are given the power to review and approve hedge funds. The information they have on their hands is solely between them and certain high level members of the SEC, with secrecy comparable to that of the likes of the Department of Defense. In this way, hedge funds avoid public disclosure of their strategies, while the SEC accomplishes the regulation they have always been pursuing. There could be different levels of approval according to the market value of a hedge fund. While this suggestion may not be the most viable, it is serves an option for both the SEC and hedge fund managers. Conclusion Given its impact on the financial world, it would seem that this scandal could have been prevented much earlier. Why did FINRA (Financial Industry Regulatory Authority), SIFMA (Securities Industry and Financial Markets Association), SEC, and other regulatory bodies not act quicker? Below follows a list of possible concluding points for such long inaction. The world to which the securities laws apply — laws now 70 and 75 years old — is light years away from the world we have today. †34 Point 1: Bernie Madoff was a legend on Wall Street. He and his family were among the elite of the Street and, due to his long career and connections, he obtained a God-like status on the Street and as someon e who could do no wrong. As any religious individual, they do not question God’s actions, they just believe. Furthermore, individuals who commit fraud usually do not have Madoff’s impressive background, connections and reputation. Madoff used his status on the Street as an advantage to raise more money and fly under the radar for as long as he did. A scheme is the last thing one would expect from someone whose resume includes a time as former chairman of NASDAQ. In addition, Harry Markopolos admits that he did not contact FINRA due to his family’s connections with the regulatory authority. In particular, Andrew Madoff served as an incoming District 10 member of FINRA in 2003 while his brother Mark served on FINRA’s Mutual Fund Task Force in 2004. Also, Bernie Madoff’s brother Peter served on the board of directors of SIFMA. Point 2: Madoff was not using any illegal trading strategies. The split-strike option is a legitimate strategy that has been employed for years by a few experienced industry professionals, such as Harry Markopolos. It is a highly complex strategy that even Markopolos in his SEC paper admits that few really understand, hence many of Madoff’s experienced investors failed to quantitatively analyze, yet they rather based their assumptions on word of mouth. In the same token, the SEC did not pay attention to something that they could not completely understand and did not put as much emphasis as they should have. Point 3: Red flags were not raised initially due to the overall economy’s performance. When the market was performing well, a 12% return was within reasonable lines of S&P returns. Some flags came up when the market started producing negative returns, yet Madoff’s returns kept their usual steady, profitable path. If the market were still performing neutral to slightly above neutral levels, chances are that the scandal would still lie beneath fake returns. Point 4: The SEC did not act any sooner possibly due to the psychological structure of its own investigators. A typical SEC investigator is young, non-aggressive, and lacks enough resources to fully take on such a case single-handedly. The aggressive and talented individuals get absorbed by Wall Street due to obvious lucrative reasons. This is not to say that the SEC does not employ talented, aggressive individuals; all that is being conveyed here is that probably some of the investigators’ psychological and character structure coupled with the lack of resources was a key mixture of ingredients the organization was missing. Plus, in order to raise such a high stakes complaint an SEC investigator would have to go through the usual bureaucratic red tape inherent in government process. Point 5: The SEC is made up of lawyers, thus lack the experience and knowledge of financial markets. The institution is not a financial entity that relies on satisfying shareholder returns; it is a regulatory authority that interprets and applies the law. Lawyers are not fund managers, thus are not familiar with the complexities and headaches that come with such territory. Point 6: The SEC failure in the Madoff case is yet another example of a ‘failure’ of the invisible hand to regulate capitalism’s promotion of self-interests. While de-regulation of capital markets was very instrumental to transform the US economy into a global powerhouse, lack of de-regulation brought upon the Madoff scandal along with one of the worst recessions in US history. If the markets were more heavily regulated from the beginning, one can only speculate on how far the US economy could have reached. In his testimony to Congress, Allan Greenspan admitted that his ideology of free market capitalism has a major flaw: â€Å"I made a mistake in presuming that the self-interest of organizations, specifically banks, is such that they were best capable of protecting shareholders and equity in the firms. † In short, Greenspan’s flaw was a variable he never considered as part of his ideology of free market capitalism: human greed. Not surprisingly, Greenspan’s flaw has influenced many areas of free markets from credit-default swaps and mortgage lending tactics, to unregistered hedge fund management practices. Bernard Madoff has left his imprint on Wall Street's ‘disgraced' list and his case will be used as an example to further regulate hedge funds and transparency needed in the financial industry. His life story of rising to the top and falling from grace highlights the double-edged sword of capitalism's laissez faire attitude. It will be very interesting to see how effectively the regulatory authorities will tackle this issue, as Madoff's case moves from the public eye to university case study in the coming years. Bibliography

Comparison of Past and Present Students Essay

I. Introduction People often remark how different the students of today are to those in the past. Each generation claim that those who come after them are getting worse, while those who came before them are much better than they were when they were students. Are students really all that different â€Å"Now† than they were â€Å"Before†? It’s been said that with every batch, with every generation, students are slowly degrading, that you could count with your fingers, those student who truly excel nowadays. It is a very common proclamation that young people now are disrespectful, unmotivated and without problem solving ability. Most people say that â€Å"compared to when we were in high school† the students are very different, incompetent. This is a common perception today, from non teachers and teachers alike, but is this true? II. Context Of course, each generation is different; technology and culture change forces us to think and act differently, use different tools. The increase in population and politics also contribute to the differences between the students of the past and present. Advanced technology, computer and other gadgets like cell phones and scientific calculator enabled the students do their task quicker and easier, tools that help them to be more efficient. In the past students had to handwrite or use a typewriter for their reports, one mistake and you’ll have to repeat it. Now with computer, to matter how many mistake you make with your grammar and spelling the computer will detect your errors so you can make corrections before printing. With computers, you can edit reports or write additional data without doing it over again. Solving mathematical problem became easier too, with the use of calculators. Students in the past have to manually calculate before arriving with the answer, now with just pushing a few buttons, you’ll get the answer. One can find and download anything that is needed in the internet, without sifting through pages and volumes of books in the library. The printed books are almost phase-out as students now prefer ebooks they can read using their cell phones and tablets. There are various mode of transportation, to take students from one place to another faster. Even the method of teaching had change with technology; PowerPoint presentations are often used, and there are even subjects where students learn about information technology and computers. As a result students of the present tend to be lazy and arrogant, and most of the time the equipments technology brings are taken for granted, and are used for fun and games. Then, they have to go without these gadgets, so students then needed to be precise, not make errors. They learned to concentrate, to go slow but sure not to make mistakes. They are more organized and had more focus on whatever task they are doing. Our culture is constantly changing as we continue to grow, being influence by other culture and with the advancement of technology. We are becoming more materialistic, values and social norms changed brought by the influence we see on televisions or by surfing the internet. Because of these changes it is only natural to observe a difference on the behavior and attitudes of today’s students from students of yesteryears. In the past students are more respectful, industrious, punctual and obedient. Girls are demure and boys gallant; public display of affection is not allowed; teachers are more strict and can use corporal punishment on those who misbehave. The presentation of oneself is very important, having a suitable hairstyle and wearing the proper uniform or appropriate attire is rigidly observed. Today’s student think that they are superior to their teachers as they think they can learn everything they need to know from the internet; they are lacking in their attention span and tend to be irresponsible; having a weird hairstyle and adding unnecessary accessories to their uniform is perceived as being cool. Now it is almost a requirement to have the latest gadgets, fashionable clothes and a boyfriend/girlfriend to be accepted in a clique, to belong. The increase in population and politics also play a part in making a difference between the students today from students who came before them. Then, there are a lot less students and the teacher can pay closer attention to each of them. But with the increase of population more schools are being established especially for those places like in the rural area where the school is so far away a student has to travel several miles just to go to school. When the people in the administration of organization like DepEd and Ched, changes are bound to happen. In the past decade the curriculum is changed several times when the people in the administration changed, teachers and students alike adjust had to a new curriculum before they were used to the previous one. Politicians are also known for passing provisions that could affect the education system of our country; K to 12 is an example. III. Summary Students of the present largely differ from students in the past, from the way they think, act and with the tools that they use. Their motivation, organization and efficiency have also changed. Technology, culture change, increase in population and politics all contribute in making these differences. Technology provides the new tools and gadget that students enjoy today. When culture changes the social norms and values also change, in turn there would be an alteration in the behavior and attitudes of the students, our youth. The increase in population and politics create circumstances such as different education system and curriculum, where teachers and students alike have no choice but to make adjustments. IV. Conclusion Change is inevitable with the passage of time, changes that are caused by different things. Students and teacher alike have to adapt to these changes, it can make a task more efficient, it can make learning more exciting or it can become a distraction. The change affects the motivation and attitude of the students. It must be considered before a comparison is made that every batch, every generation have their own way, leave their own marks, it would be unfair to say that students today are becoming worse for they are only responding to the situations created by these changes.

European Modernist Artwork Essay Example | Topics and Well Written Essays - 250 words

European Modernist Artwork - Essay Example The largest tear is placed on the top of the artwork, with a small piece slightly below the larger piece. On the left there is also a small tear. The grain of wood is well utilized to create a balanced posture of the painting (Mundy, 2003; Masson, Alix & Museo Reina Sofà ­a, 2004). The lining is well done using a thin layer; thus, making it less exaggerated. The use of light and shading is also exemplary. A thin glossy polish covers the painting giving it a smooth texture (Mundy, 2003; AndreÃŒ  Masson, 2004). The author is of the intent to let out his feelings on the times after the First World War. The world was slowly coming back to order. Through his painting, he explains life and death, probably of the soldiers of war. There is a portion of the art that consists of a dead bird, a fruit and flowers. The dead bird would imply the death of the soldiers while the flowers and fruit explain the advent of new life (Mundy, 2003). The seeds on the other side explain the force of life. Just like after death there is birth, the painter aimed at explaining that regeneration is

World War ll Through the1970's Essay Example | Topics and Well Written Essays - 1250 words

World War ll Through the1970's - Essay Example These decades witnessed widespread economic and political changes, which shaped America’s gender dynamics and civil rights conditions. Though there are numerous major events during this time, this paper focuses on the dropping of the atomic bomb on Japan and Rosa Park’s refusal to give up her bus seat for a white man. This paper reviews several important historical landmarks and their effects on modern American society, economy, politics, and culture. It also explores America’s reluctance to join World War II, the role that women played to win World War II, changes in civil rights after World War II, the effect of the Vietnam War on the political awareness of American youth, and the impact of President Johnson’s â€Å"Great Society† program on modern times. These events demonstrated that World War II and other influential individuals helped promote social inequity, as well as economic and political development, in America.... Wars cost millions to billions of dollars, not counting the lives lost in the process, so Americans thought it best not to engage in a new war, as it dabs on its economic and psychological post-World War I wounds. World War II depicted the military and technological skills of the U.S., specifically after it dropped the atomic bombs on Hiroshima and Nagasaki, because it not only ended this war, but sealed the fate of the U.S. as the new superpower of the world. On August 6, 1945, the first atomic bomb was dropped on Hiroshima, and on August 9, another bomb was dropped on Nagasaki. On August 15, Japan surrendered to the Allies and signed the Instrument of Surrender on September 2, which officially ended World War II. The bombings resulted in post-war agreements that banned nuclear armament development. Scholars disagree on whether the atomic bombs truly forced Japan to hastily capitulate to the Allies, although the Office of the Historian (2012) and Freedman and Dockrill (2004) argued that these bombs shocked Japan into surrendering. The effects of the atomic bombing affected how Americans see nuclear weapons. For some Americans, the destruction of Japan through the atomic bombs sparked fear, not only against nuclear proliferation, but also against the media and the government, who have been increasingly charged of manipulating facts to support their political agenda (Jowett & O’Donnell, 2012, p.171). Despite the social pattern of distrust, it cannot be denied that World War II boosted the economy of the U.S. During the war, federal spending increased by $72 billion (Schug et al., 1993, p.192). Industries related to the war flourished, including steel, aluminum, copper, and rubber industries.

Tragic Dramas of Oedipus Rex and Antigone Essay

Tragic Dramas of Oedipus Rex and Antigone - Essay Example It was up to the playwrights to teach the people how to behave and the rules of society within the metropolis. While many of the plays were comedies, demonstrating the more ridiculous consequences that could be experienced if individuals did not abide by the established codes of conduct, others were dramas, revealing much more serious potentialities that could affect more than just the average citizen. As they were presented, these dramas demonstrated the degree to which the entire culture could be disrupted if someone in power chose to break the rules. Some of these dramas have survived into the modern day because they had such a profound effect on their audiences and told stories about mythological or legendary characters and events. Dramas such as Oedipus Rex and Antigone are good examples of this kind of tragic drama. To qualify as a tragic drama, Aristotle identified three main factors that were present in every tragic drama and which were essential to the plot development. Thes e factors were referred to as hamartia, anagnorisis and peripeteia. The term hamartia commonly refers the idea of a tragic flaw (Aristotle, 1282). It is the concept that a noble person will fail due to some inherent flawed portion of his character which causes him to engage in a specific behavior pattern or make an error in judgment rather than due to the manipulations of a vengeful god or as a result of violating the gods' laws. Although the audience might see it, even they are not necessarily supposed to recognize the hero's mistake or misbehavior at the time he commits it, but it will eventually become clear through the action of the play that without this mistake, the tragedy would not have happened. This eventual realization of the initial mistake on the part of the character is what is referred to as anagnorisis (Aristotle, 1283). In Aristotelian terms, this word essentially means recognition. In most cases, this realization occurs suddenly for the character in a kind of epiph any moment when the hero finally understands that they brought this fate on themselves. This epiphany can also shed light on the true nature of all the characters within the play, sometimes something much different than what was expected or assumed. The anagnorisis leads naturally into the third element, that of peripeteia. This term refers to a sudden reversal in action or position based upon logic and intellect (Aristotle, 1283). In tragic drama, it refers to the reversal of the character's fortunes - everything they had is lost. This reversal of fortunes flows naturally as a part of the story, but it usually takes the audience, and the character, by surprise. Although this idea can be traced as a part of the hero’s character, it was more typically used to refer to the external circumstances surrounding the event and the character. Understanding these key elements of a tragic drama helps modern day students characterize these plays simply by looking to see if they adhere to the concepts. In Oedipus the King, for example, the action opens as Oedipus addresses his people, who have come to him hoping he will cure their city of a plague. Rather than encourage them to pray to the gods, Oedipus ridicules them for their prayers and tells them they should have come to him first: â€Å"What means this reek of incense everywhere, / From others, and am hither come, myself, / I

The effect of Emotional Intelligence in Nursing performance and stress Essay

The effect of Emotional Intelligence in Nursing performance and stress levels - Essay Example During the last decade, researches have flourished to define, measure, and differentiate emotional intelligence from other types of intelligence, and examined its value and its relation with other variables, such as behaviors, characteristic, processes, and outcome. Emotional intelligence was also used in the field of psychology, education, business, leadership, and recently health care and nursing. In nursing, the emotional intelligence is a topic of keen interest in these few years (Quoidbach and Hansenne, 2009). Several claims are reported noting that emotional intelligence does not only play a significant role in nursing but also in other areas, such as, managing emotions, regulating relationships, facilitating decision making and communication, empowering leadership, and as a guide to success and perfection. In contrast, there are some critiques that condemn emotional intelligence for being vague, poorly defined, immeasurable, and over magnified (Smith et al., 2009). Aim of the Paper The aim of this paper is to critically review the literature of emotional intelligence and its effect on improving nursing performance at individual and team levels in addition to reducing stress, burnout and health complains. The possibility and the degree of enhancing emotional intelligence, and its applicability in real life will be discussed in this paper. The Emotional Intelligence concept has been born in literature by Salovey and Mayer in 1990, who defined it as an ability to inspect, perceive, manage and employ emotions of self and others in order to achieve success. As a result of this concept, Salovey and Mayer (1990) created a model known as The Ability Model. Although emotional intelligence became scientifically noticed within the academic field, it had only bore limited publicity during that time. Not until the publication of an emotional intelligence book by Goleman in 1995 when it gained its popularity. Goleman's emotional intelligence model called Mixed or Perf ormance Model, is the most popular model, which merges personality traits and emotional domains, and pay attention to performance outcomes. Several emotional intelligence models and tools have emerged thereafter; however, even though these models have used different wordings, the four common domains were still shared by most of these models. These domains include self-awareness, social awareness, self-management, and relationship management. The emotional intelligence tools from the aforementioned models varied according to its way of defining, understanding emotional intelligence and the model it’s derived from, but at the end, most of these tools have common purpose which is to measure emotional intelligence with different validity and reliability (Beauvais et al., 2010, Landa et al., 2007, Kooker et al., 2007, and Smith et al., 2009). Search Strategy To begin with, broad scope search was done via several databases and search engine, such as the Emerald, Wiley, Ovid, and Go ogle scholar, but most of the papers were found on Science direct. At first, the results were as many as 33,318 using emotional intelligence as the key word; nevertheless, the result starts to drop gradually from 10,678 to 79 papers after using more specific key words such as emotional intelligence and performance, emotional intelligence and team, emotional intelli