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CORPORATE CRIME ON THE RISE - Coggle Diagram
CORPORATE CRIME ON THE RISE
REASON
SURVEY
54 countries (1999-2009)
A sharp rise
5000 companies
43% in Fraud
financial services (56%)
Banks
investment companies
Purpose
meet shareholders earnings expectation
hide financial problems
Increase earnings
ACCOUTING FRAUD (ENRON scandal)
2000
The world's largest energy trader
40 countries - 21000ppl
sales : $100B
Dec 2001
Went Bankgrupt
? "Get rich quick"
Bad investments
borrowed billions to cover looses
Action
Accountants
Hide looses
exaggerate profits
Executives
Deny problems
collect money from sales of stock
Results
UNable to pay debts
Collapsed
Executives
Arrested
Charged with
Fraud
other coporate crimes
Investors
lost money
employees
lost jobs
retirements savings
Bernie Madoff's Ponzi Scheme(Biggest cases of Fraud)
PPL invested money
Madoff running Ponzi scheme
investors were paid from their money/other investors
Madoff was caught
took $65B
2009 sentenced to 150yrs in prison
Mortgage fraud at American Banks
Financial crisis in 2008-White collar crime in Bank Industry
Bank fails -> mortgage fraud
loan officers lied on loan paper work (borrow's incomes and assets)
give loans that they weren't able to repay
=>Paid bonuses for signing loans
Fraud wasn't limited
involved top-level executives
Conclusion
Wrong-doing
call for greater accountability
Leaders
be responsible
stop dangerous increase in corruption