The Madoff Affair

Financial Literacy Guide: Introduction to Investing


About the Film

The Madoff Affair unravels the story behind the world's first truly global Ponzi scheme. Who saw the warning signs? Why were they ignored for so long? Billions of dollars were channeled to Madoff’s investment firm, and his feeders became fabulously wealthy. The competition wondered how the man could produce such steady returns in good times and bad. There were allegations that Madoff was “front-running” or operating a Ponzi scheme, which the Securities and Exchange Commission (SEC) investigated several times over the last two decades. But Madoff remained untouched until Dec. 11, 2008, when he admitted it was all “one big lie.” Through exclusive television interviews with those closest to Madoff’s operation, veteran FRONTLINE correspondent Martin Smith unearths the details of a deception that lasted longer, reached wider and cut deeper than any other business scandal in history.


Watching the Film

Teachers can either assign the film for viewing as homework or show the film in class. Suggested discussion questions are provided. The lessons and activities in this guide are focused on excerpts from the film and can be viewed on DVD in class or online.


Note to Teachers

This guide is intended for classes in social studies, civics and government, economics, business studies, mathematics, current events and history; grade levels 9-12. The lesson on individual investing begins with an introductory budgeting activity that helps students understand the difficult choices people face with their money and the need to create savings in order to invest. The lesson includes two activities that are useful for students to begin to understand how to be able to analyze investments themselves and start to build diverse investment portfolios.


Discussion Questions:

This guide includes a list of questions for students to discuss after viewing The Madoff Affair.


Introductory Activity:

Students learn how to budget their money and save by practicing a “pay-yourself-first” approach


Featured Lesson Plan:

“Introduction to Investing”

Lesson Objectives:

Students will understand:

  • What is meant by diversifying a portfolio and asset allocation
  • How to look at financial information for characteristics that make for good investments
  • How to be confident in their own abilities rather than looking to “financial gurus” who might not have the investors’ best interests in mind


Purchasing the Film:

The Madoff Affair can be purchased from Shop PBS for Teachers. Also, teachers and students can watch the film streamed on FRONTLINE’s Web site,



This lesson was developed by Simone Bloom Nathan of Media Education Consultants, Inc. It was written by Kevin Murley of Montgomery Blair High School, Silver Spring, Md. Advisers were Debra Plafker Gutt of Stuyvesant High School, New York; Greg Timmons, curriculum writer and educational consultant; and Joshua Weiner of Benson Polytechnic High School, Portland, Ore.

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