WorldCom and The Mississippi Scheme are both large financial scandals that have occurred. WorldCom was a telecommunication company that overstated their cash flow by reporting $7.6 billion in operating expenses as capital expenses. WorldCom is the largest accounting scandal in US history as of March 2002. The Mississippi Scheme was a business scheme that destroyed the economy of France during the 1700’s. The scheme involved the loss of paper money’s purchasing power as a result of asset inflation.
In hopes of rebuilding America, the capitalists’ hunger for wealth only widened the gap between the rich and poor. During the 1800’s, business leaders who built their affluence by stealing and bribing public officials to propose laws in their favor were known as “robber barons”. J.P. Morgan, a banker, financed the restructuring of railroads, insurance companies, and banks. In addition, Andrew Carnegie, the steel king, disliked monopolistic trusts. Nonetheless, ruthlessly destroying the businesses and lives of many people merely for personal profit; Carnegie attained a level of dominance and wealth never before seen in American history, but was only able to obtain this through acts that were dishonest and oftentimes, illicit.
. Why did Lehman Brothers go bankrupt? The giant investment bank succumbed to the sub-prime mortgage crisis that has rocked the United States and the global economy. Lehman was strangled by a massive credit crisis and fast plummeting real estate prices. The gargantuan $60 billion loss in bad real estate loans forced the bank to file for bankruptcy.
He saw an industry plagued from overproduction and his own success was being threatened by... ... middle of paper ... ...ush you and your children and your children's children" (Raymond 198)! Already strained by the demands of making money, Rockefeller now staggered under the new pressures of giving it away. "I investigated and worked myself almost to a nervous breakdown," he said, "in groping my way through the ever-widening field of philanthropic endeavor" (Raymond 199). John D. Rockefeller created an industrial empire, and a personal fortune on a scale that the world had never known. He ruthlessly crushed his competitor s in the process, alienating the public and leaving a stain on the family name.
Introduction The Houston based commodities, energy and service corporation Enron was involved in one of the biggest fraud cases in the United States of America. Underlying the fraud was the deception of reports and statements that gave a very inaccurate and misleading view about the company. The Organisation, Time and Place Enron Initiated as an interstate pipeline company through the merger of Houston Natural Gas and Omaha-based InterNorth in 1985. (The rise and fall of Enron: a brief history, 2006) With this merge the previous CEO of Houston Natural Gas, Kenneth Lay, advanced and became the new CEO of Enron. He was very quick to rebrand Enron into an energy trader and supplier.
The Impact of a threat of a credit default. The financial crisis 0f 2007-2008 is widely considered to be the worst financial crisis since the great depression. The effects of the financial crisis were cataclysmic it resulted in companies going under, others getting bailed out by the government and the stock market taking a nose-dive which led to a domino effect of recessions and bail outs around the world. The warrant for the financial crisis of 2007 was motivated by the subprime mortgage crisis. There was an increase in subprime lending which started in the early 1990’s and by 2007 all these loans totaled 1.3 trillion dollars which accounted for 20 to 25 percent of the u.s. .Housing market.
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
Hopefully, this will be the last scandal where a few greedy company executives plan to steal money from those who run their business (Lindstrom, 2004). Works Cited Lindstrom, Diane. "Enron Scandal." Microsoft Encarta Online Encyclopedia (2004): 29 pars. 9 Dec 2004 .
A bankruptcy for Tyco International would mean that 240,000 employees would be out of work, which would have sent shockwaves through the economy (Kay, 2002). Acquisitions and financial manipulations lead to huge profits for Tyco over a long period of time. Tyco faced bankruptcy because of failed tricks by its accounting department and fraudulent activity by the company’s leaders. Kozlowski was accused of applying millions of dollars to his personal life. His greed and misguidance cost the company billions of dollars, him his freed... ... middle of paper ... ...ategic, tactical, operational, and contingency planning.
Analyse the corporate culture at Enron, Arthur Andersen and Lehman Brothers and discuss any similarities / differences, and the link between corporate culture, greed and fraud. Provide specific examples to justify your answer. In essence, for the three companies considered, as a corporate culture…”Greed is good”. The original virtues of Enron, Arthur Andersen and Lehman Brothers were all, over time, replaced by those three simple words…”Greed is Good”, and the damage that motto caused on Wall Street and across the globe was, is, and will probably be again, phenomenal. Deregulation of the financial services industry provided the key to unlocking the gates to a corrupt corporate world filled with greed and disastrous levels of fraud.