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Nevertheless such mandatory disclosures presume that people can and will cognitively appraise such disclosures as against to higher noise trading. In the light of realities of emotional regulating, the SEC in general and its compulsory disclosure regime is particular might perform more harm than good and yet stay because of the emotional appeal rationales and considerations. (Parisi; Smith, 2005)
The history of U.S. federal securities regulation from the very beginning following the Great Depression to the most recent Sarbanes-Oxley Act of 2002 in the wake of Enron, Arthur Anderson, iet Aid, Worldcom, Tyco, Merk and Global Crossing is that of neglect of Securities Market interrupted by legislation in response to political and public pressure arising from highly primitive and public episodes of banking, corporate or securities fraud and scandals. Mandatory disclosures might be at best an impotent and at worst a socially harmful regulatory policy if the majority of investors…
N.A. (n. d.) "United States Securities and Exchange Commission Strategic Plan 2004-09:
Government Actions" Retrieved 30 March, 2009 from http://www.sec.gov /about/secstratplan0409.pdf
Parisi, Francesco; Smith, Vernon L. (2005) "The law and the economics of irrational behavior" Stanford University Press.
Securities and Exchange Commission, United States Securities and Exchange Commission,
The Securities and Exchange Commission (SEC) has a large responsibility for ensuring that the country's vital economic needs are protected. The purpose of this essay is to discuss a real world and practical application of the SEC's involvement in a case where accounting malfeasance was suspected and ultimately proven true in a court of law. This essay will examine the case of International Commercial Television Inc. (ICTV) and its accounting blunder that cost the accounting firm of Dohan & Company its repuatation and penalties.
According to the official SEC complaint, violation of Section 21(d) of the Securities exchange act was committed by ICTV's submission of their accounting statements. "These proceedings arise out of espondents' improper professional conduct during their audit of International Commercial Television, Inc.'s ("ICTV") 2007 financial statements. During fiscal year 2007, ICTV improperly recognized revenue and incorrectly recorded product returns, resulting in a material overstatement of…
The United States Securities and Exchange Commission. Administrative Proceeding 3-997, 20 Jan 2007. Retrieved from http://www.sec.gov /litigation/admin/2011/34-63740.pdf
hat issues does the secondary market face when it comes to IPOs?
The Economic Times (TET) in India explains that when a company issues securities to the public for the initial time, it is offered in the primary market. However, once the IPO (initial public offering) has been offered, and the stock can be listed in the market, those securities are then traded in the secondary market (TET). The main difference between the two markets is that when an investor puts down money for securities in the primary market, that investor deals directly with the company offering the IPO. But once the securities are in the secondary market, the investor buys them from "other investors willing to sell…" (TET).
hat can go wrong -- how can fraud occur in secondary markets?
In Forbes, contributor J.J. Colao offers an example of what can go wrong or awry with secondary…
Colao, J.J. (2012). 'An Abomination That Should Stop': What's The Problem With
Secondary Markets? Forbes. Retrieved July 25, 2015, from http://www.forbes.com .
The Economic Times. (2010). Definition of 'Secondary Market.' Retrieved July 25, 2015,
from http://economictimes.indiatimes.com .
The U.S. Supreme Court then granted a writ of certiorari to determine the meaning of the language "in connection with the purchase or sale of any security" (Reed, O. Shedd, P. Morehead, J. & Pagnattaro, M. 2008).
What argument did the security dealer make in seeking to have the civil complaint dismissed?
andford's defense in this matter was particularly interesting as he does not deny his involvement in the "simple theft of cash or securities in an investment account" (Reed, O. Shedd, P. Morehead, J. & Pagnattaro, M. 2008). For andford the issue is not that he sold the securities which he contends "were perfectly lawful," rather that the fraudulent activity of "misappropriation of the proceeds is desultory from the actual sale of the securities. If andford's argument is believable then the sales of securities would have been aligned with the investment strategy designed to secure principal and generate income.…
Zandford's defense in this matter was particularly interesting as he does not deny his involvement in the "simple theft of cash or securities in an investment account" (Reed, O. Shedd, P. Morehead, J. & Pagnattaro, M. 2008). For Zandford the issue is not that he sold the securities which he contends "were perfectly lawful," rather that the fraudulent activity of "misappropriation of the proceeds is desultory from the actual sale of the securities. If Zandford's argument is believable then the sales of securities would have been aligned with the investment strategy designed to secure principal and generate income. Zandford's contention falls squarely on the premise that the securities transactions were legitimate sales and not concomitant with intent to defraud.
What does the Supreme Court Conclude with respect to the language "in connection with the purchase or sale of any security?
The question of "in connection with the purchase or sale of any security" invariably falls to the Court's interpretation of the circumstance surrounding the Zandford transactions. The Court rejects Zandford's argument that the sales and the transfers of funds from Wood's account to Zandford's were separate and disconnected. Zandford's argument falls apart because the sales "throughout the two-year period" (Reed, O. Shedd, P. Morehead, J. & Pagnattaro, M. 2008) reflect a deliberate and concerted effort to "convert the proceeds of the sales of the Woods securities to his
This could have been interpreted as the company having an orientation more towards money-making than to the development of strong ethics.
Leadership, or lack thereof, made a strong contribution to the Tyco failure. The company's leaders set the cultural tone of the firm, but they were also among the primary actors engaged in the fraud. Kozlowski and the other executives were front and center in the fraud, and committed many of the egregious acts themselves. There is little doubt that the Tyco failure had more to do with the caliber of the company's leadership that with any issues surrounding the employees themselves. For the most part, the structure and the leadership were the reasons for the Tyco failure.
Management was less complicit. Although the managers were influenced by the culture passed down by Tyco's leaders, they were less directly involved in the fraud. Perhaps for this reason, the firm was…
No author. (2003). Securities Exchange Commission v. Tyco International Ltd. Securities Exchange Commission. Retrieved January 31, 2010 from http://www.sec.gov /litigation/complaints/2006/comp19657.pdf
Hellriegel, D. & Slocum, J. (2007).
Organizational Behavior. Mason, OH: Thomson Higher Education.
Kemmerer, C. & Shawyer, T. (2007). Tyco: A top-down approach to ethical failure. Working Paper Series.
"Yet earnings estimates have acquired a life of their own and often generate more attention from the media and analysts than a company's actual financial results." (Whalen, 2003).
More conservative critics of analyst conflicts rules believe that they are a step in the right direction, but view them as a work in progress. For example, the Sarbanes-Oxley bill, which mandated many improvements in corporate managers' financial practices, did nothing to reduce the unethical practice by many managers of communicating only with those analysts who cooperate with management's forecasts of the future (oni and Womack). This and other rules need strengthening.
Wall Street Journal reported in April 2003 that the brokerage firms of the top investment banks are still more likely to give optimistic research recommendations to their own banking clients, calling to question if new disclosure rules reapply protect investor clients (oni and Womack). With all the hoopla to protect…
60 Minutes - the sheriff of Wall Street (2002, October 6). Retrieved January 11, 2005 from James Hoyer Web site: http://www.jameshoyer.com/news_cbs_merrill_lynch.html
Boni, L. And Womack, K.L., Wall Street research: will new rules change its usefulness? Retrieved January 11, 2005 from The University of New Mexico Web site: http://18.104.22.168/search?q=cache:Vops0e1attQJ:www.unm.edu/~boni/FAJ_MayJune2003.doc+%22NASD+and+NYSE+rules%22+and+%22conflict+of+interest%22+and+%22not+enough%22& hl=en
Fleischman, D. (2003, March 6). Outline of new research analyst conflicts of interest rules. Retrieved January 11, 2005 from Security Industries Association Web site: http://22.214.171.124/search?q=cache:ETmwyiBBHrMJ:www.sia.com/ResearchManagement/pdf/ResearchOutline.pdf+%22NASD+Rule+2711%22& hl=en
Rayburn, K. (2004, Winter). Insecure securities. Impact. Retrieved January 11, 2005 from University of Louisville Web site: http://php.louisville.edu/advancement/pub/impact/winter2004/insecure.php
Though not empowered with the same legislative authority that the SEC can claim, FINA sets standards for stockbrokers and other financial industry professionals, and licenses individuals as well as oversees certain aspects of operations with regulatory eye (Little 2010; FINA 2010). Illegal trading or suspicious trading can lead to investigations by FINA that can then lead directly to legal problems for companies found to be in violation of laws and ethics guidelines, meaning that the securities issued by Holiday Inn could eventually face direct regulation by this body, and that the trading of Holiday Inn securities -- like other securities traded in the United States -- is always at least indirectly influenced by the standards and regulations established by FINA (Little 2010; FINA 2010).
Holiday Inn does not issue securities that are markedly different from any other company, and thus the stock this company issues are subject to no more…
FINRA. (2010). Financial industry regulatory authority official website. Accessed 10 August 2010. http://stocks.about.com/od/tradingbasics/a/Regulat011705.htm
IHG. (2010). Investor relations. Accessed 10 August 2010. http://www.ihgplc.com/index.asp?pageid=3
Little, K. (2010). "Who's watching your back in the stock market?" Accessed 10 August 2010.
(Dow Jones and Company, 2009). The DJIA can be used in three principal ways: as a yardstick, as a barometer, or as an investment.
When the DJIA is used as a yardstick, the goal is to measure performance from one period of time to another:
The most common use of an index by investors is to evaluate the performance of their own portfolios on a monthly or quarterly basis. This is the "benchmark" function of an index, and it constitutes the bogey that many investors try to beat with individual stock picks or with mutual funds. There is no official benchmark for the stock market. Each investor chooses his or her own. The only logical requirement is that the benchmark chosen should represent the part of the stock market that is targeted by the investor's portfolio. For example, if the investor dabbles in large stocks from a variety of industries,…
H.J. Heinz Co. 2009. Shareholder Information. H.J. Heinz Company. Available from:
http://heinz.com/our-company/investor-relations/shareholder-information.aspx [August 28, 2009].
Dow Jones and Company. 2009. About the Averages: Overview. New York: Dow Jones and Company. Available from: http://www.djaverages.com/?view=about&page=overview [August 28, 2009].
E*Trade Financial Corp. 2009. Pricing. E*Trade Financial Corp. Available from:
The management of large organizations is a very crucial issue, whether they are government-related or not (Argyris, 1993; Argyris & Schon, 1978; Broom, Jackson, Harris, & Vogelsang-Coombs, n.d.; Brown & Brudney, 2003; Hatry, 1999; Haynes, 1999). Often, however, the government does not seem to realize that it must manage itself in the same way that a business would in certain aspects if it is to succeed and therefore it does not market itself to the public.
The spending that has been involved with the Department of Homeland Security is also crucial, because it has changed over time to reflect the needs and the realization of what it takes to make the Department work (Eggen & Mintz, 2003). This spending is important to discuss, because it indicates how much of the government's money - and by extension how much of the tax dollars of Americans - is going toward funding this…
Argyris, C., (1993). Knowledge for action: A guide to overcoming barriers to organizational change. San Francisco: Jossey-Bass.
Argyris, C. & Schon, D.A. (1978). Organizational learning, a theory of action perspective. Boston, MA: Addison-Wesley.
Broom, C., Jackson, M., Harris, J., & Vogelsang-Coombs, V. (n.d.). Performance measurement: Concepts and techniques (3rd ed.), workbook. Washington, DC: American Society for Public administration.
Brown, M.M., & Brudney, J.L. (2003). Learning organizations in the public sector? A study of police agencies employing information and technology to advance knowledge. Public Administration Review. 63(1), 30-43.
In these exceptions, which may be a one-time transfer of funds from a 401k to an IA or to a mutual fund, the financial services firms need to create ethical safeguards to ensure the confidentiality and actual funds themselves are secure. The bottom line is that the financial services firms need to create a highly secure, customized and tightly integrated series of web-based online trading applications and tools to make sure individual investors can work to attain their investment goals.
Improvements for Online Trading as a Self-Service Strategy
There are many opportunities for improvement for Web-based online trading tools, starting with even stronger security specifically on the area of inter-fund transfers and the recording of transactions. Today many of these Web-based online applications store history only for 12 months, and do not provide an audit record back three or five years of all in-account transactions. This lack of multi-year audit…
AMR Research (2003) - Configuration is the Heart of Customer Fulfillment for Complex Product Manufacturers. AMR Research Report. Monday March 31, 2003. Retrieved from the Internet on April 19, 2007 at http://lwcresearch.com/filesfordownloads/ConfigurationIstheHeartofCustomerFulfillmentforComplexProductManufacturers.pdf
Columbus (2001) - Defining Your Direction in Guided Selling. AMR Research Report. October, 2001. Retrieved from the Internet on April 19, 2007:
Columbus (2002) - the Sell-Side E-Commerce Market: It's All About Integration. AMR Research Report. Monday April 1, 2002. Retrieved from the Internet on April 19, 2007:
How has the Securities and Exchange Commission (SEC) improved reporting measures for publicly held companies? What are the weaknesses in SEC procedures?
The SEC has amended its reporting requirements in order to eliminate, modify, or integrate certain disclosure rules. These changes are aimed at improving disclosure effectiveness. Simplifying compliance without the need for significantly altering the total mix of information that is provided to the investors. Improving this reporting measures will allow public companies to eliminate redundant and duplicative requirements that forced the companies to publish or report the same information in different manners. Eliminating duplicate reporting requirements will make it easy for public companies to provide information to investors and investors will find it easy to retrieve information. The SEC also aimed at eliminating outdated requirements that are not consistent with recent legislation.
While the reporting measures are aimed at improving reporting for public companies, it is feared that…
This researcher rejects the existence of online communities because computer mediated group discussions cannot possibly meet this definition. Weinreich's view is that anyone with even a basic knowledge of sociology understands that information exchange in no way constitutes a community.
For a cyber-place with an associated computer mediated group to be labeled as a virtual settlement it is necessary for it to meet a minimum set of conditions. These are: (1) a minimum level of interactivity; (2) a variety of communicators; (3) a minimum level of sustained membership; and (4) a virtual common-public-space where a significant portion of interactive computer mediated groups occur (Weinreich, 1997). The notion of interactivity will be shown to be central to virtual settlements. Further, it will be shown that virtual settlements can be defined as a cyber-place that is symbolically delineated by topic of interest and within which a significant proportion of interrelated interactive computer…
Al-Saggaf, Y. & Williamson, K. Online Communities in Saudi Arabia: Evaluating the Impact on Culture Through Online Semi-Structured Interviews. Volume 5,
No. 3, Art. 24 - September 2004
AnchorDesk Staff. (2000). Sign of Trouble: The Problem with E-Signatures.
Retrieved April 9, 2005, from ZDNet AnchorDesk Web site: http://reivews- zdnet.com.com/AnchorDesk/4630-6033_4204767.html?tag=print
" (Harman, Flite, and ond, 2012) the key to the preservation of confidentiality is "making sure that only authorized individuals have access to that information. The process of controlling access -- limiting who can see what -- begins with authorizing users." (Harman, Flite, and ond, 2012) Employers are held accountable under the HIPAA Privacy and Security Rules for their employee's actions. The federal agency that holds responsibility for the development of information security guidelines is the National Institute of Standards and Technology (NIST). NIST further defines information security as "the preservation of data confidentiality, integrity, availability" stated to be commonly referred to as "the CIA triad." (Harman, Flite, and ond, 2012)
III. Risk Reduction Strategies
Strategies for addressing barriers and overcoming these barriers are inclusive of keeping clear communication at all organizational levels throughout the process and acknowledging the impact of the organization's culture as well as capitalizing on all…
Harman, LB, Flite, CA, and Bond, K. (2012) Electronic Health Records: Privacy, Confidentiality, and Security. State of the Art and Science. Virtual Mentor. Sept. 2012, Vol. 14 No. 9. Retrieved from: http://virtualmentor.ama-assn.org/2012/09/stas1-1209.html
Kopala, B. And Mitchell, ME (2011) Use of Digital health Records Raises Ethical Concerns. JONA's Healthcare Law, Ethics, and Regulation. Jul/Sep 2011. Lippincott's Nursing Center. Retrieved from: http://www.nursingcenter.com/lnc/cearticle?tid=1238212#P77 P85 P86 P87
Securities and Exchange Commission (SEC) are one of the most well-known entities that regulate markets, protect investors and facilitate the capital market structure. The SEC was founded in 1934 in the wake of the Great Depression -- The SEC was created by section 4 of the Securities Exchange Act of 1934. The SEC was established by the United
States Congress as an independent, quasi-judicial regulatory agency during the Great
Depression that followed the Crash of 1929. Now, more than ever, first time investors turn to the market to protect their future income, send their children to college, pay for homes. The primary duty of the SEC is to promote sound market regulation, sustain economic growth and encourage capital formation.
The Capital Market strategy is one of many used by this entity. It is a market for securities (debt or equity), where business enterprises and governments can raise their long-term funds.…
S.E.C. (1982). "The Role on the Capital Market in the Structural Adjustment Programme (SAP)," Lagos, SEC Quarterly June, Vol 4, No 2.
Sanusi, J.O (1984). The Capital Market: A Boost to Economic development (The banking Aspect)" Seminar Paper on the Capital Market, Lagos.
Matthew Shane., 1970. Capital Markets and the Process of Economic Growth, 77 i.e. Journal of Finance, Voi. 25, No. 4. (Sep., 1970), pp. 950-951.
Strict Liability & Securities Law
Congress defined security laws to include investment contracts, but "investment contract" is not itself defined in law (Condomimiums as Investment Contracts under the Security Laws, 2011). An Eleventh Circuit court decision indicated "The test for an investment contract is whether the contract is (1) an investment of money (2) in a common enterprise (3) made with expectation of profits to be derived solely from efforts of others" (Condomimiums as Investment Contracts under the Security Laws, 2011). ecause law is lacking in adequate definitions, it is completely possible for a business owner to operate a business without fully understanding the laws that govern the individual practices.
The Trust Indenture Act of 1939 applies to debt securities such as bonds, debentures, and notes offered for public sale (The Laws That Govern the Securities Industry). The Securities Acts of 1933 and 1934 govern the disclosure of financial information…
White Collar Crime. (2008). Retrieved from Encyclopedia.com: http://encyclopedia.com/topic/white-collar_crime.aspx
Condomimiums as Investment Contracts under the Security Laws. (2011). Loyala's Institute for Investor Protection Major Appelate Court Decisions, 1(12),October.
Securities Fraud. (n.d.). Retrieved from Legal Information Institute: http://www.law.cornell.edu/wex/securities_fraud
The Laws That Govern the Securities Industry. (n.d.). Retrieved from Security Exchange Commission: http://www.sec.gov b/about/laws.shtml
Securities and Exchange Commission (SEC)
Accounting Irregularities and Missing Internal Controls in the LIBOR Currency Manipulation Scandal
The London Interbank Offered Rate, or Libor for short, was the recent subject of collusion between some the world's largest banks to manipulate the exchange rates; no one seems to know for sure when these banks began to manipulate the exchange rate, but some reports show these activities beginning in 2003, or possibly much earlier (McBride, Alessi, & Sergie, 2015). The Libor rate represents a benchmark interest rate in which banks lend to each other in London interbank market. The exchange rate is calculated daily and determined by a submission of eleven and eighteen banks who submit their average borrowing rates for the day.
The Libor rate was considered to be a fairly reliable benchmark for determining an amount of interest that was used in determining short-term transactions and this rate had indirect…
Debevoise & Plimpton. (2015, May 20). United States of America v. UBS AG. Retrieved from SEC: https://www.sec.gov/divisions/corpfin/cf-noaction/2015/ubs-ag-052015-506d.pdf
McBride, J., Alessi, C., & Sergie, M. (2015, May 21). Understanding the LIbor Scandal. Retrieved from Council on Foreign Relations: http://www.cfr.org/united-kingdom/understanding-libor-scandal/p28729
McKenna, F. (2012, July 6). Where Was Auditor PwC When Its Client Barclays Gamed Libor? Retrieved from American Banker: http://www.americanbanker.com/bankthink/where-was-pwc-when-barclays-gamed-libor-1050689-1.html
SEC. (2015, October 13). UBS to Pay $19.5 Million Settlement Involving Notes Linked to Currency Index. Retrieved from SEC: https://www.sec.gov/news/pressrelease/2015-238.html
Institutional investors are finding XBRL to be valuable from the standpoint of creating taxonomies that give them greater insights into the performance of the firms they hold significant stock share positions in. In addition, investment analysts with leading Wall Street firms are using XBRL as a means to define entirely new and more detailed analysis of financial statements and key ratios as well. Given the fact that XBRL treats financial information as a referenced by an XML-compatible tag, each financial ratio, item on a financial statement and significant event as defined by the Sarbanes-Oxley (SOX) Act are all tagged. This significantly improves reporting timeliness and has led to the SEC stating that the future of financial reporting will be in real-time (Tribunella, Tribunella, 71).
The Connection between XBRL and Real-Time Reporting
With XBRL, the ability of corporations to report in real-time becomes possible. No longer are corporations limited in the…
Despite its clear benefits and advantages in terms of ease of use and cost effectiveness, there are certain risks associated with wireless networking. These risks are discussed further below.
Review of the Literature.
Security Risks Associated with IEEE WLAN 802.11. The applications for wireless communication technology continue to develop and expand; today, at least, the 802.11b is the standard of choice for wireless router communication used with network installation (Gonazles & Higby 2003). "The integrity of the transmitted data is a valid 2.4 GHz. At this wavelength medium, the propagation of wavelength maintains strong connectivity" (Gonzales & Higby 2003, p. 30). The technology of WLANs actually dates back to the mid-1980s; during this period, the Federal Communications Commission (FCC) freed up radio frequency (rf) to the industry. "Initially, this was viewed as a broadcast reception procedure and very little thought went to broadcast transmission" (Gonzales & Higby 2003, p. 30).…
Alexander, Steve. 2004. Computers and Information Systems. In Encyclopedia Britannica Book of the Year [premium service].
Anderson, Robert H., Tora K. Bikson, Richard O. Hundley & C. Richard Neu. 2003. The Global Course of the Information Revolution: Recurring Themes and Regional Variations. Santa Monica, CA: Rand.
Bliss, R. Marion. September 5, 2003. Homeowners Connect to Wireless Fidelity. The Washington Times, p. F29.
Brookshear, J.G. 2000. Computer Science: An Overview. Reading, Mass: Addison-Wesley.
Health-Care Data at Euclid Hospital Security and Control: A White Paper
Protecting Health-Care Data
The efficiency of the modern healthcare system is increasingly becoming reliant on a computerized infrastructure. Open distributed information systems have been initiated to bring professionals together on a common platform throughout the world. It needs to be understood that easy and flexible methods of processing and communication of images; sound and texts will help in visualizing and thereby cure illnesses and diseases effectively. Another aspect is that the easy access and usage can risk patient privacy, accountability, and secrecy associated with the healthcare profession. Therefore, Information Technology -- IT must be able to focus mainly on improving the health of the patient and should not put the patient's health in danger. (IO Press)
This implies that right data has to be made available to the right person at the right time. IT strongly affects the confidentiality…
A WWW implementation of National Recommendations for Protecting Electronic Health
Accessed 21 September, 2005
IO Press. Retrieved from http://www.iospress.nl/loadtop/load.php?isbn=9051992661
ite Aid Fraud
Over the years, there have been numerous cases of financial fraud perpetuated within the organizational mainstream of major companies. Financial fraud is often a well-coordinated sort of white-collar crime that often -- but not always - requires complicity and collusion amongst financial accountants, top management and auditors. ite Aid came to the limelight after the U.S. Securities and Exchange Commission announced that it would be filing accounting fraud charges against the company in 2002
Meanwhile, the United States Attorney for the Middle District of Pennsylvania leveled similar criminal charges accusing former CFO Frank Bergonzi, former CEO Martin Grass and former Vice Chairman Franklin Brown of perpetuating an immense accounting fraud scheme
. Compounding the crisis, according to former ite Aid COO, Timothy Noonan, were years of legal coaching amongst staff and mid-level employees. As investigations ensued, evidence of fraudulent manipulation of accounts, corporate malfeasance, and financial overstatement…
Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002
Federwisch, Anne Exploring Ethical Lapses during the Rite Aid Crisis Santa Clara University: Center for Allied Ethics, 2002
Jennings, Marianne Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns Before it's Too Late Arizona State University W.P. Carey School of Business, 2007
Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002
Organizations Establish ules for the Creation or Use of Accounting Information:
- Securities and Exchange Commission
- New York Stock Exchange
Internal evenue Service
Describe what kind of rules each makes, why they make them, and how they enforce them. Which organizations make laws, and which publish guidelines? What is the difference? What are the different consequences for those who bend various sets of rules? (Causey Enron case) How might Causey's defense be stronger or weaker under IFS guidelines rather than GAAP?
The rules that govern the three organizations may not be specifically made by that organization, but they are enforced by it. The Securities and Exchange Commission (SEC) is not a law or even rule making body, but the members do suggest legislation and, as one of its main functions, enforces the laws that have been passed by congress (SEC, 2012). The New York Stock Exchange (NYSE) is a…
Atwood, T.J., Drake, M.S., Myers, J.N., & Myers, L.A. (2011). Do earnings reported under IFRS tell us more about future earnings and cash flows? Journal of Accounting & Public Policy, 30(4).
Crovitz, L.G. (2008). Closing the information GAAP. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB122083366235408621.html?mod=hpp_us_inside_ today
Ernst & Young. (2010). U.S. GAAP vs. IFRS. Retrieved from http://www.ey.com/Publication/vwLUAssets/IFRS_vs_US_GAAP_Basics_March_ 2010/$FILE/IFRS_vs_US_GAAP_Basics_March_2010.pdf
Fowler, T., & Roper, J.C. (2005, Dec 28). Causey pleads guilty leaving just Skilling, Lay. Houston Chronicle. Retrieved from http://www.chron.com/business/enron/article/Causey-pleads-guilty-leaving-just - Skilling-Lay-1943273.php#page-2
The first three organizations in line to recuperate their funds were Citigroup, J.P. Morgan and General Electric Group. They had been offering financial solutions and encouragement to purchase the WorldCom stock based on a favorable business relationship. However, at the time when bankruptcy procedures were commenced, the three organizations recognized their losses and intended to recuperate them.
A succinct presentation of the period surrounding the crisis could be reveled by the media stories:
27 June 2002 - information on the people affected by the WorldCom crisis become available - about 60 banks across the globe had granted loans to the organization or purchase bonds
27 June 2002 - SEC charges the organization with fraud and three organizational leaders are subpoenaed before a governmental committee
28 June 2002 - John Sidgmore announced a cut in costs by $1 billion and the downsize on 17,000 employees
U.S. President George Bush condemns organizational…
Cooper, C., 2008, Extraordinary Circumstances: The Journey of a Corporate Whistleblower, John Wiley and Sons Inc.
Eichenwald, K., August 8, 2002, for WorldCom, Acquisitions Were Behind its Rise and Fall, New York Times
Faber, D., September 8, 2003, the Rise and Fraud of WorldCom, CNBC
McCafferty, J., July 2004, Extreme Makeover: How Robert Blakely and an Army of Accountants Turned Fraud-Ridden WorldCom into Squeaky-Clean MCI, CFO, No. 46
Fargo & Co. In detail. It puts light on the financial performance of the organization. The core products and competitive advantage of the organization have also been analyzed by the preceding paper. In addition to that this paper also highlights the SWOT analysis and the Porter's five forces model of Wells Fargo & Co.
Wells Fargo & Co.
Wells Fargo & Co. is a stable and renowned name in the banking industry. This organization has a commendable history of growth and success. Its mission and vision has enabled it to navigate successfully through the complicated and critical times of recession and economic downturn. It has been in the business since last many years and has gained a stable and prominent share in the financial and banking industry of the United States of America. (Amundson, 2011)
Wells Fargo & Co. started operating officially in the year 1852. They opened…
Amundson, C. (2011). Wells Fargo. Rochester: Minnesota School of Business. pp. 4-27. http://cassieamundson.efoliomn.com/Uploads/Wells%20Fargo%20Strategic%20Plan.docx .
United States Securities and Exchange Commission (2013). WELLS FARGO & COMPANY. [report] Washington, D.C.: United States Securities and Exchange Commission, pp. 59-64. http://www.sec.gov /Archives/edgar/data/72971/000119312513206363/d529054d10q.htm#tx529054_2' target='_blank' REL='NOFOLLOW'>
Wealth, Power and Insider Trading on Wall Street
In today's increasingly internationalized worldwide economic system, defined by the expansion of multinational corporate conglomerates into foreign shores, the necessity for effective and efficient financial regulation to prevent criminal conduct covered by the catchall term "insider trading" has never been greater. Whereas autonomous countries once maintained clear authority over businesses which were built on their shores, through levying taxes, enforcing fiscal regulations, and instituting a lawful system of commerce, today the most successful companies are those with the wherewithal to transfer their operations abroad. Global financial management requires a comprehensive comprehension of foreign exchange and currency markets, derivatives securities, international financial debt and equity markets, international portfolio investments and the global market for real assets. Due to the fact that "financial markets and intermediaries today are globally linked through a vast international telecommunications network," with this continual process resulting in "the trading…
Domhoff, G.W., (2010). Who rules America? Challenges to corporate dominance (6th ed.). New
York, NY: McGraw-Hill
Harrison, B.C., & Dye, T.R., (2011) Power and society: An introduction to the social sciences
(12 th ed.). Boston MA: Wadsworth
Safeway will drastically expand its market by taking over Sobeys. It will grow to expand the entire Canadian geography as well as almost double the number of stores it owns. In addition to this Safeway will have one less competitor in the marketplace, and be larger which will make it easier to stand against the other competition in the marketplace. The decision for a company to acquire another company is a massive and critical decision. The company acquiring must be ready to undertake the challenges involved, as well as the target company needs to be a proper fit with the other company. All of these changes mean many years of possible turbulence for the company and its employees, but if done carefully and mindfully the company will come out of the situation with a large financial and market gain.
This assignment had great value and the learner was able to…
Safeway. Safeway 2010 Annual Report Fact Book. Retrieved June 7, 2011 from Safeway Investors Web Site: http://safeway.ca
Sobeys. Sobeys Annual Report. Retrieved June 7, 2011 from Sobeys Corporate Web Site: http://www.sobeyscorporate.com
United States. U.S. Securities and Exchange Commission. Retrieved June 7, 2011 from U.S. Securities and Exchange Commission Web Site: http://www.sec.gov
Yahoo. Yahoo! Finance. Retrieved June 7, 2011 from Yahoo! Finance Web Site: http://finance.yahoo.com
Several terms and definitions are valuable to understand financial statements. In the United States, financial statements of public corporations are produced in accordance with the U.S. Generally Accepted Accounting Principles. These principles govern how the information for financial statements is compiled and presented. The purpose of these principles is so that all stakeholders can easily understand the statements and make comparisons across both time and across different companies, because the statements are produced and presented in a consistent manner. The International Financial eporting Standards (IFS) are the international equivalent of GAAP. While several countries utilize a national version of GAAP (U.S., Canada, UK, etc.), more than 100 countries use IFS, making this set of standards the most widely-adopted in the world. There is a move to converge national GAAP standards with IFS, including a multi-year project to converge U.S. GAAP with IFS. For now, however, IFS represents a different…
No author. (2012). Generally accepted accounting principles (GAAP). Investopedia. Retrieved August 18, 2012 from http://www.investopedia.com/terms/g/gaap.asp#axzz23vrKSd9Q
PCAOB.org (2012) PCAOB oversees: The auditors of companies to protect investors. Public Company Accounting Oversight Board. Retrieved August 18, 2012 from http://pcaobus.org/Pages/default.aspx
SEC.gov. (2012). The investor's advocate. Securities Exchange Commission. Retrieved August 18, 2012 http://www.sec.gov /about/whatwedo.shtml' target='_blank' REL='NOFOLLOW'>
Amazon is the largest internet-based company in America with headquarters located in Washington and Seattle in the United States. The company was founded in 1995 by Jeffrey Bezos and it started as online bookstores then diversified to selling videos, CDs, MP3 and DVDs. Today, Amazon offers about 4.7 million books, computer games, DVD and a wide variety of items of all kids. Ever since Bezos opened the doors of Amazon, online retailing has been defined and redefined for the rest of the Internet retail worldwide, and today it offers the customers a superior shopping experience through the provision of a high level of customer service. This research paper will discuss the impact of the Amazon's mission, vision and primary stakeholders' overall success, while analyzing different forces of competition and how they impact the business of the company. SWOT analysis will also be performed to determine the strengths, weaknesses, opportunities and…
Amazon.com. (2014). Digication e-Portfolio. Retrieved October 21, 2014, from https://stonybrook.digication.com/gilbert_
Bensoussan, B.E., & Fleisher, C.S. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. London: FT Press.
Bruce, M. (2008). SWOT analysis: a tool for making better business decisions.. London: U.S. Dept. Of Agriculture, Risk Management Agency.
Jurevicius, O. (2013). SWOT analysis of Amazon. Amazon SWOT analysis 2013. Retrieved October 19, 2014, from http://www.strategicmanagementinsight.com/SWOT-analyses/amazon-SWOT-analysis.html
Earnings were strong for employees as well as shareholders. Many employees owned stock or were dependent upon a rising balance sheet to ensure that they received their bonus and salary. Additionally, as at HealthSouth, there can be kind of a 'groupthink' effect, where people assume that something is 'okay' because everyone else, including powerful upper-level managers, are 'doing it.'
There are a number of laws that protect whistleblowers. The Dodd-Frank Wall Street eform and Consumer Protection Act was established to encourage individuals to report financial fraud to the SEC (Securities and Exchange Commission). ecognizing the profound financial sacrifice many whistleblowers make, Section 922 of the Dodd-Frank Act mandates that the SEC reward individuals who provide original information that results in sanctions in excess of $1 million in civil or criminal proceedings against the offending company (Oswald & Zuckerman 2010).
In a HealthSouth-like situation, being a whistleblower is not simply a…
Capitalize definition. (2010). Investopedia. Retrieved December 17, 2010 at http://www.investopedia.com/terms/c/capitalize.asp
Kelley, Pat. (2010). Definition of depreciation in accounting. Retrieved December 17, 2010 at http://www.ehow.com/about_7237480_definition-depreciation-accounting.html
Oswald, R. Scott & Jason Zuckerman. (2010). Whistleblower provision of the Frank-Dodd Act.
Employment law group. Retrieved December 17, 2010 at http://www.employmentlawgroup.net/Articles/ROswald/DoddFrankWhistleblowerProvisions.html
Sarbanes-Oxley has been successful in enabling higher levels of accountability throughout publicly-held companies mainly as a result of re-defining core processes as they relate to financial reporting and disclosure of events, both positive and negative that impacts a company's financial performance.
Sarbanes-Oxley for SOX as it is sometimes referred to is considered by many to be the "snapping back into place" of ethics in business after the Enron, MCI, Tyco and many other corporate scandals that rocked the markets of the world in 2001 and forward. In today's environment the SEC would most assuredly be focused on and demand greater visibility into how these write-downs either lead to written down and obsolete products, or the selling off of older-generation products on cents on the dollar. Given the intense focus on corporate accountability and standards, and the widespread fraud that has been found in both public and private corporations, the exact…
Krantz (2001) - Tech firms stand to gain from write-offs. USA Today Newspaper. July 16, 2001.
Sarbanes-Oxley Act (2002) - U.S. Senators Sarbanes and Oxley. Passed in 2002 by both U.S. House of Representatives and U.S. Senate. Text viewed on the Internet on July 22, 2006:
Mission and Vision tatement Analysis
Linking Wal-Mart's Mission and Vision to Their trategic Goals and Objectives
Assessing the Link Between Wal-Mart's Financial Performance And Its trategic Goals
Wal-Mart Competitive and Marketing Analysis
Wal-Mart Marketing Analysis
Potential Wal-Mart Merger & Acquisition trategy
Incentive and Reward trategies for Wal-Mart Employees
Evaluating How Current trategies Define Ethicacy Levels at Wal-Mart
Wal-Mart Ratio Analysis
Income tatement Analysis, 2007 -- 2012
Analysis of WalMart Corporation
Mission and Vision tatement Analysis
All internal systems, processes, external stakeholder management initiatives, supply chain management, sourcing, quality management and merchandising initiatives in WalMart revolve around the fulfillment of the expectations they create with their customers daily. Their Low Price Everyday (LPED) value proposition permeates their entire value chain, galvanizing it around the mission of delivering exceptional value on a consistent basis to customers. The mission and vision of WalMart rely on LPED as the catalyst and unifying…
Sources: (Wal-Mart, 2012) (Sodhi, Son, 2009) (Gosman, Kohlbeck, 2009)
Selecting the Best Possible Strategy for Maximizing Return to Shareholders
For WalMart to deliver the greatest potential value to shareholders, they need to pursue a mid-tier market strategy that differentiates store product
crime doesn't pay sometimes is a whole point which can't be applicable, especially when you're trusted with the management of multi-billion dollar corporation, and to be in charge of the well -- being of thousand of people. It's so difficult to criminalize someone's action, if such action doesn't cause any harm to anyone or if someone doing a lot of critical charity works. The case of Richard M. crushy can be described as one of the most important scenario which can acts as one of the success stories, showing how far most of these business ethnical values can be abused to hurt everyone for a period of time. As stated by Jennings (2012) in his book "Business Ethnics Class" unethical practices can only last for a short time, and nothing helpful can be found out of it.
However, the carpenter teachings regarding people who do not pursue wisdom that are…
Sense of entitlement
Jennings (2004a) identified that many corporate cultures are less concerned about their fraud because of their philanthropic endeavors. These good works seem to blind them to their culpability and cause them to both "overestimate their ability and underestimate the risk of being found out" (p. 17). This sense of entitlement constitutes two of the factors that Jennings identifies as "Wild West behaviors" (p. 13) that are common to organizations that ethically collapse; A "culture of innovation like no other" and a "culture of social responsibility" (p. 17). She notes that "the attitude develops slowly as the other factors of iconic status and high levels of success consume the individual right up to a feeling of invincibility" (p. 17). This is amply demonstrated in the behavior of Richard Scrushy, who despite all of the evidence arrayed against him continues to proclaim his innocence of any wrong doing.
Jennings (2004b) identified common red flags that would point to corporate counsel that an investigation into the accounting of the firm might be in order. She indicated that in HealthSouth's case legal counsel "fits the inaction mold" (p. 45), and "like executives at WorldCom, Enron, and Tyco, executives at HealthSouth, particularly Scrushy, lived lavish lives" (p. 46). She concludes that "the presence of many elaborate perks is a red flag all can see" (p. 46). It is these perks that, according to Neeley & Boyd (2010) "encourage[s] executives to take excessive risk with other people's money" (p. 548).
" (Schlossberg, 2004)
FERC analyzed while making a review of the electric utility mergers proposition, the transaction being proposed "likely effect" on (1) competition;
(2) rates; and (3) regulation. (Schlossberg, 2004)
There are stated to be "no antitrust exemptions for transactions subject to FERC review and such mergers are regularly reviewed by either the Federal Trade Commission (FTC) or the Division." (Schlossberg, 2004) The Securities and Exchange Commission had previously held jurisdiction for reviewing acquisitions of stock of electric utility companies however, the authority provided under the Public Utilities Holding Company Act of 1935 was repealed in 2005.
III. FORESEEAILITY DOCTRINE REHAILITATION
The work of Trujillo (2006) entitled: "State Action Antitrust Exemption Collides with Deregulation: Rehabilitating the Foreeseability Doctrine" states that a capitalist society that has policies which were established for the purpose of regulating "the promotion of competition in traditionally regulated industries such as the electrical market seems counterintuitive.…
Ewing, Saul (2007) FTC Complaint May Seek to Erode 'State Action' Immunity of Utilities. Staying Ahead Bulletin April 2007. Utility Law. Online available at: http://www.saul.com/common/publications/pdf_1285.pdf
Schlossberg, Robert S. (2004) Mergers and Acquisitions: Understanding the Antitrust Issues. American Bar Association 2004. Google, Books Online available at: http://books.google.com/books?id=JmcoRxfB1OsC
Trujillo, Elizabeth (2006) State Action Antitrust Exemption Collides with Deregulation: Rehabilitating the foreseeability Doctrine. Fordham Journal of Corporate & Financial Law. Online available at: http://findarticles.com/p/articles/mi_qa4048/is_200601/ai_n16410098/
Asset Allocation and Industry Sectors:
There are several economic concepts that affect an individual's daily finances and investments such as asset allocation and industry sectors. Asset allocation is primarily described as the manner with which an individual divides his assets among various asset categories like cash, bonds, stocks, and real estate. This fundamental principle also refers to an investment strategy with which an investor can lessen risks through diversification. One of the major goals of asset allocation is that it seeks to balance risk and reward through distributing a portfolio's assets based on a person's goals, investment horizon, and risk tolerance. Notably, the process of determining which combination of assets to retain in a portfolio is usually a very personal one ("Beginner's Guide to Asset Allocation," 2009).
The other common financial term or concept is industry sector where the two words have been used interchangeably to refer to a group…
"Beginners' Guide to Asset Allocation, Diversification, and Rebalancing." (2009, August 28).
Office of Investor Education and Advocacy. Retrieved from U.S. Securities and Exchange Commission website: http://www.sec.gov /investor/pubs/assetallocation.htm
Holden, J.P. (1983). Recent Developments Affecting Multiple Corporations: Sections 304, 306,
and 368. Retrieved from College of William & Mary Law School website: http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1460&context=tax
How firm raise capital by using venture capital? What conditions we need to raise capital by using venture capital?
Many startup companies are not mature enough to obtain capital from the public or secure a loan with the local banks in their area. They therefore, have to rely on venture capital as a way of raising capital for the firm to continue with the daily operations. Firms hence, raise capital by going out and looking for people who are willing to invest their money in a company that they see has the potential for growth. The company looks for a number of people who can pitch in large amounts of money depending on the nature and type of the business which if successful is expected to give above average returns to investors (Krishnan & Ivanov et al. 2011).
There exist certain conditions for a firm to secure capital…
Krishnan, C.V., Ivanov, V.I., Masulis, R.W., & Singh, A.K. (2011). Venture Capital
Reputation, Post-IPO Performance, and Corporate Governance. Journal Of Financial & Quantitative Analysis, 46(5), 1295-1333.
Hsu, Y. (2010). Staging of Venture Capital Investment: A Real Options Analysis. Small Business Economics, 35(3), 265-281.
Hopp, C. (2010). When Do Venture Capitalists Collaborate? Evidence on the Driving Forces of Venture Capital Syndication. Small Business Economics, 35(4), 417-431.
reporting of capital and operating leases and their impact on fair value measurements. The essay surveys lease accounting standards from 1976 thru the present.
The basic principle of lease accounting is that some leases are merely rentals, while others are in effect purchases. U.S. regulations that specify lease accounting rules are issued by the Financial Accounting Standards Board (FASB). The primary FASB statement on leases was Number 13, issued in 1976, and is also known as FAS 13, SFAS 13 and FASB 13. Over the years it has been amended several times by additional FAS, including FAS 22, FAS 23, FAS 27, FAS 28, FAS 29, FAS 98, and FAS 121. In addition to financial accounting standards, various interpretations and technical bulletins have also been issued to provide additional guidance. Lease accounting rules were previously labeled as section L10 in the FASB Current Text, while the new FASB Codification uses…
Epstein, Barry J. "Accounting for Leases IFRS vs. GAAP. " IFRS Accounting. 2011. 16 September 2011. .
"History of Lease Accounting (Agenda Paper 2)." Joint International Working Group on Leasing. International Accounting Standards Board and Financial Accounting Standards Board. London. 15 February 2007.
"Leases (Topic 840)." Financial Accounting Standards Board. August 17, 2010: 1. Financial Accounting Foundation. 2011. 16 September 2011. .
"Lease Accounting Rules." Financial Computer Systems, Inc. 2007. 16 September 2011. .
This is significant because it shows how some critics of contrarian investing will often point to the various instances of speculation and assume that it is contrarian investing. In some cases the psychology of consumers can become so extreme, that the definition of what is speculative expands greatly. As a result, using contrarian investing in conjunction with other indicators / tools can help prudent investors and traders, be able to identify when the market condition are becoming more extreme.
Contrarian Indicators and Tools
When using the different contrarian indicators / tools in conjunction with one another, you can begin to see how this strategy can be used, to effectively determine if the market conditions are overbought or oversold. There are number of different tools that can be utilized to indentify major changes that are occurring in the trend of a stock or the market averages. These would include: headlines…
"3M Historical Prices," Yahoo Finance, http://finance.yahoo.com /q/hp?s=MMM&a=00&b=2&c=1970&d=04&e=25&f=2010&g=v&z=66&y=0
"3M Reports First Quarter Results," 3M, http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjA2NjEwOHxDaGlsZElEPTMzNDE0MXxUeXBlPTI=&t=1
"3M Reports Fourth Quarter and Full Year 2008 Results," 3M, http://library.corporate-ir.net/library/80/805/80574/items/322063/054431D4-6347-45F1-AF4D-85CCA5F89C52_mmmQ4release.pdf
"American Depository Receipt." Investopedia, http://www.investopedia.com/terms/a/adr.asp
There are no other material costs related to the Offer is expected.
15. Who is the investigating accountant for this prospectus and what is their role?
Tiaro Coal Limited's investigating accountant is DO Kandalls Corporate Finance (NSE) Pty Ltd. The purpose of the investigating accountant's appointment is to report on the concerns raised in Australian Securities Investment Commission's (ASIC) application in relation to the Offer. The report must comply with the Australian Auditing Standard (AUS) 804 or at least, the reasonableness of the report can be appropriately verified (Cockburn: 2002: 1).
16. What are the risk factors associated with this prospectus and briefly describe each?
Investing in Tiaro Coal Limited involve embracing the susceptibility to uncertainties and risks. According to Section 10 of the Prospectus, Tiaro Coal's business activities are subject to both business risks and general risks. In relation to the nature of the business, there is the associated…
Cockburn, Richard. "
Avoiding stop orders on your prospectus," Australian Securities & Investments Commission Financial tips and safety checks. 2002. Accessed on March 23,
Australian Securities & Investment Commission. National names index. Extracted from ASIC's database on March 23, 2008.
Van Horne, James C. Financial Management and Policy. "Option Financing: Warrants,
Information System holds in Accounting Industry's future?
Looking through the glass and estimating what the future holds for any individual or profession is always a difficult exercise as the trends in any business or profession may change and so the path of development. It is better to look at the experience of some companies whose systems have changed over the past few years and thus try to estimate what is likely to happen.
There are many changes that have come to the world through the development of Information Technology and Computers. All the changes have come over a relatively short period of twenty years, and in many cases both industry and concerned humans are yet to adjust to the changes. There are many changes which have come in the accounting industry also, and those changes give an idea of what is likely to happen in the future.
The organization where…
Anders, Susan B. (February, 2005) "Website of the Month: Legalbitstream" The CPA Journal.
Retrieved from http://www.nysscpa.org/cpajournal/2005/205/essentials/p70.htm Accessed on 12 July, 2005
Anders, Susan B. (July, 2005) "Website of the Month: Kaplan CPA Review" The CPA Journal.
Retrieved from http://www.nysscpa.org/cpajournal/2005/705/essentials/p70.htm Accessed on 12 July, 2005
A company may be profitable, but not growing, and vice versa, thus affecting leverage (Aggaral and Zhao, 2007).
b. induce a negative relationship between firm value and leverage; conversely, if a firm is perceived with negative or flat growth, leverage is affected. Interestingly enough, new research shows that there are some micro-factors outside of growth that correlate to value and leverage. These include the way a corporation is managed, the size of the Board, the impression of large dividends and lack of focus on shareholder value, and milking of an industry (e.g. yellow pages in the day of the Internet). In addition, certain governmental regulations that are perceived as heavy handed and/or not conducive to growth or -- what is most critical -- perceived growth have considerable negative effects on leverage. Whether this psychological perception is valid or not, the research does not comment -- but it is surprising that…
Iyer, Khwaja, Luttmer and Shue. (2009). Screening in New Credit Markets. Retrieved July 2010, from Harvard University: www.hks.harvard.edu/fs/akhwaja/papers/PeerLending_09.pdf
THe Economics of Financial Intermediation. (2007, January). Retrieved July 2010, from Oswego.edu: http://www.oswego.edu/~edunne/340ch11.htm
Internal Governance. (2009, January). Retrieved July 2010, from IT Business Edge: http://www.itbusinessedge.com/topics/show.aspx?t=542
Stakeholders - Interests and Power. (2009, January). Retrieved July 2010, from Tutor2u.net: http://tutor2u.net/business/strategy/stakeholders-interests-and-power.html
Even if he hints around in a non-direct way that his friends should sell their stock without coming out and saying it, he may be guilty of insider trading because the information on the merger has not yet been made known to the public.
This is unethical and what the corporate officer should steer the conversation in a different direction and if his friends insist on continuing to ask questions he should firmly, but politely tell them he is not allowed to discuss personal company information with them.
Likewise, an employee has a certain amount of fiduciary responsibility if he knows that there are fraudulent practices happening at the corporation. If the employee knows that there is insider trading or if he knows that the accounting practices the corporation is using are dishonest, then he has an obligation to report what he knows. Some employees, especially if they do not…
Hoffman, Drew, "Martha Stewart's Insider Trading Case: A Practical Application Rule of 2.1," The Georgetown Journal of Legal Ethics 20, no. 3, (2007): 707-717.
James, Randy, "A Brief History of Insider Trading," Time, November 9, 2009. http://www.time.com/time/business/article/0,8599,1936562,00.html (accessed August 9, 2010).
Jennings, Marianne, "The Lessons from Galleon Hedge Fund and the Insider Trading Ring," Corporate Finance Review 14, no. 5, (2010): 43-46.
Khan, Walayet A. And Asjeet S. Lamba, "The Effectiveness of Legal Sanctions in Curtailing
Moreover, it is highly unlikely that such a clause would apply in the case of a tort dispute, because the likely plaintiffs in a tort lawsuit would be people who were injured by a misuse of the Technology, rather than any party involved in the contract negotiations. When there is no choice of law provision, the courts look at several different factors to determine which law to apply and whether a court has jurisdiction. In contract disputes, the courts look at the place of contracting, the place where the negotiating took place, where the contract will be performed, the location of the subject matter, and the citizenship and place of business of the parties. In tort cases, the courts look at where the injury occurred, where the conduct causing the injury occurred, citizenship and place of business of the parties, and the place where the relationship between the parties occurred.…
Counsel Journal 71 (Oct. 2004): 402.
Office of Domestic Fianance. "Overview." Terrorism Risk Insurance Program. 2008. Department of the Treasury. 18 Aug. 2008 http://www.ustreas.gov/offices/domestic-finance/financial-institution/terrorism-insurance/ .
Title VII of the Civil Rights Act of 1964, 42 U.S.C.S. 2000e.
S. is regulated by both state and federal regulations. Both the Securities Act of 1933 and the Securities and Exchange Commission Act of 1934 are federal laws that govern security issuing. he Security Act of 1933 requires that companies fully disclose information regarding their company as well as the security being issued to all potential investors (Megginson & Smart, 2009). he Security Act of 1993 called for the creation of the U.S. Securities and Exchange Commission (SEC) as well as defining what procedures are necessary for the public sale of securities and for the oversight of public companies. his includes the requirement of companies to file a disclosure form, which is referred to as a registration statement, with the SEC prior to beginning to solicit potential investors. Further, this form must be distributed to all potential investors. he SEC must approve the final registration statement before companies can execute sales…
The issuing of securities to the public in the U.S. is regulated by both state and federal regulations. Both the Securities Act of 1933 and the Securities and Exchange Commission Act of 1934 are federal laws that govern security issuing. The Security Act of 1933 requires that companies fully disclose information regarding their company as well as the security being issued to all potential investors (Megginson & Smart, 2009). The Security Act of 1993 called for the creation of the U.S. Securities and Exchange Commission (SEC) as well as defining what procedures are necessary for the public sale of securities and for the oversight of public companies. This includes the requirement of companies to file a disclosure form, which is referred to as a registration statement, with the SEC prior to beginning to solicit potential investors. Further, this form must be distributed to all potential investors. The SEC must approve the final registration statement before companies can execute sales to the public.
4. What are the benefits to the corporation of going public?
There are several advantages to making the choice to go public including the amount of equity capital that would become available to the company therefore creating a more secure financial situation. The company may also utilize this increase in capital to explore additional investment options and will increase their borrowing capacity for future endeavors. The company would also have other added benefits such as the ability to utilize stock as a part of compensation packages for employees, therefore potentially increasing the caliber of employee that they are able to recruit and retain. Another benefit is the potential attention that the company may receive
Both proposals were consequently amended and eventually accepted by the SEC.
The audit committee makes sure that the books aren't being cooked and that shareholders are properly informed of the financial status of the firm. Characteristically, the audit committee advocates the CPA firm that will audit the company's books, appraises the activities of the company's independent accountants and internal auditors, and reviews the company's internal control systems and its accounting and financial reporting requirements and practices. The compensation committee usually does the following: (1) recommends the selection of the CEO, (2) reviews and approves the appointment of officers who report directly to the CEO, (3) reviews and approves the compensation of the CEO and the managers reporting to the CEO, and (4) administers the stock compensation and other incentive plans. The suggested committee establishes experience for potential directors (Lunnie, 2007; pg. 90). It also puts collectively a list of candidates…
Over the last several years, Wendy's has been facing a number of different challenges. Part of the reason for this, is their profit margins are being squeezed by: intense competition and declining market share. Evidence of this can be seen by looking no further than, their recent earnings report as the company experienced a loss of $1.4 million dollars for the first quarter of this year. During the conference call, executives indicated that they are looking at strategic options for divesting itself of the Arby's chain. ("No eef with Wendy's Earnings," 2011) This is significant, because it is illustrating how the corporation must use different intermediaries to achieve this objective. To fully understand how this is taking place requires: examining two lenders they are using, two investment banks that they are utilizing to issue equity securities, looking at the roles these intermediaries are playing, what government entities are…
The Laws that Govern the Securities Industry. (2010). SEC. Retrieved from: http://www.sec.gov /about/laws.shtml
No Beef with Wendy's Earnings. (2011). Forbes. Retrieved from: http://www.forbes.com /2011/05/10/wendysarbys-posts-narrower-q1-loss-marketnewsvideo.html' target='_blank' REL='NOFOLLOW'>
According to the Organization for Economic Cooperation and Development (OECD) defines economic regulations (industrial regulations) as "intervening directly in market decisions such as pricing, competition, market entry, or exit ("Economic regulations," 2002). The main reason for economic regulation is because it is permits the straightforward businessman to succeed in the economy and decrease business relations within the economy from being broken by the illegal activity that takes place (Black, 2010). However, within the economy the market has four different structures that industries are classified under that the government uses to help control the advantages and limitations of supply and demand. The goal of the four structures is to look at how it "affects the outcomes in the market with impacts on the motivations, opportunities, and decisions of economic buyers and sellers through their behaviors within market competition" states Fischer (n.d.). The OECD defines social regulations as an impact…
Black, W. (2010, January 11). Inside the fed's secret war on good regulation. Retrieved from http://www.sagepub.com/upm-data/23879_Page_1_19.pdf
Boyer, P. (2001). Federal regulatory agencies. The oxford companion to United States history. Retrieved May 18, 2011 from http://www.encyclopedia.com/doc/1O119FederalRegulatoryAgencies.html
Department of Trade, Federal Trade Commission. (2011). Ftc guide to the antitrust laws. Washington, DC: Government Website. Retrieved from http://www.ftc.gov/bc/antitrust/antitrust_laws.shtm
Economic regulations. (2002, July 31). Retrieved from http://stats.oecd.org/glossary/detail.asp?ID=4639
2. It is not as clear whether Howard has a legal action against Angela, the TNA Director who advised a third party, her friend,
Foster, of Hawke's pending take over of TNA. Angela did not take action to buy or sell stock, rather a third party friend, Foster, benefited from Angela's knowledge via her position as a TNA Director and purchased stock at the rate of $4 per share from Howard
understanding that TNA's Board would fight Hawke's take over attempt and accepting the risk of the outcome of the hostile takeover.
In a Securities and Exchange Commission investigation, Leo would be found to be counsel for the firm representing Hawke in his take over attempt of TNA and thus ethically bound to maintain the confidence/secret plans of his firm's client. In purchasing
TNA stock at a "low ball" rate pre-take over, Leo violated canons of legal ethics and could…
Policy Problem & Proposal
The United States faces a $1.4 trillion national deficit, and partisan debate about how to address it is threatening economic stability on top of the shaky "recovery" from the 2009 financial crisis. Yet American corporations continue to enjoy tax loopholes that reduce their taxes to unprecedented low levels. epublicans argue that corporations must retain their preferred tax status in order to maintain and create jobs. This tax policy has been known by a number of names: supply-side economics, trickle-down theory, and horse and sparrow theory. It has not been without its critics, yet, irrationally, the practice of permitting tax loopholes continues to prevail from time-to-time.
"As for the growth enhancing effects of lower tax rates, just look to the 2000s for the latest persuasive evidence to the contrary. After the Bush tax cuts on the progressive rates paid by the wealthy, GDP between 2001…
Advance Pricing Agreement Quarterly Reports, Internal Revenue Service. Retrieved http://www.irs.gov/pub/irs-apa/
Announcement and report concerning advance pricing agreements. (2011, March 29). § 521(b) of Pub. L. 106-170, Ticket to Work and Work Incentives Improvement Act of 1999. Retrieved http://www.irs.gov/pub/irs-utl/2010statutoryreport.pdf
Brehm, J., and Gates, S. (1997). Working, Shirking, and Sabotage: Bureaucratic
Response to a Democratic Public. Ann Arbor, Michigan: University of Michigan
, which markets paralegal services to the public, generated about $3.8 million in franchise revenue last year, according to the company's Form 10-K annual report filed with the Securities and Exchange Commission.
Miller, L. (2005) Outsource paralegal work. Trial 41(10), 72-73.
Increasingly, paraprofessionals are going freelance or by contract hours. With a salaried paralegal, if there is a break in the work, he or she may have to do clerical work because there is nothing else to do. A contract paralegal, however, can take on short-term, long-term, per-diem, or per-case projects, depending on what is needed by commissioned assignment. The person is paid only when billing, without the overhead, benefits, or taxes. Contract paralegals can assist with litigation preparation, covering employee absences, and overflow work. Anoutside paralegal can help prepare documents and keep cases moving. A paralegal who is familiar with files can maximize a firm's productivity and minimize costs…
If one particular company has plenty of liquid assets, which therefore assures its progression in future business ventures, then the company has good potential for investing. However, if the company seems to have more current liabilities than assets and capitol, then the investor should definitely look elsewhere.
There are several ways which investors should judge companies in terms of potential investments. One is to judge a company based on their earnings per share, which is calculated through the earnings of the company in the last four quarters. Revenue-Based Evaluations compares companies based on revenues as related to company costs or long-term debt. Investors should also look at a company's cash-flow, or the amount of capitol which actually passes through a company each quarter after that company withdraws money for the cost of maintaining business. Another way is to judge based on the equity of a company, which is judging the…
The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated last year in the Sarbanes-Oxley Investor Protection Act, which establishes new guidelines for the securities industry. Initially a Democratic brainchild, the act became favored by epublicans in the House when it was realized that such adjustments would be of great benefit to shareholder value in that they enhanced general financial stability. This is the most prominent piece of financial legislation since the establishment of the Securities and Exchange Commission in the early 1930's. The most widely recognized feature of the new legislation, which was introduced in 1992, is that board members are held personally and criminally liable for the accounting practices that the company employees. This act also establishes guidelines as to the coverage of securities by sell-side analysts who face…
Resources and Authority
Studies and Reports
Corporate and Criminal Fraud Accountability
White Collar Crime Penalty Enhancements
Corporate Tax Returns
The following till take a look at Foreign Corrupt Practice Act or in other words the FCPA.
Discovering the corporate payments difficulty in the middle of the 70s from a blend of work by the Watergate Special Prosecutor office, this includes related additional work and inquiry by SEC-Security and Exchange Commission and the Multinational Corporations Subcommittee by Senator Frank Church. In 1975, within four months, separate hearings were held by the Church Committee on Gulf Oil, Mobil Oil, Northrop, and Lockheed (Koehler). Every one of these corporations became the main subjects of allegations, concerning uncertain payments made either directly or indirectly to officials of foreign government or foreign political parties bearing a business purpose in mind. For example, the Gulf Oil primarily involved the contributions made to political campaigns of the epublic of Korea President. Northrop was mainly involved in making payments to a general in Saudi Arabia. Principally,…
Burns, D., Sullivan, & Gibson. (2009). Navigating the FCPA's Complex Scienter Requirements. Retrieved March 18, 2016, from http://www.gibsondunn.com/publications/Documents/Burns-Sullivan-NavigatingTheFCPAComplexScienterReq.pdf
Harris, A. (2011). Scholarship @ Claremont -- Claremont Colleges Research. The Impact of the Foreign Corrupt Practices Act on American Business from 1977-2010. Retrieved March 18, 2016, from http://scholarship.claremont.edu/
International Whistleblower Reward Law Information Center. (n.d.). History of the Foreign Corrupt Practices Act. Retrieved March 17, 2016, from http://www.internationalwhistleblower.com/history.html
KOEHLER, M. The Story of the Foreign Corrupt Practices Act. Ohio State Law Journal, 73(5). Retrieved, from http://moritzlaw.osu.edu/students/groups/oslj/files/2013/02/73.5.Koehler
Enron could engage in their derivative trading strategy with no fear of government intervention because derivative trading was specifically exempted from government regulation. Due in part to a ruling by the Commodity Futures Trading Commission's (CFTC) chairwoman, Wendy Graham, derivatives remained free of regulatory oversight. Ms. Graham, wife of Texas senator Phil Graham, made this ruling 5 weeks before resigning as chairwoman of the CFTC and joining the Enron oard of Directors in 1993.
Derivative accounting is further complicated because there is no consistent way to fairly report their value and risk in a company's financial report. In 1998 Rule No. 133, "Accounting for Derivative Instruments and Hedging Activities" was developed by the Financial Accounting Standards oard (FAS), an independent agency that sets guidelines for corporate auditors. Rule 133 contains more than 800 pages, which further complicates its adoption and consistent interpretation by various companies. SFAS No. 133 was subsequently…
Dettmer, Jamie, and John Berlau. "Requiem for Enron: There's Enough Blame to Go around for the Collapse of the Energy Giant From Executives to Auditors to Financial Analysts to Congress." Insight on the News 7 Jan. 2002: 12+. Questia. 10 Mar. 2005 .
Folbre, Nancy. "Blowing the Whistle on Poverty Policy." Review of Social Economy 61.4 (2003): 479+. Questia. 10 Mar. 2005 .
Gup, Benton E., ed. Too Big to Fail: Policies and Practices in Government Bailouts / . Westport, CT: Praeger, 2003.
Hartgraves, Ai L., and George J. Benston. "The Evolving Accounting Standards for Special Purpose Entities and Consolidations." Accounting Horizons 16.3 (2002): 245+..
The company which is responsible for assigning the issuers of particular kind of debt obligations and debt instruments the credit ratings is known as a credit rating agency (CA). There are a few cases in which the ratings are given to the underlying debt servicers. It is the special purpose entities, non-profit organizations, companies, national governments and the state and local governments who, in majority of the cases get the securities issued. The credit worthiness (i.e., the ability to pay the loan back) as well as the rate of interest which is applied to a specific security being issued is taken into consideration while assigning a credit rating to an issuer. After the financial crisis which took place in 2007/2009 the value of this kind of ratings was questioned to a great extent. A report was submitted by the Securities and Exchange Commission to the congress in 2003…
Blochwitz, S., When, C. And Hohl, S. (2003), Reconsidering ratings, Working Paper. Deutsche Bundesbank, Frankfurt.
Bolton, Patrick, Xavier Freixas, and Joel Shapiro, (2008), "The Credit Ratings Game" Mimeo, UPF, Barcelona.
Dittrich, Fabian, (2007), "The Credit Rating Industry: Competition and Regulation," Working Paper, University of Cologne - Department of Economics.
Fitch (2007), Sovereign Rating Transition and Default Study 1995-2006, February 7.
The trader must pay the cost of the option ($5.00 x 100 shares = $500). The stick price starts to rise as expected and then stabilizes at $110: before the expiry date on the options contract, the trader can engage in a call option and purchase all the shares of the company's stock at $70, the strike price on the options agreement. The trader pays $7,000 for the stock and can sell the new stock on the market for $11,000, making a profit of $4,000.
Call vs. Put / Seller vs. Buyer
As this paper has already stated, options one the ability, without an obligation, to engage in a security at a set price within a particular time period. With a call option, the buyer has the right, though is not required to buy at a set quantity of a commodity or a financial instrument from a seller by a…
Diffen.com. (2013). Call Option vs. Put Option. Retrieved from Diffen.com: http://www.diffen.com/difference/Call_Option_vs_Put_Option
Dummies.com. (2013). Basic Strategies for Buying and Selling Puts in Stock Trading. Retrieved from Dummies.com: http://www.dummies.com/how-to/content/basic-strategies-for-buying-and-selling-puts-in-st.html
Fischer, J. (2010, May 21). Use Options to Protect, Hedge, and Gain. Retrieved from Fool.com: http://www.fool.com/investing/general/2010/05/21/use-options-to-protect-hedge-and-gain.aspx
Greg, G. (2011, December 20). When Is The Best Time To Sell Call Options? Retrieved from seekingalpha.com: http://seekingalpha.com/article/314918-when-is-the-best-time-to-sell-call-options
SOC 205 – Society Law and Government 1
The Enron (Kenneth Lay and Jeffrey Skilling) Trial
Summary of the Trial
The Enron Trial dates as one of high profile case of corporate fraud in the US. Enron was founded in 1985 by Kenneth Lee Lay and was reported as the largest seller of Natural gas in North America by 2000. The American energy company recorded a spectacular rise with revenues increasing to over $100 billion in 2000 from $9 billion in 1995 and an increase of Enron’s stock prices recording a high of US$90.75 per share. Enron Corporation was ranked consistently as America's Most Innovative Company" between 1996 and 2001 by Fortune Magazine. The end of 2001 saw an unprecedented collapse of Enron’s stock price from US$90.75 per share to less than a dollar following an announced of $1billon loss in the first quarter of 2001 and resulting to declaration…
Prior to the corporate financial scandal, WorldCom was one of the largest long distance telephone companies (euters, 2003). Initially headquartered in Mississippi it later moved to Virginia. The company grew fast by acquiring other companies such as MCI Communications in 1998 and UUNET technology in 1996. Other companies acquired included, Metromedia in 1992, esurgens Communications Group in 1993. In the course of this acquisition spree, WorldCom undertook two complex takeovers. The first was the 1998 acquisition of CompuServe from H& Block where it retained the network division, sold off the online service to American Online (AOL) and the second, the acquisition of Digex in 2001, and disposed of all Digex assets to Allegiance Telecom (Kaplan & Kiron, 2004). With these acquisitions, it gained a favorable reputation in the market as a company with a solid foundation.
Facts of the WorldCom Case
The WorldCom fraud case is one of the…
Kaplan, R.S., & Kiron, D. (2004). Accounting Fraud at WorldCom. HBS Premier Case Collection .
Reuters. (2003, April 14). WorldCom to emerge from collapse. Retrieved from www.cnn.com: http://edition.cnn.com/2003/Business/04/14/worldcom/
Ryerson, F. (2009). Improper Capitalization and The Management of Earnings. Las Vegas: Macon State College.
The Securities and Exchange Commission, 02 Civ. 3288 (United States District Court For the Southern District of New York June 26, 2002).
finance and financial entrepreneurship. The basis of the article is on a discussion that was held on this subject among four leading lights of financial entrepreneurship in the United States - Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. These people are famous in their own right and have had a sizeable role in financial entrepreneurship in the U.S. over the last 20 years. We have first discussed their achievements to get a clear idea about their personal achievements. This would certainly give a clear idea of what is possible in the U.S. today. They are of course interesting characters and one has to remember that the ideal entrepreneur of the 21st century cannot be thought of as an updated version of Henry Ford. After the discussion of the people, the meeting and the discussions held there are summarized. ased on the total information collected, we have come to…
Altman, E.I., ed. The High-Yield Debt Market: Investment Performance and Economic Impact, 41-57. 1990.
Atkinson, T.R. Trends in Corporate Bond Quality. Hardingson, 1967.
Goodfriend, Marvin; Parthemos; James, Summers, Bruce J. Recent financial innovations: courses, consequences for the payments system, and implications for monetary control, Economic Review, March 14-27, 1980
Schneider, S.H. Laboratory Earth: The Planetary Gamble We Can't Afford to Lose. Basic Books New York, NY. 1997.
Also cited as threats are those of:
(1) Product manufacturing and marketing risks;
(2) Cost and expense control or unusual events; and (3) Changes in laws and accounting standards. (Pfizer Inc. Report to the United States Securities and Exchange Commission, 2008)
IV. Internal Environment -- Strength and Weaknesses
Stated as strengths of Pfizer Inc. are the following components of its organization:
(1) Written policies and procedures;
(2) a compliance officer and compliance committee;
(3) Effective training and education;
(4) Effective lines of communication;
(5) Internal monitoring and auditing;
(6) Enforcement through discipline pursuant to established guidelines; and (7) Prompt response and corrective action for detected problems.
(Pfizer, Inc., 2009)
Another component that provides strength to Pfizer Inc. is its effective training and education program. As well Pfizer boasts effective lines of communication including an 'open door' policy allowing and encouraging colleagues to "discuss any issues, concerns, problems and suggestions with…
Pfizer Inc. (2009) Center for Responsive Politics. Online available at: http://www.opensecrets.org/orgs/summary.php?id=D
Pfizer Streamlines Operational Processes to Achieve Balanced Excellence (2004) Tradeline 29 Sept 2004. Online available at; http://www.tradelineinc.com/reports/40CF58BA-2B3B-B525-80444AE6588980A1
Corporate Governance FactSheet (2009) Pfizer Inc. Online available at: http://www.pfizer.com/about/corporate_governance/corporate_governance_fact_sheet.jsp
Pfizer's Infectious Disease Commitment and Portfolio (2007) Pfizer, Inc. 18 Sept 2007. Online available at: http://www.pfizer.com/files/investors/presentations/icaac_2007_presentation_071807.pdf
In this segment S&W competes with Beretta from Italy, Heckler & Koch from Germany and Fabrique Nationale from Belgium. The most dominant competitor in this segment is Glock of Austria, which sold 50,000 Glock Model 19 pistols to Iraqi Security Forces without the consent and approval of U.S.-based collation command or the U.S. Congress. Glock, in refusing to cooperate with the U.S. military, has opened up a significant opportunity for S&W in government markets based on the conflict Glock has created and the preference of Congressional members to buy from domestic suppliers.
Available Substitute Products
There is an abundance of substitute products as the handgun marketplace is fragmented with nine different manufacturers, each with between 5% to 14% market shares. Glock and their innovation in polymer pistols and firearms revolutionized the industry in the 1980s, yet S&W was able to regain their market share by working with distributors, dealers and…
References for Assignment #3:
Form 10-K (2006) - Smith & Wesson Form 10-K Filed with the Securities and Exchange Commission on July 14, 2006. Accessed from the Internet on November 13, 2006 at http://ir.smith-wesson.com/phoenix.zhtml?c=90977&p=irol-sec&control_selectgroup=Annual%20Filings
Bureau of Alcohol, Tobacco and Firearms BATF (2005) - Accessed from Research provided to the public from this agencies' website on November 14, 2006:
BusinessWeek (2005) - Top 100 Global Brands Scorecard. BusinessWeek Online. Data Provided by Interbrand. Part of the Innovation Metrics Series. Accessed from the Internet on November 20, 2006 from http://bwnt.businessweek.com/brand/2005/
healthcare services, many people could encounter some form of discrimination on the basis of their race, gender, or even sexual orientation. Discrimination in healthcare may seem like it is not something that is a major issue. However, it absolutely does come up in many situations, states and environments. hether based on gender, religion, race or sexuality, discrimination happens at overt or implied levels all of the time. In other situations, there are huge disparities in healthcare outcomes from one group to another and many experts say that this can only come from systemic or sporadic instance of racism from the healthcare sphere, from society in general or a combination of the two. hile most people get very good care, there are situations where the healthcare and/or government sectors fall short. It is important to note that although people are not always aware of this; there are various laws that seek…
Cornell Law School. (n.d.). 11 U.S. Code Section 507 - Priorities. Retrieved from www.law.cornell.edu: https://www.law.cornell.edu/uscode/text/11/507
Cornell Law School. (n.d.). 18 U.S. Code Section 152 - Concealment of assets; false oaths and claims; bribery. Retrieved from www.law.cornell.edu: https://www.law.cornell.edu/uscode/text/18/152
lawschoolcasebriefs.net. (2002). Access Now, Inc. v. Southwest Airlines Co. Retrieved from www.lawschoolcasebriefs.net: http://www.lawschoolcasebriefs.net/2013/12/access-now-inc-v-southwest-airlines-co.html
State of California. (n.d.). California Corporations Code. Retrieved from www.leginfo.ca.gov: http://www.leginfo.ca.gov/.html/corp_table_of_contents.html