The Madoff Scandal, Market Regulatory Failure, and the Business Education of Lawyers

Abstract

This essay suggests that a deficiency in legal education is a contributing cause of the regulatory failure. The most scandalous malfeasance of this new era, the Madoff Ponzi scheme, evinces the failure of improperly trained lawyers and regulators. It also calls into question whether the prevailing regulatory philosophy of disclosure of disclosure is sufficient in a complex market. This essay answers an important question underlying these considerations: What can legal education do to better train business lawyers and regulators for a market that is becoming more complex‘ One answer, it suggests, is a simple one: law schools should teach a little more business and a little less law.

Keywords: Madoff, SEC, financial crisis, markopolos, legal education, law school education

JEL Classification: A2, A23, A29, K2, K22, K29