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Unformatted text preview: Corporate Scandals 2007 Paxil Lawsuit GlaxoSmithKline promoted Paxil for prescription to children/ adolescents while withholding material information about the medication's safety for minors. More than 2 million prescriptions for youth in US in one year In youth, causes addiction and increased suicide 2005 Vioxx Lawsuit up to 139,000 in US suffer heart attacks or stroke as result of taking the arthritis drug Vioxx Up to 55,000 of these died The company knew about the heart risks since 2000 but did not disclose them 19952003 McWane Inc. Alabamabased sewer and water pipe manufacturer. 4,600 injuries over 8 years among the company's 5,000 employees. Hid defective equipment from inspectors Nine deaths including being crushed to death and an explosion Labor Relations WalMart Represents 2% of US GDP Blocked union organizing efforts extracted offtheclock work paid employees less than supermarket rate provided inadequate and unaffordable healthcare packages for employees. Women paid less, promoted less Sweatshops:WalMart Largest importer of Chinese goods10% total WalMart ran "Buy American" marketing campaigns all the while reinvesting its all American dollars overseas. Abuses in Walmart foreign factories include: forced overtime, locked bathrooms, starvation wages, denied access to health care, workers fired and blacklisted if they try to defend their rights http://www.youtube.com/watch?v=bsOn43bjsdY Corporate scandals are not new
1980's History Ivan Boesky Michael Milken Insider Trading on Wall Street $100 million 3 years Securities Fraud, Insider trading 10 years
Investors lost $200 million Charles Keating Savings & Loans fraud 80s February 2000: Fortune Magazine #1 Quality of Management #2 Employee Talent February 2000 Fortune magazine chooses Enron as it's "Best Managed and Most Innovative company" Enron Source: Enron Corporation Press Release Enron August 2000: Stock at $73 billion March 2001: FY2000 revenues at $100 billion October 16, 2001 $618 million 3rd Qtr Loss $1.2 billion reduction in shareholder equity October 31, 2001 SEC upgrades inquiry into a formal investigation December 2001: Enron bankrupt; 4,000 fired, 20,000 workers lose jobs $73 billion in stock value gone Recent Scandals Enron What Happened?
"Enron apparently, with the approval or advice of its accountants, auditors and lawyers, used thousands of offthebook entities to overstate corporate profits, understate corporate debts, and inflate Enron's stock price."
Source: Corporate and Criminal Fraud and Accountability Act of 2002 Enron Wasn't Just Enron
"Among other states' pensions affected by Enron's bankruptcy were California's Public Employees' Retirement System, which lost $195 million, and the Ohio Public Employees Retirement System and State Teachers Retirement System, which lost about $127 million."
Source: Texas Retirement System Slight Loss From Enron Investments Reaction Recent Scandals WorldCom: 2002 $3.9 billion in expenses hidden 17,000 jobs lost $3.3 billion in accounting irregularities Company applied for bankruptcy Market value of $100 billion Recent Scandals Tyco Tax evasion Evidence tampering 1500 jobs lost Additional 4,500 laid off Down $86 billion in one year from peak share price Recent Scandals Global Crossing Ghost transactions (inflated earnings) 2000 jobs lost Down $40 billion in a few months Adelphia Questionable loans Hid $2.3 billion in off balance sheet debt Loss of $6.5 billion in market value in one year Company in bankruptcy Founders sentenced to 1520 years jail 2007 Martha Stewart Homemaker diva sentenced to 5 months in prison, 2 years probation Stewarts stock broker ordered his assistant to tell Stewart that the CEO of ImClone Systems was selling all his company stock ahead of the Food and Drug Administration's rejection of the firm's new cancer drug, causing the stock price to plunge. Stewart sold nearly 4,000 shares, Cruelty to Animals http://www.youtube.com/watch?v= http://www.youtube.com/watch?v=THGD 55WGdU http://www.youtube.com/watch? v=kmYJ87cnolg Food you feel good about? "Wegmans follows industry standards based on science. " the standards permit a variety of cruel practices, including painful surgical mutilations without anesthesia, starvation of hens for up to two weeks (to force their bodies into an egglaying cycle) and intensive, unending confinement "Wegmans isn't breaking the law" no federal laws governing the welfare of egg no federal laws governing the welfare of egg laying hens. Unlike pets, farm animals are excluded from the Animal Welfare Act and the Humane Methods of Slaughter Act. "The cruelty shown in that video isn't from Wegmans Egg Farm." The producers of the documentary The producers of the documentary Wegmans Cruelty brought a Global Positioning System (GPS) receiver with them to the farm. GPS uses timing signals from military satellites to determine location to an accuracy of two meters. ...
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- Fall '08