Bernard Madoff Ponzi Scheme
In 2009, billionaire Bernie Madoff exchanged his 7 million penthouse for a prison cell. He pleaded guilty of operating a 65 billion fraudulent Ponzi scheme for decades. Madoff promised investors steady returns of 10 to 12 percent on their investments, no matter how the market was faring – earning him thousands of loyal investors. However, Madoff never invested the money. He used new clients’ deposits to pay off older investors as well as to fund his family’s lavish lifestyle. Ponzi schemes work well until money stops rolling in, but they always collapse when new funds dry up. Madoff’s scam is unique in that it lasted nearly two decades.
Then the inevitable happened: new investors began dwindling. The situation quickly deteriorated with the worsening economic situation in late 2008. On December 11, 2009, Madoff admitted his guilt to his sons. The sons turned their father over to the authorities, but the damage was already catastrophic. Some investors, many of them retirees or charitable institutions, lost their entire investment.
Madoff’s scam resulted in the loss of 65 billion, 16,000 claims for losses, and even a lawsuit against the Securities & Exchange Commission (SEC). Many questioned why the SEC had not detected the scam despite numerous red flags. The organization had investigated Madoff many times over the years, but never uncovered any wrongdoing. As a result, some investors sued the SEC for negligence, the first time investors have sued a regulatory agency. No matter where the fault lies, officials agree that new safeguards will be necessary to prevent similar crimes in the future.
Questions
Why did Bernard Madoff engage in such purposeful misconduct?
How would you describe how a Ponzi scheme works?
How can an individual avoid being a victim of a Ponzi scheme?
Anheuser-Busch Markets Bud Light Cans to College Students
Aug. 28, 2009 abcnews.com
By XORJE OLIVARES
A new Anheuser-Busch marketing strategy is taking "This Bud's for you" to a whole new level.
Their new customized beer can colors mimic the school colors of 26 universities around the nation. The "Fan Cans" were released just in time for fall football season. Although they don't bear a school name or logo, many school administrators say Anheuser-Busch crossed the line.
"It's an intentional act on their part to find colors that are associated with a certain market, but that market from our perspective is underage drinkers," said Dr. Kevin Prince, health education coordinator for the University of Texas at Austin. "My concern is does this [campaign] promote responsible drinking?"
But the can controversy angering colleges across the country hasn't stopped students from stocking up. Maggie Ogden, a nutrition major and senior at UT-Austin, said she bought a 24-pack because the cans were orange, mimicking UT's school colors: burnt orange and white.
"I like that it advertises football season, which is exciting," Ogden, 21, said. "There really wasn't much thought-process to [my decision to buy them]."
On Monday one eager University of Florida fan Tweeted, "Where can I get a pack of Gator Bud Light Fan Cans?"
"I'm flattered the cans have our colors," said UT government major and senior Mack Shaffer. He sampled one of the fan cans, but doesn't plan to buy them in the future.
"I think a beer's a beer," Schaffer, 21, said. "I'm not going to be persuaded to buy one painted in my school's colors over one I really like [to drink]."
'It's Not the Most Responsible Thing to Do'
The Federal Trade Commission, a government agency that promotes consumer protection, has spoken to the brewer and voiced concerns about the campaign, which many fear is geared to fans under the legal drinking age of 21.
"Our concern about the campaign is that when you're talking about a college campus, you're talking about a population of many underage students, and you're adding to it a population of mostly binge drinkers," said Janet Evans, a senior attorney at the FTC. "It was not the most responsible thing to do."
According to the Centers for Disease Control, people under the age of 20 drink about 11 percent of all alcohol consumed in the U.S. Nearly 90 percent of the alcohol consumed by those under 20 is via binge drinking, which the CDC defines as drinking to the point where one's blood alcohol concentration is 0.08 percent or more.
The National Institute on Alcohol Abuse and Alcoholism reported that there were 1,825 alcohol-related deaths among college students in 2005, up from 1,440 in 1998. Also, in 2006, the Institute found that 28 percent of those under age 20 drank alcohol, with 19 percent engaging in binge drinking.
Carol Clark, Anheuser-Busch's vice president of corporate social responsibility, said in a written statement that the new color schemes are a way to connect to fans in a fun way, while still obeying the law by catering to those who are of legal drinking age.
"This is a voluntary program made available to all wholesalers nationwide, and roughly half of our wholesalers are participating," Clark said in the statement. "We offered a variety of color combinations to choose from and in some cases, wholesalers have ordered multiple color combinations."
Clark said Anheuser-Busch has invested around $750 million to help prevent alcohol abuse, especially among minors, and will continue to pursue such efforts.
Questions
Why does the NCAA seek to regulate advertising and sponsorships at collegiate sporting events?
What were the ethical objections raised by stakeholders regarding the Budweiser college campaign?