PART 1:PLEASE COMPLETE WITH A MIN OF 300 WORDS
Examine ethical behavior within firms in relation to financial management. Provide two (2) examples of companies that have been guilty of ethics-based malfeasance related to financial management and determine why their comeuppance was deserved.
Recommend two (2) actions that Gyms could take in order to raise capital that will, in turn, enable it to reach its expansion goals. Defend your response. Support your recommendation with two (2) real-world examples of successful implementations of these actions.
PART 2:PLEASE COMMENT WITH A MIN OF 150 WORDS
The two companies that did fraud activities that I focused on in this section are Goldman Sachs Company and WorldCom in the telecom world. The securities exchange commission, with fraud, charged Goldman Sachs because the company developed and marketed an artificial collateralized debt system. Paulson & Co had the same invested and at stake with in the equity of ABACUS as believed by ACA. In circumstance, they did not have a concern in the success. By October 24, 2007, the investors were defrauded by omitted facts or misstatements, which led to downgrading of 83% of the RMBS in the ABACUS portfolio and 17 percent, were on negative watch. (SEC Charges Goldman Sachs with Fraud concerning structuring and marketing of CDO Tied to Subprime Mortgages in 2010. Goldman established to pay $550 million in a settlement (Duggan, T. 2013). The vice president of Goldman was found liable for fraud too. The WorldCom scandal is another well-known unethical scandal. WorldCom submitted the largest bankruptcy filing in United States’ history after admitting improperly accounting for more than $3.8 billion dollars in expenses. The company used acquisitions to spurt large growth. Two of WorldCom’s acquisitions included MCI Communications and MFS Communications (UUNet). This caused WorldCom to appear more favorable on Wall Street, and many banks, brokers, and investors gave strong buy recommendations. This was not unethical; however, what investors and others were to uncover in the coming years, was, Chief Executive Officer Bernie Ebbers led the company’s stock to increase from pennies, to more than $60 per share.