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Recommended: Enron Scandal (Case
In the case of Adelphia, the individuals found guilty in this case neglected their duties as managers and their duties to the SHAREHOLDERS. With the positions as Chairman of the board of directors, President, and Vice President, they all had "fiduciary duties to both the corporation and its shareholders" Beatty & Samuelson (2016). The SEC's suit against them for multiple frauds on different counts, did not protect them from the BUSINESS JUDGEMENT RULE based on the fact that they weren't acting in good faith by putting the company in debt and manipulating statements to conceal the
September 29, 2017 Officer Beckman, Supervisor Manley County Probation Department 555 Chestnut Lane Bouldercreek, GA 28394 Dear Officer Beckman: When it comes to life outcomes for any given person, there are unlimited people, circumstances, and personal choices that can affect a person and the life that they may lead for themselves. When trying to understand the details that produce any final result, the truth of the matter can be messy, complicated, and sometimes unclear. In most cases, there is not any one thing that caused a downward spiral or an upward shot, but rather a sequence of events, a plethora of circumstances, and a wide variety of people.
From what this case turns out to be, as determined by the facts surrounding it, if our organization was set up such that our supervisors have the power to fire employees under their supervision, the company could have potentially found its entangled in a Sarbanes-Oxley lawsuit. There is no doubt that had this morally upright secretary been fired for standing her ground in the face of our rogue supervisor 's demand for her to cook the books the company could have been in violation not only for attempting to file a fraudulent expense account but for taking retaliatory action against her for refusing to do such. On the other hand had the secretary connived with her boss, the supervisor and prepared the false expense report, the company 's reputation could have again been in violation of the Sarbanes-Oxley Act. A federal law that prohibits publicly traded companies such as ours, in engaging in fraudulence accounting and financial practices. Such a scenario could have ruined the corporation 's reputation and expose it to an enormous fine from the Federal Trade Commission.
In the case of Dale Emerson and Ernest Wallace I believe that Wallace was ethically in the wrong. As common small talk with family, Emerson was talking of a planned takeover of Dakota Gasworks, Inc. to his uncle on a weekend fishing trip. Unfortunately, Emerson’s uncle took the inside information from his nephew and used it to his advantage to gain large profits. As chief financial officer for Reliant Electric Co., under the SEC Rule 10b-5 act, “which prohibits the commission of fraud in connection with the purchase or sale of a security,” (Miller, 2014, pg. 618) both Emerson and Wallace could potentially be liable for the actions.
Before the Sarbane-Oxley Act of 2002 came into effect in the American economy, most investors and shareholders were left in the dark – most often at the mercy of big corporations whose accounting practices were largely unregulated. The act was a response to the infamous scandal of Enron, WorldCom, Tyco, and Adelphia – all of whom had unethical business practices that caused their shareholders to lose the astronomical amount of investment when their scandals made headlines. The Sarbane-Oxley Act (SOX) requires a business to implement a code of ethics for its employees, especially senior financial officers; it also requires a business rotate its financial auditors on a regular basis. (Orin, 2008) The implementation of a code of ethics aims to
This law against inside trading formalized the ethical expectation of a fair stock exchange where investors have equal access to information and as a result any loss or gain is not because of manipulation. Waskal and subsequent Stewart were guilty of a white collar crime because her economic offense was done with deception. In addition Merrill Lynch employees, Faneuil and Bacanovic, violated their code of conduct which states that the company protects the confidentiality and security of client information, which includes
Andrew Carnegie was one of the most famous and wealthiest American industrialist during the Industrial Age. He was a robber baron who made a fortune in the steel industry and applied vertical integration to his business. Carnegie contradicted his views as a robber baron because he supported, but destroyed many unions. This made many of his views unethical.
o In 1998, the SEC filed a case against Dunlap, other Sunbeam executives involved in the fraud, and the Arthur Anderson Auditing Firm. o In 1998, Dunlap was fired and barred from work for other publically traded companies.
Of the six WorldCom employees convicted in the case, I believe CFO Scott Sullivan was the most responsible for the fraud. Mr. Sullivan was the Chief Financial Officer of WorldCom. He was the one attempting to intimidate Cynthia Cooper, WorldCom Vice President of Internal Audit, by threating to hold all promotions in internal audit department. He was also the one that became aggressive and hostile while reprimanding Ms. Cooper for discussing the findings of her audit with Arthur Andersen. He was the one that attempted to provide written justification for the fraudulent journal entries before the audit committee.
Enron being the company that became an energy superpower only to fail due to faked financial
However, many corporate psychopaths have surfaced in the last few decades through various scandals, such as the Watergate scandal; the bankruptcy of Enron, which resulted in the loss of 60 billion dollars from investors and 4,500 jobs; and numerous scandals involving Attorney General Eric Holder, including concealing acts of terrorism, threats to freedoms of speech and press, and trafficking weapons. Boddy (2005, 2011) found that the presence of corporate psychopaths was highly correlated with instances of bullying, coercion, dangerous work conditions, and human rights violations, which hindered productivity and job performance. Pardue et al. (2013) referred to these crimes, as well as other crimes frequently committed by corporate psychopaths (e.g. fraud, embezzlement, forgery, and tax evasion) as invisible crimes because they are often committed in private settings and are typically motivated by financial gain. As portrayed in the examples above, corporate psychopathy is a growing problem negatively affecting the workplace and the
“Enron was a pioneer; they were risk takers and treated their employees like entrepreneurs. Think big; take chances, go where no one has gone before. Unfortunately, it now looks like Enron’s profit was as volatile as the natural gas they traded” (DeLongs, 2002). This dilemma was gradual and was years in the making. The simplest summary of the dilemma was that Enron was pushing a culture of promoting rule-bending and legal loopholes to continue their economic growth and success.
Kenneth Lay, Mr. Jeffrey Skilling and the company CFO, Mr. Andrew Fastow .The management level of Enron Corporation had misconduct the code of ethics and fail to performing the duties of a corporation which is telling the truth of the situation of a corporation .Instead , they tried try to hide the truth of their financial status and create a false prosperity situation and make the public believe on them in order to support their shares prices . The misconduct of code of ethics by the management level by Enron corporation has led to the another question – The ultimate responsibility of a corporation towards society ? The ultimate responsibility of a corporation is to gain profit or become a stable economic unit ?
The false accounting records were unethical because it means management was enriching themselves. They were getting earnings based on the false availability of funds. They also did this to keep their jobs. When a company is not performing financially well the top positions are the ones usually at risk of being retrenched, as a result of implying the company was financially stable they were protecting their jobs. False accounting also results in duping investors that trust the financial records of the company.
However, the judge decided that he worked for the company for 30 years and many executives should have known of his actions. In the end, he was sentenced to jail, even though he helped expose the company even further. It still backed fired and