!. The Madoff Affair (20 Points) a. 1. Describe what happens in a Ponzi scheme. 2. Explain why Madoff's Ponzi scheme finally unraveled/failed after almost fifty years of success. Be specific regarding the events which led to Madoff's downfall! b. Why does a Ponzi scheme fit the definition from lecture of white collar crime? Be sure to explain what is meant by white collar crime. C. What was so unusual about the way Madoff sent confirmation tickets of trades to clients and which should have been a red flag (warning) to his clients? (Note: Sandra Manzke, the hedge fund manager interviewed in the video, was asked about this in the video). d. Discuss the reasons which the Securities and Exchange Commission used to justify why it did not pursue Madoff for fraud, even though there was ample evidence to do so, including the extensive information provided by Harry Markopolis. e. Define: 1. Feeder fund; 2. Due diligence; 3. Black Box;" 4. Front running !. The Madoff Affair (20 Points) a. 1. Describe what happens in a Ponzi scheme. 2. Explain why Madoff's Ponzi scheme finally unraveled/failed after almost fifty years of success. Be specific regarding the events which led to Madoff's downfall! b. Why does a Ponzi scheme fit the definition from lecture of white collar crime? Be sure to explain what is meant by white collar crime. C. What was so unusual about the way Madoff sent confirmation tickets of trades to clients and which should have been a red flag (warning) to his clients? (Note: Sandra Manzke, the hedge fund manager interviewed in the video, was asked about this in the video). d. Discuss the reasons which the Securities and Exchange Commission used to justify why it did not pursue Madoff for fraud, even though there was ample evidence to do so, including the extensive information provided by Harry Markopolis. e. Define: 1. Feeder fund; 2. Due diligence; 3. Black Box;" 4. Front running