In this essay, I will discuss the circumstances that resulted in the merger, assess the significant positive (or negative) effects of the merger, and examine the organizational structure that has resulted from the merger. American Airlines filed for bankruptcy in November 2011. According to an interview with Richard Quest of CNN, Thomas Horton the new CEO of American Airlines stated that the company was forced into bankruptcy because of the cost disadvantages it faced compared to it’s competitors that had already gone through a bankruptcy. The news came as a shock to many. The company had enough money to sustain the losses that it may incur through
The government gave AIG 122.8 billion dollars. AIG committed several ethic mistakes after they receive their bailout money from the government. They went on multiple trips and spend a lot on vacations. AIG hand out 218 millions in bonus money to employees. Jake DeSantis wrote a letter to chief executive of AIG explaining what the company did was wrong, but explain why they did all those things.
Investigators have determined others were involved in the scheme.The U.S. Securities and Exchange Commission (SEC) has also come under fire for not investigating Madoff more thoroughly; questions about his firm had been raised as early as 1999. Madoff's business, in the process of liquidation, was one of the top market makers on Wall Street and in 2008, the sixth-largest. Madoff's personal and business asset freeze created a chain reaction throughout the world's
The Scandal: In 2002, the Securities and Exchange Commission filed charges against Adelphia Communications Corporation; "its founder John J. Rigas; his three sons, Timothy J. Rigas, Michael J. Rigas, and James P. Rigas; and two senior executives at Adelphia, James R. Brown, and Michael C. Mulcahey, in one of the most extensive financial frauds ever to take place at a public company (sec.gov)." The defendants were charged with fraudulently excluding billions of dollars in liabilities from its financial statements by hiding them on the books, falsified operations statistics and inflated earnings to meet Wall St. expectations, and concealing "rampant self-dealing by the Rigas Family, including the undisclosed use of corporate funds for Rigas Family stock purchases and the acquisition of luxury condominiums in New York and
On June 26th of 2002 the truth behind Ebbers and WorldCom went public. Ebber’s was convicted of an 11 billion dollar accounting fraud at telecom. On March 15th of 2005 Bernie Ebber’s ended up being guilty of conspiracy and security fraud. Ebber’s knew right from wrong and he ended up causing the biggest bankruptcy in history. The sympathy lies within the victims for the loss of 30 million dollars all together.
In December 2008, the SEC charged Bernard Madoff and his investment firm, Bernard Madoff investment Securitirs LLC, with securities fraud for the multi-billion dollar Ponzi scheme he perpetrated on advisory clients of his firm for many years. The SEC filed emergency motions to freeze assets and appoint a receiver, and worker to return as much money as possible to harmed investors. The Bernie Madoff documentary was one of the more interesting videos I have ever seen. While the Madoff controversy was a highly public topic, this documentary helped fill in the infamous story from start to end. At the start of Bernie Madoff career, he had a very successful market making business.
These scandals cost investors billions of dollars when the share prices of affected companies collapsed, and shook the publics’ faith in the security markets. When examining the SOX act you can see that since 2002 many things have changed in the past eight years. Corporate governance is one of many things that have changed; Public companies must now have a totally separate audit committee composed of entirely independent directors and must contain one financial expert. Security fraud now has much more extreme punishments for those who commit or conspire to commit fraud. Since the introduction of SOX auditors of public companies must keep documentation of an audit for seven years, destruction of any documentation or evidence that someone has committed fraud is now punishable by jail time and fine.
During an investigation there were many questionable accounting transactions that were brought up, such as large executive bonuses as well as many loans for large amounts of money that were later forgiven without repayment. Kozlowski and Swartz were sentenced to 8 – 25 years in prison ("Investopedia", 2014). Then a lawsuit against Tyco cost the company $2.92 billion in repayment to its investors ("Investopedia", 2014). The biggest issue here was allowing for a CEO and CFO to have too much access to funds. A protocol should be in place that when a sale of stocks is made and no one authorized it then a full audit should take place from a third party or if a loan is going to be made then more then just the CEO and CFO’s approval needs to be given.
Between the “Black Tuesday” and November thirteenth over 30 billion dollars had disappeared from the American economy. It took nearly twenty-five years for many of the stocks to recover. It caused many banks to fail which led to failed businesses and loss of jobs as well as the start to the Great Depression. Occupy Wall Street—started on September 17, 2011 in New York City’s Wall Street financial district—represents a real anger in the country caused by the effect of oppressive student loans, massive debt, lost jobs, and ultimately lost hope in the nation and economy. The main issues are social and economic equality, greed, corruption, and the excessive influence of corporations on government.
Unfortunately, it did. On October 29, 1929, the stock market crashed, and the United States once again found itself in economic turmoil. Prior to this, many people had begun purchasing stock on margin, or in other words, on credit. When the market crashed, the stock brokers called the loans they gave out back so that their companies may survive, except the loans couldn’t be paid back by the debtors. Many of the nation’s banks soon went under because they too had paid into the stock market and had lost much of their money.