Sunbeam corporation was involved in a fraudulent case

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Sunbeam Corporation was involved in a fraudulent case against its top executives for try to inflate its numbers for year 1997. Albert J. Dunlap was an executive at Sunbeam and he was accused falsifying the financial statements so the Sunbeam looked more profitable. When Mr. Dunlap joined Sunbeam in 1996 the stock was trading at $12.50. When the announcement of his hiring was made public stock price shot up by 50% that day. In 1997, the S.E.C. said, Sunbeam recorded some sales that were not real, through a variety of methods, and recorded other sales that came from ''channel stuffing,'' putting inventory onto the books of distributors and retailers. In one case one electric blanket that had been packaged for a one retailer were sent to a distributor who agreed, in return for a guaranteed profit, to hold the blankets until the retailer was ready to accept them. Other sales were made by offering deep discounts to persuade customers to buy merchandise that they would not need for many months. Mr. Harlow, who was an auditor for Arthur Anderson, found the fraudulent transactions and contacted the management of Sunbeam to change its financial statements. The top management refused to make most of the changes and convinced the auditors to certify the statements. The rest of the fraudulent activity was argued by management as being not materiel because it only made up 16 percent of Sunbeams 1997 profits. In early 1998 the stock was at an all time high at $52, but it fell when Sunbeam reported a first quarter lost for 1998. Reports came out that Sunbeam had a negative cash flow in 1997 and its profits for the year were just fraudulent accounting practices. Ultimately Sunbeam filed for bankruptcy and it valuation was at $1 billion but it owned more than $1.6 billion to different banks so stockholders in the company would get nothing. Sunbeam is still in business today as a subsidiary of Jarden Corporation and it is growing it consumer electronic business since emerging for bankruptcy in 2004.
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http://www.nytimes.com/2001/05/16/business/sec-accuses-former-sunbeam-official-of-fraud.html? pagewanted=all&src=pm
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