Analyzing Ethical Behavior 1

Only available on StudyMode
  • Download(s) : 120
  • Published : March 27, 2011
Open Document
Text Preview
Running head: ANALYZING ETHICAL BEHAVIOR

Analyzing Ethical Behavior

Grand Canyon University

BUS 340
Dr. Sara Rogers
March 20, 2011

Analyzing Ethical Behavior

Bernard Madoff, founder of Bernard L. Madoff Investment Securities, and former chairman of NASDAQ, admitted to defrauding investors out of billions of dollars. He was able to trick investors, auditors, and the Securities and Exchange Commission (SEC) for many years. He persuaded investors by telling them he is a “very successful financial advisor” (Bernard L. Madoff Investment Securities, 2010). The stakeholder’s theory fits Madoff due to his taking from one investor to pay another. The sunk cost fallacy describes Madoff’s view of social responsibility towards his stakeholders. Enron was a “model of corporate social responsibility” (Mercer Law Review, 2011). Enron’s executive officers were involved in community activities and held benefits to help charities (Mercer Law Review, 2011). The utilitarianism theory fits Enron, because they helped their community. Begging the question concept fits Enron, due the fact they lied about how financially successful they are (Mercer Law Review, 2011). Madoff’s and Enron’s accounting improprieties was one reason the Sarbanes- Oxley Act of 2002 was created. This act increases fines and penalties for corporate wrongdoers (Mallor, et all, 2010, p.74). Bernard Madoff, founder of Bernard L. Madoff Investment Securities, and former chairman of NASDAQ, was able to defraud his investors out of $65 billion by making them believe he is a successful financial advisor. He convinced his investors to give large amounts of money in return he would give them between eight and twelve percent return a year (Bernard L. Madoff Investment Securities, 2010). Instead of investing their money in the securities market; he deposited it in a Chase Manhattan Bank account. He paid redemption requests with the money from his Chase Manhattan account. He also brought in new...
tracking img