Richard Breeden focused heavily on the role governance played in the downfall of WorldCom and his report details several central objectives that he hoped to achieve with his proposal. His initial objective was to change the way the executives were compensated to better protect the shareholders’ interest. He tries to accomplish this by limiting equity share, capping CEO compensation, and limiting severance pay. The fraud that WorldCom engaged in could be traced to the executives, but was ultimately the result of improper board governance. Because of this, Breeden wanted to redesign the board and how it was structured, along with major changes to the Auditing, Governance, and Compensation committees. His objective was to limit the time directors could serve on a board, to make sure that the board was truly independent by splitting the Chair and CEO positions, and to require that all board …show more content…
He lobbied for the creation of a digital “town meeting” space where shareholders can post important issues to be discussed and ultimately voted upon. Breeden’s final objective, albeit an incidental one, was for his report to serve as a de facto guide to other corporations as to the proper elements needed to ensure good corporate governance. He thought that even if a company gleaned a few insights from his report, it would aid them in establishing good governance practices. In my opinion, this was the most important objective that needed to be achieved. Breeden knew there was a lot of attention on how he, and the SEC, were going to handle WorldCom’s situation. The company may have ultimately been doomed to collapse after this fraud surface, but maybe Breeden knew that this increased attention might allow him to bring a message of good corporate governance to other companies and possible keep this from happening
As what it came to be as one of the notorious case of fraud in the mid-1980s; the electronic store well known as (Crazy Eddie), its owner Eddie Antar and CFO Sam Antar committed every possible act fraud there is. Just to mention two of which they perpetrated; tax evasion and securities fraud. Basically, the tax evasion was committed for many years, it was not until the company became public in 1984 that their wrong doing near its end. Once Crazy Eddie went public, a new set of rules took place, such as compliance with the Securities Exchange Commission and the scrutiny of its investors. Soon, they both realized that their long committed fraud was nearing its end, when an external audit found the real numbers on the company’s inventory, revenues,
Dennis Kozlowski was living his dream as a multimillionaire and if anyone got in the way of his dream to create his empire then they would be stepped on like a bug. This is what happened to Jeanne Terrile at Merrill Lynch. Terrile smelled something funny coming from Tyco and when she acknowledged that something was wrong, she was shut down quickly. Nobody knows for sure if Kozlowski paid off the CEO of Merrill Lynch, David Komansky, or not and nobody knows what they talked about. The fact is that Jeanne Terrile was replaced and the stock recommendation for Tyco soon changed after their talk. Terrile decided to do what she thought was right and make sure to notify people of what she thought of the company. Because of Terrile’s ethical decision
Honky details the life of its author, Dalton Conley, as he grew up in a poor inner-city housing project in New York in the 1970s and 1980s. He and his younger sister, Alexandra, represented the only white kids in a neighborhood made up of mostly black and Puerto Rican families. Conley exhibited a fascination with and acute awareness of race -both of his whiteness and the distinction non-whiteness of those around him- from a young age, and this largely sets the tone for the rest of the book. Conley describes his childhood as being “a social science experiment” (XIII) on class and race, both of which are heavily emphasized throughout his memoir.
The report of the Departmental Committee on Homosexual Offences and Prostitution, also known as the Wolfenden Report, was published in Britain on 4 September 1957. It was established as a response to the number of previously reputable men who had been convicted of homosexual offences, as well as the growing number of men being sent to prison for acts of homosexuality. By the end of 1954 alone, more than one thousand men in England and Wales had been sent to prison for specifically that reason. It was the intention of the committee, therefore, to decriminalize private homosexual acts, as it was beginning to come into light that “homosexuality cannot legitimately be regarded as a disease, because in many cases it is the only symptom and is compatible with full mental health in other respects” (The Wolfenden Report, 1957). Homosexuality aside, there was also much focus on “cleaning up the streets” of Britain by enforcing the privatization of prostitution by increasing fines and incarceration periods for those caught in the public display of such acts. Based on these and other recommendations made by the committee however, it is evident that, although a need to decrease the number of men being criminalized for homosexual acts was necessary, the committee, as well as the public, was not yet ready to fully decriminalize homosexuality or prostitution themselves. However, in bringing such subjects to light, they themselves also manage to break the barriers dividing their own specified definitions.
The document is a House of Commons debate which has been recorded into Hansard; it was recorded on the 19th of June 1960. This was three years after the Wolfenden report was already published. It has documented the verbal debate that Member of Parliament Kenneth Robinson, who had represented the constituency of the borough of St Pancras North. He had raised the debate about the Wolfenden Committee, its findings on how the law conflicted between private and public life of homosexuals and what they had proposed to the House of Commons an alternative solution to the law set on Homosexuality. The committee had been created by David Maxwell-Fyfe, the Home Secretary in 1954, who had appointed the Departmental Committee on Homosexual Offences and Prostitution under Sir John Wolfenden. The committee had published the Report of the Departmental Committee on Homosexual Offences and Prostitution, also known as the Wolfenden Report, and was the first report of its kind to help the government compromise over the actions against homosexuals and prostitutes made by the law. After the documentation and research of many homosexual trials that have been conducted, as well as first hand interviews of homosexuals, this is what the Wolfenden Committee had recommended in order to tackle the discrimination of homosexuals by the public and by the law.
The three main crooks Chairman Ken Lay, CEO Jeff Skilling, and CFO Andrew Fastow, are as off the rack as they come. Fastow was skimming from Enron by ripping off the con artists who showed him how to steal, by hiding Enron debt in dummy corporations, and getting rich off of it. Opportunity theory is ever present because since this scam was done once without penalty, it was done plenty of more times with ease. Skilling however, was the typical amoral nerd, with delusions of grandeur, who wanted to mess around with others because he was ridiculed as a kid, implementing an absurd rank and yank policy that led to employees grading each other, with the lowest graded people being fired. Structural humiliation played a direct role in shaping Skilling's thoughts and future actions. This did not mean the worst employees were fired, only the least popular, or those who were not afraid to tell the truth. Thus, the corrupt culture of Enron was born. At one point, in an inter...
1. The main argument by Rothe is that white collar crimes were committed and that it is important to note that is important for capitalistic countries because the constant production of weapons equals cash in a form of war profiteering. The consequences of the relationship between government and some corporations is that the two are entangled and they support each other during crimes. The corporations in some way or another act like lobbyist to the government pushing the weapon industry because it equals profit.
Rather than being sticklers for following GAAP accounting principles and internal controls, this company took unethical behavior to a whole new level. They lied when the truth would have been easier to tell. It is almost as if they had no comprehension that the meaning of the word ethics is “the principles of conduct governing an individual or a group (professional ethics); the discipline dealing with what is good and bad and with moral duty and obligation”, (Mirriam-Webster, 2011). To be ethical all one has to do is follow laws, rules, regulations and your own internal moral compass, all things this company seemed to know nothing about.
investors and businessmen to work harder, his thinking was to make the people gain a better
"This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.
Based on what you read in this chapter, summarize in one page or less how you would explain Enron’s ethical meltdown.
The end of 2001 and the start of 2002 saw the end of a period of magnified share prices and booming businesses. All speculations of misrepresentation came to light and those firms which once seem unconquerable were now filing for bankruptcy. Within this essay, I shall discuss the corporate governance mechanisms and failures which led to the Enron scandal resulting in global corporate governance reforms being encouraged.
Lyke, B and Jickling, M. (2002). WorldCom: The Accounting Scandal. CRS Report for Congress, p2.
...ss. As fraudulent audit reports were presented to investors showing above market returns to keep capital coming in, actual losses kept compounding and Samuel Israel could not do anything to reverse them. The situation finally became too dire to handle and the fund entered bankruptcy while Mr. Israel and his two closest associates were sentenced to some of the harshest white-collar punishments of the time period.
They were committing fraud by creative accounting, acting illegally when using insider trading and shredding their documents relevant to the investigation. Next, consider the stakeholders. Anyone who owns stock in the company would suffer, along with every employee. Under the values bullet we can assume that they have none. Greed and power got the better of every one of them.