What Is Adelphia Ethical Dilemma

The ethical dilemma faced by Adelphia is fraud. Adelphia scandal involves both fraudulent financial reporting and misappropriation of assets. Adelphia founded by John Rigas family in 1952 in Pennsylvania. John Rigas family remained entirely Adelphia’s shares until 1986, when the company went public. In other words, Adelphia began with the family type corporation. John Rigas and his three high educated sons, Michael, Timothy, and James occupied the top executive position in the Adelphia. This is a big sign for fraud beginning.

The first ethical dilemma faced by Adelphia scandal is massive financial statements. In order to meet the Wall Street expectations, John’s family hided $2.3 billion in debt, which could pretend Adelphia looks like the

strongest cable company in the United States. Based on NASDAQ news, shares of Adelphia stock were listed on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") until June 3, 2002 (1). In March 2002, as stated in the SEC, “Adelphia and Rigas family with fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates.”(2) As mentioned previously, John Rigas and his three sons held the high position in Adelphia. John Rigas was the Executive Vice President of operation and Secretary; Timothy was CFO, Chief Accounting Officer, and Treasure, and James was Executive Vice President of Strategic Planning. Each person seems independent and reliable, however, they are families. The family relationship corporation implicated opportunities for John’s family to conceal something else.