Question

Please find and post one example of a situation in which a business leader (or group of leaders) behaved unethically. You can google "corporate scandals," "ethical scandals in business, "unethical business leaders," etc. You won't have any problem finding something after just a few minutes of searching!

Do not use examples from politics, government, religious organizations, educational institutions, or other non-profit settings. Use examples only from for-profit businesses.

You may not use Wells Fargo since there's already a case on this company in Ch. 13.

There is no time frame; it can be a recent incident or something that happened years ago.

Each student must pick something different, so be sure to read all previous posts before posting your own. Also, you must reference your source(s). If you use the same example that another student has already posted, and/or you do not reference your source(s), you will not get credit for it.

1. Briefly, in your own words, describe what happened. Do NOT copy and paste from a source. Just describe it in your own words and include only enough detail to give a general picture of what happened. Keep it brief and focused -- just give us a one-paragraph summary of the situation.
   
2. What were the consequences of the unethical behavior? For example, did the company lose money? Were there criminal charges or a lawsuit? Did the company go out of business? Were employees, customers, or others harmed? Was the company's reputation damaged? Did it result in a law being passed to prevent such behavior in the future?
3. What appeared to be the underlying cau

Answer 1

Case: Bernie Madoff scandal, Sentenced to 150 years of imprisonment.

Bernie Madoff a well-known financier was sentenced to 150 years in prison for the biggest investment fraud in the US history. He was a well versed and an active financer, he helped launch the Nasdaq and made only $20 billion and cheated clients of $65 billion.

Madoff used the Ponzi scheme named after Charles Ponzi which promises high returns on money invested in the scheme, for example, Charles Ponzi would promise 50% returns in 90 days. He convinced thousands of investors to invest in his scheme and get consistently high profits and returns. Further, the investors were persuaded to continue investing the saving with him for good returns. The scheme would not allow more than 50% of people to ask for a refund or take back their funds. The company would consistently target new investors.

The scheme is actually based on a formula where money from one investor is used to return another investors money. He was finally caught when the clients requested $7 billion back in returns. He had only $200 million and had to return $300 million. He was finally caught in 2008 though his scheme started in 1960. In the case, 65000 petitions were filed from 136 countries and 35000 of the cases have been approved. The victims will be paid from the Madoff victim funds in 2017.

He was finally sentenced in 2014 to 150 years in prison and $170 billion restitution for fraudulent practices, perjury, money laundering and theft. His 5 employees were also found guilty in the Madoff Ponzi scheme. His accountant and lawyer are sentenced to 30 years imprisonment for their role in the scheme.

The underlying cause for the act was driven by greed and maintaining a lifestyle, but the real reason is not known.