Whistleblower for Enron
Enron started as a Houston-based pipeline company in 1985. It successfully lobbied for deregulation of electrical power markets which allowed it to be a middleman by signing contracts to buy and sell electricity and natural gas and making money on each end. After profiting from energy trading, Enron began to design contracts called derivatives whereby customers could insure themselves against risks, such as higher interest rates, energy costs, currency conversion changes, and even weather changes. As the derivatives became more complex, partnerships or "special purpose entities" were created to hold them which kept debt from showing up on Enron's financial statements. Their liabilities kept growing and on October 16, 2001, Enron announced a $638 million loss for the third quarter. On November 8, 2001 the company announced that it had overstated earnings by $586 million over the prior four years and it was responsible for up to $3 billion in obligations. At the time of its filing, Enron was the largest accounting fraud in history, which led to its Chapter 11 bankruptcy on December 2, 2001. Sherron Watkins was the former vice president for the Enron Corporation. She was the whistleblower who exposed the illegal accounting fraud that took place within Enron. She began working for Enron in 1993 and in 2001 she worked directly for the Chief Financial Officer, Andrew Fastow. She worked closely with the financial records, which is how she discovered the accounting fraud. Upon this discovery she privately notified Ken Lay who was the CEO of Enron to warn him that the company was in danger of collapsing, due to accounting fraud. Her intentions were to bring the company out of debt and not allow it to go bankrupt. The warnings went unheard and were brushed under the rug. Shortly after warning Mr. Lay the fraudulent behavior was exposed. This was the end of
Enron - Kenneth Lay
By early 1987, problems at Enron emerged. Despite the evidence of potential financial misconduct by top execs at Enron's oil trading unit in Valhalla, N.Y., Lay allowed the execs to continue at the company. Months later, those same execs were found to have committed other improper acts that opened the company up to as much as a billion dollars in losses. As a result, the office doors in Valhalla were closed. Although this pales in comparison to the scandal 15 years later it does have eerie similarities.
World Com Case
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.
Tyco Unethical Perspectives and Unintened Consequences
The company had forgiven millions of dollars in loans and granted excessive bonuses to executives. It was also found that Tyco's stock price was inflated. (Kaplan, 2009) The main impropriety was discovered when District Attorney, Morgenthau, was investigating Kozlowski for tax evasion on some exotic art work. The investigation uncovered that many other questionable business practices had ensued. (Kaplan, 2009) The illegal and unethical behavior occurred when (CEO) Kozlowski, and (CFO) Swartz, awarded millions of dollars to themselves and other executives that were not approved by the board of directors.
Tap Whistleblower History
HISTORY OF WHISTLEBLOWER (DOUGLAS DURAND) Douglas Durand is the paragon of a corporate whistleblower. Shortly after stepping in as vice president of sales at TAP Pharmaceutical Products in early 1995, he began to suspect the company was conspiring with doctors to overcharge the federal government's Medicare program by tens of millions of dollars. But instead of trying to fix the problem, he spent seven months gathering evidence of supposed fraud. Then he quit in 1996 and filed a secret lawsuit against TAP. One motive which is if he could prove the company was dirty; he would share a nice lump of any money TAP paid back to the feds.
Bofa Merrill Merger
By the time the Merrill acquisition was announced on Monday, September 15, the stock market crash was well underway. The S&P 500 index was down 24 percent from its October 2007 historic highs. A few weeks later, in October 2008, the equity market fell off the cliff and the S&P 500 index was down 43 percent from the year before. The stock market crash reflected broader economic problems such as the crash of the housing market, disturbances in the credit markets, global recession and increasing unemployment. According to Ben Bernanke, a prominent scholar of the Great Depression and current Chairman of the Federal Reserve, "the financial shocks that hit the global economy in September and October were the worst since the 1930s.
Case 3-4 Essay
This resulted in huge doubts being placed upon the accounting profession. Additionally, earnings restatements manifold between 1997 and 2000, and Enron reported $600 million in losses. Investors were also losing on market capitalization from audit failures. B. What major changes occurred as a result of the accounting scandals at that time?
Josey Embezzlement Case
| Josey Embezzlement Case	| | | Jennifer Allgeier	| 9/11/2011	| | Jeanette Elizabeth Josey is involved in a million dollar embezzlement case. She is accused of embezzling the money from her employer James Gillikin. James Gillikin is the owner of Gillikin Marine Railways, Inc., Morgan Creek Seafood, James T Gillikin Inc, Traveler Captain Jimmy Inc and Captain James II Inc. Josey worked as the office manager for the group for seventeen years. Detectives in Carteret County said that this is the largest embezzlement case they have encountered. According to WITN.com news channel Josey embezzled the money from legitimate payee accounts of the corporation's general accounts and then converted the money to her own use.
The Ultimate Rip-Off: a Taxing Tale
Nick had started out his career as a strike-force Agent; their basic function was to uncover possible criminal activities. Their duties often consisted of undercover work. The book explains some terms used in the industry along with some statistics, and IRS history. For example, in 1998 Congress prohibited financial status or economic reality techniques to determine the existence of unreported income unless an agent has a reasonable indication that there is a likelihood of unreported income. The targets of Special Agents who work for TIGTA are dishonest Treasury Department employees, as well as government officials and employees.
Glaxosmithkline Case Essay
Business Ethics Homework 6 20 March 2013 GlaxoSmithKline Case 1. Since 2005, GSK was hit with several severe lawsuits regarding product liability. When Andrew Witty was assigned the chief executive role of the company, post-merger, the ice of shares declined 50 percent, which harmed the company's earnings, sales and reputation. The first ethical lapse came about when GSK was criticized for selling drugs to the public without informing its buyers of the detrimental side effects. The detrimental product was Paxil, designed to relieve depression, generated disastrous side effects such as addictive behavior and birth defects.
Worldcom Ethical Case Study
Scharff (2005) reported, "WorldCom, now named MCI, recently emerged from bankruptcy protection after reporting accounting irregularities of $11 billion". Scharff (2005) further noted, "On March 2,2004 Bernie Ebbers, WorldCom's ex-Chief Executive Officer, was charged with conspiracy to commit securities fraud, securities fraud, and falsely filing with the sec and on May 24,2004 six additional counts were filed against him. On March 15, 2005 Ebbers was found guilty on all nine counts and faces a maximum penalty of 85 years in prison and an $8.25 million fine". WorldCom – Ethical Problems Moberg & Romar wrote, "three major issues in the fall of WorldCom: the corporate strategy of growth through acquisition, the use of loans to senior executives, and threats to corporate governance created by
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