In the article, Devin Leonard (2005) describes the fraud of AIG and AIG’s former CEO Greenberg. Joye discloses that AIG has been improperly booking premiums it receives for workers’ compensation insurance and the CEO Greenberg knows it but does not do anything to stop it. Joye reports the fraud in meetings with Greenberg, Tizzo and the president of AIG but receives no attention. Later, Joye resigns and works for other companies. He keeps silent about what he discovers for many years but he keeps his AIG files and shows them in an investigation on AIG’s accounting fraud from Spitzer.
In August 2001 while serving as the Vice President of Corporate Development at Enron, Sherron Watkins wrote a letter to then CEO Kenneth Lay voicing her concerns over the accounting practices at Enron. “I am incredibly nervous that we will implode in a wave of accounting scandals,” she wrote in the letter. “My 8 years of Enron work history will be worth nothing on my resume, the business world will consider the past successes as nothing but an elaborate accounting hoax.” Lay retained the legal services of Vinson & Elkins to investigate Watkins letter and found no wrongdoings. In October of 2001 the SEC begins an informal probe of Enron shortly
Bernard Lawrence ‘Bernie” Madoff Valerie Correa Prof. Masheika E. Allen BUS 100 Mini Session 10/26/2010 1. Describe three types of illegal business behavior alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business. Mr. Madoff was found guilty of white collar crimes. Some of the crimes he was found guilty of were money laundering, perjury and securities fraud. Description: Securities fraud is one of many white collar crimes which violate trading laws.
He has played an important role in disclosing other incidents of bribery by his company. The second stakeholder is Someshwar Mishra, who is the chief excise commissioner. His responsibility is to collect the right tax for the government, but $12,500 cash was found in both his office and in his car. The allegation was that he helped Flex evade excise duty. The third stakeholder is the court.
Another aspect of this case involved the role of government regulations. Starting as early as 1992, the Securities Exchange Commission (SEC) had receive complaints and tips about Madoff’s company but the SEC either didn’t investigate or fail to follow through on a cursory investigation. It is another reminder of the limitations of legal regulations in providing sufficient oversight to unethical business practices. 2. Stakeholders * Madoff’s clients: many investors loss their investment when Madoff arrested.
She spearheaded an investigation into how Hewlett Packard’s long term strategic plan and other corporate details appeared in newspaper articles namely the Wall Street Journal. Dunn hired people to conduct an investigation to find out who is leaking the information to the press. The people she hired practiced illegal techniques in gathering information called pretexting. According to the federal trade commission, pretexting is the practice of getting individual’s personal information under false pretenses ("Pretexting: Your personal Information Revealed," 2009, para. 1).
A lengthy investigation and several hearings pressed JPM leaders on their trading practices. One hearing in particular, conducted by the Permanent Subcommittee on Investigations accused the banking giant of misleading investors and regulators about the risks taken during trading. In his testimony, JPM’s chief financial officer, Douglas Braunstein, “said his statements were based on what he knew at the time, conceding that in hindsight the credit portfolio ‘did not act as a hedge, it changed dramatically and we misunderstood the risks’” (www.4-traders.com, 2013). Later in his testimony, Braunstein mentioned that his 2012 pay was cut in half to approximately $5 million, because of the trading debacle. Other bank officials made similar statements in an attempt to dispel public opinion that they, and everyone in the banking industry, were overpaid and over-privileged.
He engaged in unauthorized trades totaling as much as €49.9 billion by creating losing trades intentionally so as to offset his early gains. Around 1.4 billion in hidden profits were generated by the end of 2007. Kerviel stated that his actions were known by superiors and that the losses were caused by panic selling by the bank. However, criminal charges were made against Keirvel for abuse of power, forgery of documents and illegal entry into company computer systems. The banks losses due to Keirvel’s activities among other actions were of €4.9 billion.
Ethicality of Accounting Activities Ethicality of Accounting Activities The case involving WorldCom, a telecommunications company, was one of the biggest accounting scandals to happen in the US. The company filed for bankruptcy in 2002 after an internal auditor, Cynthia Cooper, discovered discrepancies in the accounting data. After a complete audit with a team, Cynthia found that the discrepancies were fraudulent and unethical. More than one department in the company played a role in covering up the accounting activities that were not ethical or legal. Accounting Activities in Detail The key accounting activity in the case dealt with incorrect journal entries for capital expenditures.
Waste Management From Bottom to Top of the Heap Ryan Schlunz George Fox University Waste Management Between the years of 1992 and 1997, the executive leadership at Waste Management, Inc. started a wide array of fraudulent accounting practices to make the company’s financial position and financial statements look more appealing to shareholders. Driven by greed, and a desire to keep their high-profile jobs, at least six of the top executives, including the CEO and CFO, were in on the fraud and profited from it. The SEC filed suit against the six executives at Waste Management in March of 2002, alleging that the fraud started as the executives “fraudulently manipulated the company’s financial results to meet predetermined earnings targets. The company's revenues were not growing fast enough to meet these targets, so defendants instead resorted to improperly eliminating and deferring current period expenses to inflate earnings.” (Newkirk, 2002). The fraud came in several forms.