Ethical Behavior In Business Essay

896 words - 4 pages

Russell Bettinger
BUS-340 – Ethical and Legal Issues in Business
26 October 2014
Esther Lahargoue

Analyzing Ethical Behavior
Bernard Madoff was a renowned stockbroker, financial adviser, and served as the chairman of NASDAQ. Bernie Madoff is also solely responsible for the largest accounting fraud in all of American history. In December 2008, Madoff admitted to the federal authorities that the wealth management branch of his business, Ascott Partners, was a full on and elaborate Ponzi scheme. A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Over the course of nearly two decades, Madoff ...view middle of the document...

The corporate losses were not listed in their entirety, which caused investors to continue to partake because it seemed as if Enron was a highly profitable company. Enron was enjoying the revenue with misleading earnings reports allowing them to embezzle funds from investments while reporting faulty earnings to the investors they were profiting off of. In the year 2000, Enron manufactured an apparent crisis with the supply of natural gas in California, in order to be prepared for the discovery of their fraudulent activity. Throughout this entire scandal, the executives were profiting big time, while the actual Enron company was quickly approaching bankruptcy. And in October 2001, Enron filed for chapter 11 bankruptcy. The stock price of Enron, which was once as high as 91 dollars, plummeted to less than a dollar. The net loss sustained by Enron investors exceeded 70 billion dollars. Enron obtained a limited liability status, which caused only a small amount of the money that was lost to be returned.
Bernard Madoff was so focused on obtaining a profit that he had a by any means necessary mentality towards doing so. As the founder of NASDAQ and the main decision maker for his business, there was a heap of responsibility placed on Madoff. The profit maximization theory of ethics calls for the decision maker to focus on maximizing the long-run profits for himself or his business within the limits of the law. Madoff was successfully achieving all of that except for doing it within the limits of the law. He was sneaking around and being selfish in his financial ways. With they way unethical conduct can negatively impact a business’s long term profitability, it baffles me that Madoff wasn’t more highly...

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