Rel228weektwo - REL 228/MGT 228 Business, Ethics, and...

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REL 228/MGT 228 Business, Ethics, and Society Prof. Douglas Lamont WEEK TWO: LECTURE/DISCUSSION Theme for the week: Theft of knowledge. The Talmud says a person can steal by taking advantage of information not available to others. The Hebrew expression is gnaivat daat , (pronounced g-ney-VAHT dah-AHT). Source : Rabbi Burton I. Visotzky, a professor of at the Jewish Theological Seminary in Manhattan. I. Retributive justice Does going to jail change the way businesses are run by executives? Going to jail is a wake up call, but it cannot on its own engender ethical behavior. Virtue develops from a habitual commitment to pursue the good. In the long run, do we have executive leaders up to the task? The convicted felons: Samuel D. Waksal : He is the founder and former chief executive of ImClone Systems . He was sentenced to 87 months in jail for securities fraud, conspiracy, perjury, and obstruction of justice. His sentence is the maximum recommended by the federal sentencing guidelines. Andrew and Lea Fastow : Andy is the former CFO of Enron, and Lea is the former assistant treasurer of Enron. He goes to jail for ten years; she for six months. The federal prosecutors said “There are limits, there are lines, there are boundaries, and now they’re clear and bright. And when you cross the, you risk a serious penalty.” Andy dreamed up a new way to make the numbers look good, and gave us this cynical value statement: “When Enron says it will rip your face off, it will rip your face off.” Martha Stewart : She has been convicted of lying to the FBI and officials of the Department of Justice, conspiracy, and obstructing justice. Her crime is a theft of knowledge as defined by the Talmud. She was more interested in appearing ethical than in actually acting that way. She will appeal her conviction. Her sentencing date is in June and can be postponed until her appeals are heard by the Federal Appeals Court. More defendants: Richard Scrushy : Former CEO of Health South goes on trial in June for overstating earnings. 1
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Bernard J. Ebbers : Former chairman and CEO of WorldCom has been charged with accounting fraud, securities fraud, conspiracy, and making false filings to regulators. Significant ratcheting up: Paul M. Daugerdas, in the Chicago office of the law firm, Jenkins & Gilchrist, sold what the government says were abusive tax shelters; the firm participated in fraud and should not be allowed to hide the identities of its tax-shelter clients from the Internal Revenue Service. Currently, lawyers have a crime-fraud exemption to the attorney-client privilege, and this has been applied to lawyers who represent organized crime families and drug rings suspected of racketeering. It has not been applied to tax lawyers who are suspected of civil and criminal tax fraud. Richard W. Painter, a University of Illinois law professor, says “this should not be mistaken as business as usual by the government, but as a sign of determination to identify tax law violators.” Jenkins & Gilchrist and its
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This note was uploaded on 01/05/2012 for the course REL MGT 228 taught by Professor Douglaslamont during the Fall '11 term at DePaul.

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Rel228weektwo - REL 228/MGT 228 Business, Ethics, and...

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