As he owns most of the company's shares he is also the one most interested in the well-being of Krane Chemicals and hires a company called judicial vision to buy a seat in the court deciding on the case. When a chemical company called Krane Chemicals poisons the ground water with chemical toxic waste hundreds of people die of cancer or get seriously ill. When Mary Grace and Wes Payton win the case the against the company, the shares drop dramatically. Carl Trudeau, who owns an impressive amount of shares looses over one billion dollars in one day, an... ... middle of paper ... ...int of the book. As the book comes to the final moments and everything seems clear and predictable Grisham manages to twist the book suddenly.
“Fraud is the daughter of greed” said British novelist, Jonathan Gash. In the documentary, "Bigger Than Enron," Hedrick Smith discusses how regulatory agencies such as accountants, banks, lawyers, auditors and politicians didn’t try to save such a huge and high-powered corporation as Enron and other companies. Enron was one of America’s largest corporations which was producing electricity, national gas and employed 20,000 people who weren’t aware of what the executives and accountants were doing. Enron’s collapse occurred due to the fault of its executives who used their power in a wrong direction. They used information for their own gain and deluded their employees.
In the end Investors lost over fifty billion dollars and Bernie Madoff ended up in jail with a life sentence. It all began in 1959 when twenty two year old Bernie Madoff registered Bernard L. Madoff Investment Securities as a Brokerage Firm for only $200. He began getting clients through his father-in-law Alpern. The SEC allowed for Investment advisors to have up fifteen clients before requiring a Investment Advisors License that would include many fees and examinations. Bernie Madoff Decided against getting the license and began his life of illegal investing.
In the work place today records show a study of unethical behaviors taking place in the area of professional organizations. This has been a growing problem among a different variety of businesses and corporations. The problem with these issues being brought to the public is that it brings a negative outlook on the company as a whole. The words “crook” and “fraud” have been slanted towards some of our countries fortune five hundred companies and most respected business partners in the market. There are many reasons as to why these fraudulent acts are now relevant to the Medias eye, but none of them are helping these businesses reputation of leadership within corporations.
This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees. On March 15, 2005 Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. In July 2002, an internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. A second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings an understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3).
WorldCom has filed for Chapter 11 bankruptcy in 2002. Health South (Lupica, 2014), one of the biggest healthcare provider, committed fraud by increasing the value of their earnings on papers and increasing the values of their stock prices. Many investors were fooled by the company’s accounting figures. Health south used to fill the gap of actual figures and target figures by making false entries in their accounts. After this fraud got exposed, many high level executive were sent to jail who spent their precious years cleaning
The crash has started; everyone began selling because the earnign ratio was so high, but no one was buying. The more that was sold, the less the value, and bankers had to buy the stocks as they fell to try and slow them down before they hit rock bottom. The root cause of this was Dow Jones Industrial, one of the leading companies to invest in at the time. Because of their fall, many Americans lost money, everyone was trading. The market sold 12.9 million shares lost $5 billion dollars, and this was all over the course of one day.
But when banks started to crash that is when people started to panic and was trying to get their money back, millions of Americans lost fortunes. This caused companies to lose their values and no longer be able to afford to stay in business. William C. Durant joined the Rockefeller family and other financial giants to buy big stocks to prove to the people their assurance in the market but they failed to stop decline in prices. According to the website Globalyceum, US gross domestic product, in 1929 $103.6 billion, in 1930 $91.2, in 1931 $76.5, in 1932 $58.7, in 1933 $56.4. The total size of the American economy, restrained by gross local product, suddenly dropped following the crash on Wall Street from $103.6 billion to $66
Kenneth Lay was the CEO of Enron at that point, and he hired Jeffery Skilling, who dealt with asset and liability management, as a consultant to co... ... middle of paper ... ...of the largest accounting firms in America, in charge of auditing Enron then became involved, and destroyed any of Enron’s documents that could prove that they were breaking the law. Consequences and Conclusion In the end, Enron could not keep itself afloat once it turned to fraud. Shareholders lost $74 billion, thousands of employees and investors lost their retirement accounts, and many employees lost their jobs. Lives were ruined. Lay died before serving time.
An excellent example of this is Enron and WorldCom, in these scenarios many of the company directors shirked their responsibilities and functioned as captives of senior management, failed to exercise independent judgment and oversee the actions of senior executives as it relates to audit control. The second underlying cause is auditors to discover fraud. Highly respected accounting firms were implicated in the highly publicized scandals of Enron and WorldCom. These firms certified statements for these companies that later turned out to be misleading and fraudulent. This failure to detect the manipulation of financial records, and to at least conduct an independent inquiry for accuracy, was a prime indication that auditors relied fatefully on inaccurate assumptions of senior management.