GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND INTERNAL

CONTROL

LUCERO, Janica M. Atty. Johnson A.H. Ong, CPA, MBA

Section 3 July 18, 2020

THE WIZARD OF LIES

The Wizard of Lies is a movie based on a true story which was released in the year
2017. The movie revolves around the life of Bernard Madoff, who was known as a great
American stockbroker and investment adviser. Also, he became known as the man who was
behind the biggest financial fraud in the history of United States. The movie also showed how
his actions ruined the lives of people who were involved, not only his victims, but also his
family, especially his sons.

Bernard Madoff, who was the former non-executive chief of NASDAQ and the
founder of Bernard L. Madoff Investment Securities LLC which he started at the age of 22.
His firm became one of the top market maker business on Wall Street as there were a lot of
clients or investors coming to him. Little did they know, his firm was full of lies, deception,
and fraud. He was manipulating the investments of his company using Ponzi Scheme. He
took his clients’ assets or money to transferred it to his own personal accounts and used the
money he acquired from his recent investors to pay out redemption. No one knew in his
family about the schemes he was doing, not even his sons who also works for the firm. On
December 2008, Bernard Madoff confessed to his brother and sons that his business was full
of frauds and just one big Ponzi Scheme. On December 11, 2008, Bernard was arrested when
his sons turned him after telling them the truth behind his business. He was found guilty and
received a penalty of 150 years in prison.

As his crimes were revealed in public, his wife and sons who were also victims of him
and were not aware of his wrongdoings also received hatred and mistreatment from other
people. His two sons were also remained under investigation and accused of being an
accomplice of their father. After two years of getting arrested, his oldest son, Mark had
committed suicide and his younger son, Andrew was battling against mantle cell lymphoma.
In the year 2014, Andrew died because of his illness.

This movie shows the importance of corporate governance, business ethics, risk
management or internal control in a business. Having a poor corporate governance can lead
to a culture of greed among the top executives and managers of a company. Just like what
happened to Bernard Madoff, he became too greedy and obsess with having earnings and
based his success with those earnings which was why he committed such frauds and schemes.
Also, business ethics are important to a business since the organizational principles, values,
and norms will serve as the guide of people within the organization of their actions or
behaviour. Having integrity and honesty as an employee or employer will make the business
successful regardless of their earnings. It is better to have slow progress towards your goals
while showing integrity and honest than to be successful because of doing illegal and
unethical acts. Lastly, a business would surely grow and succeed if risk management and
internal control were practiced efficiently as it would avoid and protect the business from
having problems in the future. A business could survive and live longer if there are no frauds
or deceptions happening inside the company.