Question

Review "White Collar Crimes and the Dilemmas of Corporate Control" on p. 178-193 of your text and research two examples of white collar crime using the Internet. Tips: You could research Enron, Arthur Andersen, the Erin Brockovich case, Tyco and Dennis Kozlowski, the Teledyne case, potential liability of CEOs of financial institutions for misrepresentation, the Maddoff Ponzi scheme, etc.

Answer 1

The highly-publicized ENRON financial scandal can be seen as a typical white-collar crime. Some kind of transparency could be maintained by the executives of the company which could be released to the different employees and investors in the firm. This manifested in the form of falls and skewed reporting benefits despite having the major losses in the financial terms to the company. In order to offshore the partnerships, the debt obligations were shuffled by CFO Andrew Fastow in the latter part of the 1990s. The reporting of trading revenue was done inaccurately and the contracts were sold back and forth within itself by using the offshore partnerships and every time it collected some revenue. on December 2, the company applied for Chapter 11 bankruptcy protection and the company filed a case against Dynegy for incorrect termination of unsuccessful acquisition. After a month, the resignation was tabled by Lay and a criminal investigation of Enron was initiated.

the case of the U.S vs Martha Stewart and her broker Peter Bacanovic can be seen as a typical example of other white-collar crime. Some attempts were made by Martha Stewart and Peter Bacanovic tried in order to cover up this crime and many obstructers were paid on the way to investigation and many inaccurate claims were made regarding the personal stock trading. ImClone shares that were possessed by them at Merrill Lynch were tried to be sold out by them and these shares were having a worth of $7.3 million, at that time. The attempt to sell the shares came to a realization when they come to know that a negative report on Erbitux, was about to be published by the Food and Drug Administration. The focus of this negative report was on a cancer drug central to ImClone's commercial viability. The case was filed against Martha Stewart on nine accounts incorporating conspiring to obstruct an investigation, obstruction of justice, making false statements. She was found guilty of these crimes in March 2004 and was given a sentence of five-month terms and a two-year period of supervised release