Posted: June 24th, 2021
Among other things, the money was reportedly used to pay off debts, build a Thirteen million dollar golf course, buy expensive condos, and flying In private Jets. These SIX members of the scandal were accused of hiding liabilities In off balance sheets. Along with hiding liabilities, they overstated their cash flow statements by One-hundred and sixty million dollars in 2000 and by two-hundred dollars in 2001. Delphic executives also falsified operations statistics and inflated their subscribers list by three million subscribers.
Earnings were also inflated to meet forecasts by Wall Street analysts. (2004), “Corporate scandals are now staples of front-page news as shareholders demand accountability for billions of dollars lost. Still, the U. S. Government says the Irrigates’ case is one of the worst ever of financial fraud” (Para. 3). Delphic scandal consisted of six members, John Riggs, Timothy Riggs, Michael; Riggs, James Riggs, James R. Brown and Michael Mulched. These members of the scandal committed many crimes based on selfishness, greed, and power.
Their management of Delphic costs billions of dollars to Investor and destroyed the corporation. According to Yuk (2006) “Decision processes are Likely to be characterized more by confusion, disorder, and emotionality than by rationality. Instead of careful analysis of likely outcomes in relation to predetermined objectives, information is often distorted or suppressed to serve preconceptions about the best course of action or a self-serving interest in a particular choice. ” The men were not thinking rationally and were taking money for self-serving reasons.
Balance sheets and accounting practices were manipulated In order to pay for their lavish lifestyles. At the time of the crimes Call time was most likely In the back of their minds. Repaying lost money to investors that was stolen was also not thought out. When managers make extremely bad decisions such as these the repercussions are vast. Investors were hit hard with the news of the Delphic scandal. Stock prices reached an all time high in 1999 peaking out at eighty-seven dollars per share.
This was due to the oncoming sales and assets that were falsely recorded by the executives, After news of the Delphic scandal broke In 2002, the stock plummeted to Just fourteen cents per share. The NASDAQ removed Dahlia’s stock in June 2002. Another consequence of the scandal and the executive’s decisions was lawsuits. The behavior of the executives and their behavior in the Delphic Corporation ultimately brought down the company. I believe that in order for a company to survive, ethical leadership and management must exist.
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