Ethics in Finance Case Study
Bradley Miller
2/12/15
Seminar of Finance
Case Study
Ethics in Finance
1. Have I defined the problem correctly and accurately?
Answer: The problem was that the WorldCom Company was falling farther and farther into debt and they needed a way out of this hard time. The CEO came to us with a plan to turn the company or in reality to make it look as if the company was headed into the right direction, when in fact it was not. The plan was to use other accounts that have holding money in them for other various projects to make the revenue look as though it was high and still climbing.
2. If I stood on the other side of the problem, how would I define it?
Answer: I would define the situation as what it is, fraud. This company was at one time a leader in telecommunication and now it’s dwindling away. In the eyes of the investor, the company was flourishing until you look deep to find that the company was using the money of the investor in numerous ways. Looking at it from the point of view of the investor I would do it differently.
3. What are the origins of this dilemma?
Answer: The origins of the problem begins when WorldCom Inc. decided to start transferring money from other entities within the company to pay off its investment and in doing so makes it look on paper like the company is making a profit when in reality it drowning in its own investments.
This made investor want to buy into the company and make a profit but when they were caught everyone wanted the money they had invested. The internet bubble of the 2000’s was a big contributor of the WorldCom turmoil.
4. To whom and to what am I loyal, as a person and as a member of a firm?
Answer: As a person I am loyal to myself, family, God, and close friends, but as a member of the firm I am loyal to my boss but to an extent. I as a person have a moral code that I follow, which lets me cross from work to personal life but on the boundaries of knowing right from wrong. The payouts for the manager’s
2/12/15
Seminar of Finance
Case Study
Ethics in Finance
1. Have I defined the problem correctly and accurately?
Answer: The problem was that the WorldCom Company was falling farther and farther into debt and they needed a way out of this hard time. The CEO came to us with a plan to turn the company or in reality to make it look as if the company was headed into the right direction, when in fact it was not. The plan was to use other accounts that have holding money in them for other various projects to make the revenue look as though it was high and still climbing.
2. If I stood on the other side of the problem, how would I define it?
Answer: I would define the situation as what it is, fraud. This company was at one time a leader in telecommunication and now it’s dwindling away. In the eyes of the investor, the company was flourishing until you look deep to find that the company was using the money of the investor in numerous ways. Looking at it from the point of view of the investor I would do it differently.
3. What are the origins of this dilemma?
Answer: The origins of the problem begins when WorldCom Inc. decided to start transferring money from other entities within the company to pay off its investment and in doing so makes it look on paper like the company is making a profit when in reality it drowning in its own investments.
This made investor want to buy into the company and make a profit but when they were caught everyone wanted the money they had invested. The internet bubble of the 2000’s was a big contributor of the WorldCom turmoil.
4. To whom and to what am I loyal, as a person and as a member of a firm?
Answer: As a person I am loyal to myself, family, God, and close friends, but as a member of the firm I am loyal to my boss but to an extent. I as a person have a moral code that I follow, which lets me cross from work to personal life but on the boundaries of knowing right from wrong. The payouts for the manager’s