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Enron and worldcom corporate scandals
Lessons from corporate scandals
Enron and worldcom corporate scandals
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You have had sleepless nights anticipating graduating from university and receiving your diploma. As you work your way up, you finally accomplish your lifelong dream: a banker at Citigroup. Suddenly, the market crashes and some loans you set up have gone wrong. You had no intentions to put the company in danger. All you wanted was to contribute to the bank’s prosperity and live a comfortable life. The bank blames you for what has happened, fines you accordingly and puts your job in jeopardy. Despite your honest intentions, you are now left alone and blamed. Do you think that is fair treatment?
Surowiecki bases his arguments on the idea that all senior management employees at banks abuse their power and make self-serving decisions. Although
Shlomo Yitzchaki is one of the most influential rabbis in Jewish history. Born in Troyes, France in 1040, Shlomo Yitzchaki grew up Jewish and learned from his father. When his father died in 1046, Shlomo Yitzchaki lived with his mother until 1057 when he married his wife and joined the Yeshiva of Yaakov Ben-Yakar. Since then he has become a staple in Jewish learning and Jewish history. Today we know him as Rashi. Rashi was and is very influential to Jewish scholars because of the way his commentary spread, the simplicity and variation of his commentary, and the controversy of his method that is still discussed in modern times.
Management does not communicate with the workers, so they cannot discuss problems that are accruing, and possible solutions that may help the business run smoother. You can see this at Carson’s, the study mentioned that employees had no say in important decisions and were even afraid to address concerns to management. The study also mentioned that employees were not given proper constructive criticism. Instead of management teaching employee’s better ways to handle tasks, they would get upset and punish their employees. This is another aspect to an Exploitative Authoritative structure. According to text, all rewards are given to management. Instead of rewarding good things that their employees do, management punishes and threatens. After looking at the Exploitative Authoritative System that was used to run the Carson’s location, it is easy to see how and why the employees are
First of all, they will not be able to buy tangible properties such as house, car and etc. because of that their credit ratings got a huge hit. Moreover, only 5,300 of the employees that were fired from the Bank, 10% were Managers. What could have motivated them to engage in this sham? This is not an attempt to imply all were of malicious but certainly most them led the way. The aggressive sales goals pushed employees to break the rules. “On average one percent 1 percent of employees have not done the right thing, and we terminated them. I don’t want them here if they don’t represent the culture of the company,” says John Stumpf, the company’s longtime chief executive, in an interview with The Washington Post. It is obvious that simple employees and managers could not break the law if someone from the top did not allow them to do so. But the executive board of Wells Fargo claimed that they only fired 1 percent of below employees and some managers for fraudulent accounts, however they also might be involved in that business crime although to build a case against a company executive, prosecutors would have to show “they knew there was a plan to create false accounts to drive up sales,” said Brandon L. Garret, a professor at the University of Virginia School of Law. Even if it appears that the executive purposefully attempted to avoid knowing about the fraud, prosecutors may be able to build a case. Because they don’t have to participate if there is willful
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
The PBS Frontline Documentary The Untouchables shined light on the claim that wealthier people in today’s society get off easier when they break the law. During the financial crisis of 2008, it was said that fraud was committed when many mortgage bankers and high-end executives on Wall Street knowingly bought loan portfolios that didn’t meet their policy credit standards. Even with the evidence in place, no one was arrested and held responsible for a stock crash that nearly destroyed the entire financial system of the United States. With a powerful justice system and justifiable evidence in place, no was prosecuted. Did the justice system not take the necessary steps to ensure that justice was served
In conclusion, people have still not been held accountable for one of the largest financial collapses of all time. I think that there should be a limit on who gets qualified for any loan in order to avoid this situation again. I think that everyone who was responsible should be held accountable for what happened even if it means banks going under.
In the midst of the current economic downturn, dubbed the “Great Recession”, it is natural to look for one, singular entity or person to blame. Managers of large banks, professional investors and federal regulators have all been named as potential creators of the recession, with varying degrees of guilt. No matter who is to blame, the fallout from the mistakes that were made that led to the current crisis is clear. According to the Bureau of Labor Statistics, the current unemployment rate is 9.7%, with 9.3 million Americans out of work (Bureau of Labor Statistics). Compared to a normal economic rate of two or three percent, it is clear that the decisions of one group of people have had a profound affect on the lives of millions of Americans. The real blame for this crisis rests on the heads of the managers that attempted to play the financial system through securitization, and forced the American government to “bail out” their companies with taxpayer money. These managers, specifically the managers of AIG and Citigroup, should be subject to extreme pay caps for the length of time that the American taxpayer holds majority holdings in their companies, as a punitive punishment for causing the Great Recession.
Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.
Have you ever felt stuck? Wherever you are, it’s the absolute last place you want to be. In the book Into the Wild, Chris McCandless feels stuck just like the average everyday person may feel. Chris finds his escape plan to the situation and feels he will free himself by going off to the wild. I agree with the author that Chris McCandless wasn’t a crazy person, a sociopath, or an outcast because he got along with many people very well, but he did seem somewhat incompetent, even though he survived for quite some time.
“Justice cannot be for one side alone, but must be for both” (Roosevelt). The goal of America’s legal system as we know it is that everyone is given an equal opportunity to stick up for what they may or may not have done, as described by former first lady Eleanor Roosevelt. Also this is what officials strive for, it is not always the case. Facts can be skewed, distorted, or misrepresented to make one side seem to be guilty without a doubt and to make the other side seem as if they have done nothing wrong. The Crucible by Arthur Miller begins and ends with one-sided accusations of witchcraft. It all results from a group of girls who had been dancing in the woods. After two fall sick, the accusations begin. The girls who were dancing, especially Abigail Williams begin blaming others to look less guilty themselves. Accusations are flying left and right so that soon, hundreds are in jail and over a dozen are executed. Abby’s main goal is to get rid of Elizabeth Proctor, so she can be with John Proctor, a man she previously had an affair with. However, John is not interested in Abby and his
Wells Fargo's management is accusing employees who have been terminated so far while holding themselves chaste. The bank's board consented to repeal
Witch hunts” constantly reoccur throughout history - in 1600s, 1953 and in 2014. Good morning, fellow directors. Today, I want to demonstrate that “the crucible” by Arthur Miller in 1953 is not just a play for 1953, but a play that relates to any period of time, notably to our modern society. The crucible is an allegory of 1953 McCarthyism and social chaos of the time. Today’s government manipulated the truth creates the fear of “outlawed bikies gangs” similar to 1692 theocratic government creates fear of witches and McCarthy’s communist terror. Unfortunately, the truth is never clear cut, but skewed, twisted and sculpted lies that shockingly benefit a small governing body and its ideologies. Therefore, ‘The Crucible’ is a worthwhile play to be shown in Queensland Theatre as it reminds us of an invaluable lesson and could prevent the same foolish action reoccurring on future generations. The play intertwines with significant themes such as lies, truth, power, stereotypes and mass hysteria which are pivotal dynamics in today’s society.
The Goldman Sachs Inc is a Wall Street’s titan that was able to survive during a financial crisis as a result of deceiving its clients. During the financial crisis it was charged for deceiving its clients for having sold to them mortgage securities that had been designed secretly by John Paulson’s hedge-fund firm. After designing the securities John made a killing betting for the collapse of the housing market. But Goldman denied the securities and Drexel Burnham who was carrying out investigations succumbed as a result of criminal insider trading. Due to that the charges the firm was to undergo were unfounded and Goldman fought to defend its reputation. Civil charges against Goldman and Fabrice Tourre which was one of Goldman’s star traders marked one of the major attacks that the government made on Wall Street. According to Roben & Paula (2010) the deals that the company had made are believed to have caused the financial crisis that was experienced by the nation as well as the whole world.
When someone first enter Cinzetti’s the smell of genuine Italian cuisine wafts through the door. The restaurant Cinzetti's has many great options such as the delectable crepes that are so packed with delicious customizable flavors, and to top it off the incredibly fluffy crepes are made right in front of you. The soufflets are fantastically gooey with a rich taste. Even the pasta will leave the pickiest of people blow away with the creamy taste
...company workers being affected by the financial crisis. We don’t want to point fingers here only assess the ethical dilemmas that these companies face. Subjective human judgment opens up for the possibility of undesirable human biases and manipulation. However, with or without human judgment, financial models of credit risk are subject to manipulation, both legally and fraudulently.