The Adelphia Scandal

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The Adelphia Scandal (Milestone 1) Introduction to Adelphia Communications Corporation: Adelphia Communications Corporation is one of the nation's leading cable service providers with more than 5.8 million subscribers in 37 states and Puerto Rico. It was started in 1952 by John Rigas and his brother Gus, when they purchased "their first cable franchise in Coudersport, Pennsylvania, for $300 (fundinguniverse)." In 1972 the Rigas brothers name their company Adelphia, which is the Greek word for brothers. In 1986 they "consolidates several cable properties under the Adelphia name and takes the company public (fundinguniverse)." Throughout the 1990s by gaining other systems, Adelphia grew significantly and became one of the largest cable providers in the country ( In 1998 Adelphia had over two million subscribed customers. In 2002 Adelphia got into significant trouble when their fraudulent dealings and accounting practices go exposed. In 2005, Comcast and Time Warner Cable announced their plans to buy the assets of Adelphia Cable. 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 (" 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

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