(Long, 2009) Unfortunately, for many investors, the conviction is not an adequate compensation for the amount of wealth they lost.
Seen in this context, the enactment of the Sarbanes-Oxley Act in the year 2002 was long overdue.
The act attempts to tighten accounting and audit procedures by making business corporations in America comply with higher standards of accountability.
Studied in retrospect, the Madoff scandal could have been thwarted at an initial stage if the firm had complied with the regulations mandated by the Sarbanes-Oxley Act.
The trouble started when this vicious spiral of new infusions and redemptions went out of control.
The savings and retirement pensions of many investors were lost in this artificial investment scam, reiterating the fact that regulatory overhauls such as Sarbanes-Oxley are highly relevant to the prevention of such scandals in the future.
It is a matter of speculation if the Madoff scandal could have been prevented had Sarbanes-Oxley been implemented earlier than 2002.
But there is no doubting the fact that the accounting misrepresentations carried out by Bernard Madoff and his cohorts were in breach of Sarbanes-Oxley regulations, both in letter and in spirit.
The investment scandal perpetrated by Bernard Madoff is the largest financial fraud in the history of capitalism.
It is believed that Madoff’s secretive investment advice firm caused a loss of nearly billions for the 4,000 odd investors who trusted his firm with their wealth.