5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading accounts with BLMIS for the ostensible purpose of buying and selling securities. No securities were purchased, and instead, BLMIS used the money invested by BLMIS tomers to make distributions to other BLMIS customers. After Madoff's arrest, the court appointed a trustee who was assigned the task of recovering funds transferred to investors who were aware of the fraud at the time they received the transfer. One investor, called S & R, argues that it is not required to return any funds because it received them without knowledge of the fraud. However, Stanley Shapiro, who was S & R agent when the fraud occurred, did know of the fraudulent scheme. The account statements for S & R were sent to the Shapiro's home address, Stanley reviewed those statements, and he directed BLMIS to execute fabricated trades for S & R for the purpose of increasing their market value or decreasing the owners' tax liability. May Shapiro's knowledge be imputed to S & R? Explain. 5 Bernard L. Madoff, through BLMIS, operated a Ponzi scheme inducing investors to open discretionary trading accounts with BLMIS for the ostensible purpose of buying and selling securities. No securities were purchased, and instead, BLMIS used the money invested by BLMIS tomers to make distributions to other BLMIS customers. After Madoff's arrest, the court appointed a trustee who was assigned the task of recovering funds transferred to investors who were aware of the fraud at the time they received the transfer. One investor, called S & R, argues that it is not required to return any funds because it received them without knowledge of the fraud. However, Stanley Shapiro, who was S & R agent when the fraud occurred, did know of the fraudulent scheme. The account statements for S & R were sent to the Shapiro's home address, Stanley reviewed those statements, and he directed BLMIS to execute fabricated trades for S & R for the purpose of increasing their market value or decreasing the owners' tax liability. May Shapiro's knowledge be imputed to S & R? Explain.
Expert Answer:
Answer rating: 100% (QA)
Yes Shapiros knowledge of the fraudulent scheme can likely be imputed to SR in this case Heres why A... View the full answer
Related Book For
Business Ethics Ethical Decision Making and Cases
ISBN: 978-1305500846
11th Edition
Authors: O. C. Ferrell
Posted Date:
Students also viewed these law questions
-
5.DHCP: 10.40.111.0/24 is a subnet that uses DHCP to assign IP addresses. The switch is configured with portsecurity enabled. Be sure to state pertinent details about the packet, such as the source...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Q1. You have identified a market opportunity for home media players that would cater for older members of the population. Many older people have difficulty in understanding the operating principles...
-
In the proposal, the contractor estimated that 50 units of a specialty part are required. Each unit costs $300. There is a minimum buy requirement of 100 units. You contact the vendor and confirm the...
-
Which projection of (cos t, cos2t, sin t) is a circle?
-
To what extent is the search for relevance of financial information hampered by the need for reliability?
-
Determine which of the following are perfect squares. 1. 36 2. 27 3. \(\frac{9}{49}\) 4. \(\frac{12}{221}\)
-
Diane Corporation is preparing its 2012 balance sheet. The company records show the following selected amounts at the end of the accounting period, December 31, 2012: Total assets ...............
-
CASE REPORT CASE: "Merrill Lynch" Student Name: Nafisa Sultana Class/Section: FINA 475 For each question, first fill in the table with the required data, and then provide an analysis. Enter a...
-
. 6. * 5 points On January 1, 2009. Hallo Corporation purchased for P152,000, equipment having a useful life of ten years and an estimated salvage value of P8,000. Hallo has recorded monthly...
-
Sigismund has a 4 % ten - year $ 7 5 0 , 0 0 0 bond outstanding that has a current discount of $ 1 1 6 , 4 1 2 . The market rate of interest when the bond was issued was 6 % . Record the journal...
-
Teslla Corporation purchased land by signing a note with the seller requiring $15,000 immediately and $42,000 three years after the purchase. The note is noninterest-bearing, but the interest rate...
-
Suppose that a professor of labor economics finds that one of their research subjects has earned significantly higher wages throughout their lifetime than would be predicted by standard measured...
-
Moncrief Corporation bases its budgets on machine-hours. The company's static planning budget for July appears below: Budgeted number of machine-hours Supplies (@$8.60 per machine-hour) Power (@...
-
Sub - Saharan Africa is a region on the move. Population is increasing, cities are growing, infrastructure is developing, trade is expanding, and democratic governments are starting to emerge....
-
What are potential concerns that employees might have about an affiliation? How will you handle workforce issues, including the retention of executives, managers, and employees? How will motivation...
-
What impact has the Internet had on the globalization of small firms? How do you think small companies will use the Internet for business in the future?
-
1. Are information-gathering techniques like Rajaratnams common on Wall Street? If so, what could regulators, investors, and executives do to reduce the practice? 2. What are the implications of...
-
Compare and contrast the leadership characteristics of Stan and David.
-
Assume there is a news story questioning the sustainability of Smiths Sodas packaging. How should Keisha respond?
-
Draw up a consolidated balance sheet as at 31 December 2007 from the following: At the balance sheet date, Child owes Parent 3,200. During the year Parent sold goods which had cost 6,000 to Child for...
-
You are to draw up a consolidated balance sheet as at 31 December 2005 from the following: At the balance sheet date, Son 1 owed Pa and Mum 2,500 and Son 2 1,100, and Pa and Mum owed Son 2 2,100. Pa...
-
You are presented with the following information from the Seneley group of companies for the year to 30 September 2006: Additional information: (a) The authorised, issued and fully paid share capital...
Study smarter with the SolutionInn App