Discuss the role that AIG’s corporate culture played in its downfall. 2. Discuss the ethical conduct of AIG executives and how a stronger ethics program might help the company to strengthen the ethics of its corporate culture. 3. What could AIG have done differently to prevent its failure and subsequent bailout?1.
Scenario: WIRETIME, Inc. (Janet) Has WIRETIME, Inc. committed any torts? If so, explain. Yes, WIRETIME, Inc. has committed business competition tort. With them offering Janet a position within their company, who is a direct competitor of BUGusa, Inc. they are directly violating Janet's employment contract. A business competition tort states it is a tortious interference with an existing contractual relationship.
How did the top leadership at Enron undermine the foundational values of the Enron Code of Ethics? Key players among the top leadership were Andrew Fastow, Jeff Skilling, and Ken Lay. Each of these individuals contributed to undermining Enron’s foundational values. Enron numerous executives such as former CEO, former chief financial officer and treasurer who forced company to the bankruptcy were found guilty after the bankruptcy. They were engaged in money laundering, fraud and conspiracy.
First, it gains people’s awareness of ethical issues and consequences they will face in a company when they are in an ethical dilemma. Thus, the act provides a guide for the direction of managers’ behavior. Second, not only in the WorldCom case, but also in other financial fraud events that occurred during 2001 and 2002, executives should take main responsibilities without question. Therefore, one of the main points is to clear executives’ responsibilities, such as in evaluating company’s internal control. Also, the act increases the criminal responsibilities for executives and white-collars.
In January 1982, he was convicted of a misdemeanor theft offense and was sentenced to 6 days in jail with 12 months’ probation. Andrade was arrested again in November 1982 for multiple counts of first-degree residential burglary. He pleaded guilty to at least three of those counts, and in April of the following year he was sentenced to 120 months in prison. In 1988, Andrade was convicted in federal court of “transportation of marijuana,” App. 24, and was sentenced to eight years in federal prison.
Lessons learned: Auditing firms can be held responsible for the misrepresentation of financial information if they don’t practice due care. Auditing firms should asses risky accounts and suspicious transactions to ensure the reliability of the financial statement. Questions 1. Identify legitimate business practices that corporate executives can use for the primary purpose of manipulating or “managing” their company’s reported operating results. Are such practices ethical?
Such circumstances where a director is to face personal liability is misusing company information. Rene Rivkin was the director and chairman of his own company and was sentenced to nine months of weekend detention and fined $30,000 after being found guilty of insider
It was not until 1996 that Mr. Pavlo started the fraud against MCI which involved several customers. End the end it was discovered that Mr. Pavlo had defrauded over a six-month period in the tune of $6 million dollars that were deposited in a bank account in the Cayman Islands. In 2001, Mr. Pavlo pleaded guilty to wire fraud and money laundering and was sentenced to 49-months to be served in prison. (Lyon & Tocco, 2010) After Mr. Pavlo got out of prison he started going around to various colleges and universities giving speeches for a price about what he had done and to speak of of his hope for better ethics in the accounting profession. In this paper we are going to discuss several things pertaining to this case.
Events from Enron, Barings Bank, World Com and other corporations are used to provide examples of this process. Finally, recommendations are made about how an organization should address the discovery of such illegal activities in an effort to stay viable. What evolves in an organization to draw law abiding company leaders to partake in white-collar crime? In the majority of recent high-profile cases of white-collar crime, such as Enron Corp., WorldCom, HealthSouth Corp., Adelphia Communications, Tyco International, HIH Insurance, Hollinger International Inc. and Xerox Corp., executives charged with committing white collar crime had no track record of committing crime. The outcome was a product of individual characteristics, a specific organizational environment and an opportunity.
Also, they have to know how to improve the risk management to deal with the internal and external risks. Introduction and Aims In this case study, an example of Lehman Brothers failure and its after effects on the financial markets is presented and raises issues of risk management. The report states the firm’s financial policy and performance which can reflect potential risks. The new Chief Executive Officer (CEO) made several poor business strategies to face the global financial crisis, which in turn, the