Questions
1. Do you think that the events recorded in this chapter are isolated instances of business malfeasance, or are they systemic throughout the business world?
2. The events recorded in this chapter have given rise to legislative reforms concerning how business executives, directors, and accountants are to behave. There is a recurring pattern of questionable actions followed by more stringent legislation, regulation, and enforcement. Is this a case of too little legislation being enacted too late to prevent additional business fiascos?
3. Is there anything else that can be done to curtail this sort of egregious business behavior other than legislation?
4. Many cases of financial malfeasance involve misrepresentation to mislead boards of directors and/or investors. Identify the instances of misrepresentation in the Enron, Arthur Andersen, and WorldCom cases discussed in this chapter. Who was to benefit, and who was being misled?
5. Use the Jennings "Seven Signs" framework to analyze the Enron and WorldCom cases in this chapter.
6. Rank the worst three villains in the film Wall Street: Money Never Sleeps (2010). Explain your ranking.
7. In each case discussed at some length in this chapter-Enron, Arthur Andersen, WorldCom, and Bernie Madoff-the problems were known to whistleblowers. Should those whistleblowers each have made more effort to be heard? How?
8. The lack of corporate accountability and an increased awareness of inquiries and other questionable practices by corporations led to the Occupy Movement Identify and comment on additional recent instances that have led to concerns over the legitimacy of corporate activities.
9. It seems likely that the top executives of the major banks involved in the manipulation of the LIBOR rate were aware of the manipulations and of the massive profits and losses caused by those manipulations. Why did they thing that such manipulations could continue to be undetected and/or unpunished?
10. The new antibribery prosecution regime involves serious charges and penalties for bribery in foreign countries during past times when many people were bribing in the normal course of international business and penalties were not levied. Is it unreasonable to levy extremely high fines at the beginning of the new regime and/or not to limit the period over which bribery can trigger those fines? Why and why not?
11. At GM and Takata, whose improper actions finally came to light, a whistle-blower raised objections to the actions before or very early in the production process. Why were their concerns ignored and risks taken? In VW's case, why didn't a whistle-blower come forward? What aspects of governance were lacking in each company?
12. The CEOs of Valeant Pharmaceuticals and Turing Pharmaceuticals took the view that they could jack up the price of their drugs by huge percentages because they could, and they failed to consider seriously enough whether they should. Whose fault was this? In a well-functioning corporate governance system, what measures should be in place to control such actions?
13. What are the reactions and outcomes that can be attributed to the leaked Panama papers