The Sunbeam Corporation’s former CEO, Al “Chainsaw” Dunlap was a turnaround specialist and professional downsizer. Dunlap did not believe that corporations owed loyalty to their community or to their employees. His prospective was that the appropriate corporate concern was for their stockholders and that the primary goal of any business should be to make money for its shareholders. (Byme, 1998), Before his employment as CEO of Sunbeam, he had achieved notable success with Scott Paper and Crown Zellerbach. His methods were ruthless even by American Corporate standards. Dunlap’s goal was to show the maximum possible profits. In order to achieve his goals he made widespread cuts, laid off thousands of employees, and closed plants and factories. …show more content…
The basic allegations in this class action suit was that the shareholders were misled as to the value of Sunbeam’s stock in violation of the Securities and Exchange act of 1934. Because the financial statements misrepresented and omitted information regarding he business operations, sales, and sales trends the shareholders ultimately suffered financial loss as a result. As CEO of Sunbeam, Dunlap was charged with utilizing earnings manipulation to achieve fraudulent financial goals. Legal actions against Dunlap did not stop at the shareholders action in the civil courts, the Securities and Exchange Commission brought charges against Dunlap, Russell Kersh, Robert Gluck, Donald R. Uzzi and Lee B. Griffith, all former officers of Sunbeam Corporation in May 2001. (CNN Money Staff, 2001). The SEC allegations included that Dunlap had engineered a massive accounting fraud with the cooperation and in collaboration with the four other former Sunbeam executives and the Sunbeam’s lead partner with Arthur Andersen …show more content…
The SEC determined that Sunbeam filed quarterly and annual reports that had false financial statements and failed to make required disclosure. Subsequently the SEC findings went on to state “Sunbeam's books and records were manifestly inaccurate on so many items and over such an extended period of time as to indicate complete failure of internal controls in violation of Sections 13(b)(2)(A) and 13(b)(2)(B).” (U.S. Securities and Exchange Commission,
By deliberately falsification of their financial statements, by Martin Grass, Brown and Bergonzi. Among other things like:
This case is based on Mrs. Jennifer Sharkey, who sued J.P. Morgan & Co. (JCMC), Mr. Kenny, Mr. Green, and Mrs. Lassiter, alleging breach of contract and violations of the SOX anti-retaliation statute. The facts started when Mrs. Sharkey was assigned to a Suspect Client 's account where members of JPMC expressed to her their concern regarding to this account because they suspected that the Suspect Client was involved in illegal activities. After Mrs. Sharkey’s investigation, she claimed that she informed her conclusions to superiors Mr. Kenny, Mr. Green, and Mrs. Lassiter, of the Suspect Client 's potential unlawful activities, such as: money laundering, mail fraud, bank engaged in fraud, and violations of federal securities laws. After
Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused his relationship of trust and confidence and misappropriated material, non-public information he obtained from a fellow WPO member about the pending merger. It was the specific written policy of the WPO that matters of a confidential nature were to be kept confidential (Securities and Exchange Commission). Mr. Begelman maintained a relationship with a fellow WPO member, an insider with BFC Financial, who provided access to non-public information regarding the merger. Mr. Begelman used this information to purchase 25,000 shares of Bluegreen stock prior to the announcement of the acquisition. After the merger was made official and disclosed to the street, Mr. Begelman sold his stake for a net gain of $14,949. He maintained ownership of Bluegreen securities for fifteen days (Gehrke-White).
Good to Great by Jim Collins is a book which illustrates an answer for the question whether a good company can turn into a great company. In this book, Jim Collins suggests the ways by which companies can outperform the market leaders. The author has certain list of companies like Abbot lab, Circuit city, Fannie Mae,Gillette,Kimberly Clarak,Kroger,Nucor steel, Philip Morris,Pitney Bowes,Walgreens and Wells Fargo. According to author good is the enemy of great and thatis why have little companies which are great. The author says that the transformation from good to great does no just happen. It needs to be built through process which with three broad stages. Jim Collins suggest some components in a company to have it achieve great levels
The achievement of individual firms in comparable businesses shifts extraordinarily. Two components seem, by all accounts, to be fundamental to clarifications of such firm-level contrasts in execution, initiative and procedure. Much can be found out about authority and methodology by mulling over rich case samples of achievement and disappointment. This article profiles one such sample, the T. Eaton Company of Canada. Eaton's was established in 1869 and rose to conspicuousness as Canada's most noteworthy retailer. Exactly after 130 years, Eaton's was diminished to bankruptcy leaving Canada deprived of an iconic symbol. The lessons in administration and methodology that added to Eaton's staggering early achievement and consequent end are plot.
Buffet’s essay primarily discusses the declines his textile company had over the years due to lack of demand and how it eventually had to be closed down because of a drop in profits. He first supports his claim that lack of demand will cause failure when he argues that even when his company had well qualified and successful employees in management, it still was not enough to be successful in terms of economic revenue. He states, “When an industry’s underlying economics are crumbling, talented management may slow the rate of decline. Eventually, though, eroding fundamentals will overwhelm managerial brilliance” (56). Buffet argues that good management won’t save a company from going under, it can only slow the process of decline in that compan...
Bain & Company, Home Depot and Best Buy achieved success by using a few of Schwartz’s Ten values. Achievement is the first value, taking advantage of other companies cutting their workforce; they are able to hire talented individuals. Stimulation is another value, Home Depot had to close a couple of stores and laid off a portion of his upper management team, but offered bonus’ to employees at the lowest level of the workforce which entices the employees to engage customers and sell product. Benevolence was also a value, keeping an honest approach to the recession; instead of avoiding the subject of lay-offs discuss the reason why they happen, be a transparent company so that employees feel part of the decision (Kreitner & Kinicki, 2013, P153). Communicating the decisions made will help quell the uncertainty.
When the 1980’s rolled around, it was a thriving company, in the Seattle area. However, the co-founders began to have other interests and were involved in other careers simultaneously. Despite that, the company was about to undergo a major turnaround. A man by the name of Howard Schultz started to pursue an interest in the company. He noticed that the coffee shop had a wonderful environment.
Most of Scrushy’s alleged misconduct occurred prior to the enactment of Sarbanes-Oxley (SOX). To sum...
Jim Collins and his research team have done a wonderful job identifying what it takes for a company to go from good to great. I found this book to be extremely interesting and would like to share several of my thoughts.
CEO Kenneth Lay’s ambition for ENRON a company he had helped form went beyond the business of piping gas. Enron went to become the largest natural gas merchant in North America and the United Kingdom. But the reality is, this company business model never worked. This was a company that was so desperate to win Wall Street 's respect that it kept it stocks shares prices going up despite the losses it was incurring in order for executives to keep lining their own pockets. Over the course of this Case Assignment, I will identify the examples of financial reporting misconduct, I will explain the deontological as well as a utilitarian ethical perspective and lastly I will identify the stakeholders likely to be affected by that misconduct.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
...the agents to be the gatekeepers for keeping the corporation alive. While some of Dr. Friedman’s opinions came across bold and harsh, ultimately I feel that he presents a strong case for developing a profit-motivated company that does not treat its stockholders inappropriately.
"The Ray Kroc Story: How his plan for McDonald’s transformed an industry." Inside Business 360. Kate Flexx, n.d. Web. 24 Mar. 2014. .
There are many lessons a business owner can learn from the Andersen/Enron scandal, the only lesson would not be that honesty is the best policy, but also that a dishonest action made by a few people can affect many. Enron’s insider trading and failure to report accurate earnings and losses paired with Andersen’s failure to properly audit and report the company’s debts and earnings made for one of the biggest scandals that the business world has ever seen. Enron used SPE’s or Special Purpose Entities to mask the large amounts of debt that they had acquired overtime