1. Charles Ponzi was a working-class Italian immigrant eager to succeed in America. Bernard Madoff was already a multimillionaire before launching his project. Does that make one more unethical than the other? Why or why not? No, I don't believe that makes one more unethical than the other. Yes, Charles Ponzi was an opportunist trying to make his way in America while Madoff was a Wall Street financial player well aware of the risks he was taking. Charles Ponzi and Bernard Madoff both made unethical decisions, regardless of where their intention came from. Both men lied to their investors; stakeholders in their organization, in every sense of the word, because no real business operations were taking place. I believe they justified their unethical behavior with the belief “that the activity is safe because it will never be discovered or made public” (Ghillyer).2. Explain how a Ponzi scheme works. A Ponzi scheme is a type of investment fraud that offers high returns on initial investments, with payment received from new investors. The distributed profits come entirely from “new investors in the absence of any real profit-generating commercial operation” (Ghillyer). Essentially, a person is asked to invest in an opportunity that promises a high return on their initial investment. As new investments are sold to the same opportunity, the funds continue to grow. Most individuals decide to reinvest their profits because the return is very high. The industry doesn't collapse until the scam is discovered or too many investors decide to cash out and there is no money to pay. The SEC states: “In many Ponzi schemes, fraudsters focus on attracting new funds to make payments promised to investors up front to create the middle of paper……investments diversify to minimize risk . Works Cited Bandler, James. “How Bernie Did It.” CNNMargent. Cable News Network, April 30, 2009. Web. March 1, 2014. Ghillyer, Andrew. Business Ethics Now. New York, NY: McGraw-Hill, 2012. N. pag. Print.Moyer, Liz. “Why the SEC Missed Madoff.” Forbes. Forbes Magazine, December 17, 2008. Web. March 1, 2014. Nocera, Joe. “Victims of Madoff, get over yourselves.” Executive Suite Blogs. New York Times, June 29, 2009. Internet. February 22, 2014. “Ponzi Schemes.” “Ponzi” schemes. United States Securities and Exchange Commission, October 9, 2013.Web. March 2, 2014 Schaefer, Steve. “Four years after Madoff, a big lesson for investors.” Forbes. ForbesMagazine, December 28, 2012. Web. March 02, 2014.Turner, Russell B. and United States. Madoff Ponzi Scheme: SEC Failure and Why. New York: Nova Science Publishers, 2010. Electronic Book Collection (EBSCOhost). Internet. March 2.2014.