edf40wrjww2CF_PaperMaster:Desc
TUI University
Rebecca P. Martin
Module 1 Assignment
ETH 501
Business Ethics
Dr. Steven Gold
April 19, 2008
INTRODUCTION
The question of sentencing corporate executives such as Bernard Ebbers, to prison after they are found to be guilty of fraud is an issue crossing the boundaries of ethics and legal opinions. Scandals involving corporate Chief Executive Officers (CEO’s), Chief Financial Officers (CFO’s) and the violation of laws governing financial operations have recently been displayed on the front pages of magazines, newspapers and journals. Lying, stealing, cheating, and having no remorse for the consequences of their actions are the basis of prosecution claims in federal cases.
The Federal Bureau of Investigation (FBI) defines white collar crime as “…those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence. Individuals and organizations commit these acts to obtain money, property, or services; to avoid the payment or loss of money or services; or to secure personal or business advantage.” (United States Department of Justice [USDOJ], 1989) Ebbers was prosecuted by the Securities and Exchange Commission (SEC) for engaging in a fraudulent scheme to conceal WorldCom’s poor financial performance. The scheme resulted in the overstatement of WorldCom’s profit. When the fraud was discovered, the stock value plummeted and huge losses were realized by shareholders. Among the violations listed in the complaint document were anti-fraud, books and records, internal controls provisions of the fede ...