Matt LaFlamme Bus law 9am The Sarbanes–Oxley Act, also known as SOX was enacted July 30, 2002. SOX is administered by Securities and Exchange Commission, which sets time limits for compliance and publishes rules on requirements. SOX is not a business practice and does not regulate on how a business should store their records, it defines which records need to be stored and for how long they need to be stored. SOX was enacted due to the reaction of multiple major corporate and accounting scandals, which include Enron , Tyco international and WorldCom. These scandals cost investors billions of dollars when the share prices of affected companies collapsed, and shook the publics’ faith in the security markets.
He industrialized a body of executives that used accounting loopholes, special purpose entities, and poor financial reporting, to veil billions in debt from unsuccessful deals and projects (Bratton, 2003). Chief Financial Officer Andrew Fastow and other executives were able to deceive Enron's board of directors and audit committee regarding breach on accounting ethics as well as pressure Andersen to overlook the issues (McLean & Elkind 2003). By 1992, Enron was the largest merchant of natural gas in North America, and the gas trading business became the second largest contributor to Enron's net income, with earnings before interest and taxes of $122 million. The creation of the online trading model,
Not for good reasons though. The company had earned the dubious distinction of being involved in the largest accounting scandal ever to hit the US corporate history. WorldCom had reportedly misrepresented its financial statements to an extent of around $ 4 billion. The company admitted that it had resorted to fraudulent accounting practices for five quarters (four quarters of 2001 and the first quarter of 2002). Soon after, WorldCom terminated the services of some of its top executives including Scott Sullivan (Sullivan), the Chief Financial Officer and David Myers, the Senior Vice President and Controller.
RUNNING HEAD: AMERICAN AIRLINES American Airlines and US Airway’s Merger By Aveon Sims Strayer University BUS 508 Contemporary Business Professor Jean Fonkoua August 24, 2014 Abstract American Airlines has suffered tremendous profit losses over the last few years. The losses have been so great that the company filed Chapter 11 bankruptcy. The news for the Chapter 11 bankruptcy protection was a shock to many, considering the fact that they had enough money to operate and cover their losses through the following year. The merger indeed was a great decision on behalf of American Airlines. The merger itself was questionable.
6, 2008. In an already tumultuous market the preferred stock of the two firms tumbled to below a dollar. September 2008 was the month that saw the fall of many financial institutions. Banks termed too big to fail. Lehman Brothers file bankruptcy, Merrill Lynch was bought out by Bank of America, and AIG, an insurance company that sold insurance to investment banks to cover the downturn of investments, was on the brink of financial distress along with so many other failing financial institutions.
HSBC: A Money Laundering Machine Abstract This paper is about the scandal HSBC and its subsidiaries underwent during 2012. HSBC is one of the largest banking organizations in the world and in 2012 the organization went through some of its worst times and through one of the worst banking scandals that the world has ever been witness to. The paper discusses the background of HSBC as well as the background for many issues that were brought up in the accusations against HSBC. The paper explains several of the issues and more importantly, the violations that HSBC performed throughout several years. Money laundering, drug trafficking, and terrorism are main concepts that this paper will discuss related to the actions of HSBC and its subsidiaries.
Accounting – Fraud case Satyam Systems, a global IT company based in India, has just been added to a notorious list of companies involved in fraudulent financial activities, one that includes such names as Enron, WorldCom etc. The Satyam Computer Services scandal was publicly announced on 7 January 2009, when Chairman Ramalinga Raju confessed that Satyam's accounts had been falsified. The preliminary investigations by Registrar of Companies and confession by Mr. Raju revealed the balance sheet of Satyam for the year 2008 contained `cash and bank balances’ of Rs 5040 crore (US $ 1.12 billion) as against the Rs 5361 crore (US$ 1.12 billion) reflected in the books, an accrued interest of Rs 376 crore (US$ 83.85 million) which was described by Raju as `non existent’ , an understated liability of Rs. 1,230 crore (US$ 274.29 million) on account of funds was arranged by himself and an overstated debtors' position of Rs. 490 crore (US$ 109.27 million) as against Rs.
The significant drop in the S&P 500, one of the world’s broadest stock indexes, clearly reflects the weakened economic confidence and purchasing power after the financial contagion initiated by Lehman Brothers: Lehman Brothers files for bankruptcy 10 Canada, America’s largest trading partner, was no exception to the global slump faced by economies worldwide as its Gross Domestic Product (GDP) shrunk by 4.64% from 2008 to 2009. The decline in Canada’s GDP primarily resulted from a major decrease in Canadian trade flows. From 2008 to 2009, Canadian exports and imports of goods fell by 24.43% and 15.71%, respectively, while Canadian service exports decreased by 5.57% and imports by 3.82%. Emphasising the trade of goods and services during the peak (2008-2009) of the crisis is crucial to assessing the impact of the financial downturn on Canadian economy.5 From 2008 to 2009, the largest import declines occurred in the energy sector, 36.1%. The significant factor affecting the energy sector was the price of crude oil.
The CEO and management abolished not only corporate culture, but many other rules and norms of a business. This is a case of how multimillion dollar corporation collapsed in two weeks. It took them sixteen years to build on of the strongest corporation in a wall street, and took them two weeks to go bankruptcy. Wall Street’s analysts could not understand how Enron always did better than the competitors. But it was Wall Street analysts also, who kept rising the stock prices of Enron.
In 1933, all of the banks throughout the country were closed for a four-day period, and 4,000 banks closed permanently. The act was originally part of President Franklin D. Roosevelt’s New Deal program and became a permanent measure in 1945. Just when things started to get good ,we have another downfall. The Great Recession of 2008 had many causes. The first major cause was stagnating oil prices (easily surpassing the $ 100 a barrel), driven by geopolitical uncertainties, the collapse of stock markets and subsequent diversion of speculative investment market and the expected oil production cuts by the OPEC.