DSST Business Ethics and Society 2

A at its peak it generated 90 of profits from trading

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a) At its peak it generated 90% of profits from trading b) Arthur Andersen was indicted for Enron 8) Kenneth Lay – CEO for most of the company’s 15 yr existence a) Kenneth Lay was convicted on 10 criminal charges including fraud and conspiracy – he died before sentencing 9) WorldCom – biggest bankruptcy in history in 2002 a) Audit revealed $3.8 billion in fraud b) Revenues had been inflated and costs underreported c) Arthur Anderson had audited the company’s 2001 financial statements and reviewed their books for the 1 st quarter of 2002 10) Arthur Andersen Accounting Firm – audited WorldCom and Enron a) Found guilty of criminal charges relating to its Enron audit b) Prior to receiving notice of investigation from the SEC – 2 tons of documents were shredded b.i)In 2002 Arthur Anderson was found guilty of obstruction of justice b.ii) In 2005. The Supreme Court overturned the guilty verdict c) Arthur Andersen performed paid consulting work for the same companies he was responsible to audit c.i) Clear conflict of interest c.ii) WorldCom, Global Crossing, Enron (all paid Arthur Anderson as consultant) 11) Blood Diamond – blood diamonds are produced by slave labor are also known as Conflict Diamonds a) The term “blood diamond “ is associated with the Kimberley Process b) Diamonds are often used by rebel groups to fund terrorists activities 12) Kimberly Process Certification Scheme of 2002 – aims to identify and eliminate the trade of conflict diamonds
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a) A way for consumers and producers to ensure that they do not trade diamonds that indirectly fund wars in Sierra Leone or the Democratic Republic of Congo 13) Dukes vs. Wal-mart – filed in 2001 a) 7 women claimed that Wal-Mart discriminated against women concerning pay and promotions b) Largest civil rights lawsuit in America c) Represented 1.5 million female employees 14) Texaco – In 1996 - paid over $170 million to settle a lawsuit accusing the company of racial discrimination against black employees a) In 1996, largest lawsuit involving racial discrimination at the time 15) Home Depot – In 2004 paid $5.5 million after being accused by a female and minority employees discrimination involving pay and promotions at its stores in Colorado a) Home Depot denied charges but agreed to pay to avoid lengthy and expensive lawsuit 16) Coca-Cola in 2000 – agreed to pay $192.5 million to settle a racial discrimination suit by minority workers a) Workers claimed that salaried black employees were discriminated against in evaluations, promotions and pay b) Coca-cola denied claims c) Settlement covered salaried black employees in the US who worked for Coca-cola between April 1995-June 2000 17) Mitsubishi in 2004, admitted to covering up vehicle defects going back as far as 1977 a) Revealed in 2000, after some fatalities occurred involving Mitsubishi vehicles b) Over 1 million vehicles were recalled c) One of the largest corporate scandals in Japanese History 18) Martha Stewart – in 2004 – was sentenced to 5 months in prison after being convicted of obstruction of justice, lying about a
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a At its peak it generated 90 of profits from trading b...

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