Table of contents for Corporate scandals : the many faces of greed / Kenneth R. Gray, Larry A. Frieder, George W. Clark, Jr.

Bibliographic record and links to related information available from the Library of Congress catalog.

Note: Contents data are machine generated based on pre-publication provided by the publisher. Contents may have variations from the printed book or be incomplete or contain other coding.


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Table of Contents
Chapter 1: 	Corporate Scandals	1
Introduction	1
The Need to Restore Trust and Integrity	3
Root Causes of the Current Crisis	6
Remedies to the Current Crisis	7
Corruption and Greed on Wall Street	9
Overview of the Text	10
Chapter 2: 	A Short History of Business Scandals	17
The Mississippi Company Bubble of France	19
The South Sea Bubble of England	21
Age of the Railways	24
Railroad Scandals	26 
Railway Stocks in the U.S. & the Stock Market Crash of 1873	28
Jay Cooke--America's First Investment Banker	28
The Ponzi Pyramid Scheme of Finance	30
The Martin Act and State Blue Sky Laws	32
The Boom Era of the 1920s	33
A Respected Executive & the Middle West Utilities 
Holding Company	34
>From Popularity to Obscurity--A Hard Fall	35
A Fall from Grace with a Rebound	36
Government Efforts to Address the Stock Market Crash--
Glass-Steagall	38
More Scandals--McKesson & Robbins Company	42
Savings & Loan Scandals	43
Final Thoughts	45
Chapter 3: 	Corporate Malfeasance: Fraud, 
Regulatory Laxity and Theft	53
Major American Corporations Lose Their Way	54
Enron	54
Tyco	63
WorldCom	67
Global Crossing	70
Qwest	71
Adelphia	73
ImClone	74
Scandals Appear in Europe	77
Missing Oil Reserves At Shell	77
Royal Ahold	78
Parmalat	79
Europe Readies Itself for Future Scandals	81
International Reactions	82
Conclusion	84
Chapter 4: 	Addressing Corporate Scandals: The
Sarbanes-Oxley Act as a Panacea?	89
The Public Company Accounting Oversight Board (PCAOB)	90
CEO/CFO Reporting Certification	90
Disgorgement of CEO and CFO Compensation and Profits	91
Ban on Personal Loans to Executive Officers and Directors	92
Dramatically Accelerated Reporting of Trades by Insiders	92
Prohibition on Insider Trades During Pension Fund Blackout Periods	92
New Audit Committee Standards	93
HealthSouth: An Early Test of the Sarbanes-Oxley Act	94
Sarbanes-Oxley Already Paying Dividends	97
Demise of Author Andersen	99
The Plight of Other Accounting Firms	101
Freddie Mac Suppresses Profits	103
Macro Effects of Corporate Malfeasance	105
Economic Recovery Held Hostage	105
Assessment and Final Thoughts	106
Chapter 5: 	Scandal Spreads to Wall Street	111
Pressures Mount in Washington	112
SEC Chairman, Harvey Pitt, at Center of Controversy	112
Bush's Reaction: Status Quo?	113
Wall Street Tackled by New York Attorney General	115
The Martin Act Addresses Wall Street Wrongdoing	115
Eliot Spitzer--The Public's Hero	116
Reforms Started: The Global Settlement for Investment Banks	117
Penalties, Disgorgement, Funds for Independent Research, 
and Investor Education	120
Summary of the Enforcement Actions	120
Celebrity Investment Analysts Investigated	122
Henry Blodget's Resignation: E-mails Can Come Back to Haunt You!	122
Mary Meeker Remains Unindicted	123
Jack Grubman: Permanently Barred from the Securities Industry	124
Frank Quattrone: The Master of Technology IPOs	126
Summary of Global Settlement	127
The New York Stock Exchange (NYSE): Another 
Self-Regulation Failure	129
Richard Grasso: From Hero to Goat	129
Carl McCall's Role	137
John Reed Begins Work	138
Violations of "Trade Through Rules"	140
Final Thoughts and Conclusion	141
Chapter 6: 	Mutual Funds Scandals: More than a
Few Bad Apples	145
Mutual Fund "Late Trading" and "Market Timing" Scandals	146
The First Domino: Canary Capital Partners	148
Bank of America--Nations Funds Family	149
Putnam Investments	151
The Strong Funds	152
Janus Capital Group	155
Massachusetts Financial Services Company (MFS)	157
Alliance Capital Management	158
Other Prominent Funds Involved	159
Mutual Fund Fees Questioned	163
Illegal Sales Practices--Directed Brokerage Businesses	165
Fund Trustees As Chihuahuas	167
Fidelity's Johnson Argues Against Proposed Board Reform	168
Commission Bundling and Soft Dollar Payments	169
Malfeasance at Insurance Companies	169
Funds Withdrawal and the Effect on Funds Size	170
SEC Reform	171
Final Thoughts	173
Chapter 7: 	Executive Perversion of Financial
Management	177
Agency Theory	178
The Agency Problem in Full Bloom	180
Era of LBOs and Junk Bonds	181
Options: The Major By-Product of the LBO Movement	181
The Economic Boom of the 1990s	183
Dividend Conventions Violated	183
The Fundamentals of Share Repurchase Strategies	184
Buybacks Substituted For Dividends	185
The Inappropriate Use of Share Buybacks	186
Anything But Chump Change	187
At the End of the Day, What Happened?	189
A Trillion Plus $ Heist	190
What About Agency Theory?	192
Concluding Thoughts and Analysis	193
Chapter 8: 	Market System and Societal Institutions 
Called into Question	195
Institutions Establish the Rules of the Game	196
The Role of Organizations	198
The Market Economy as an Institution	199
Public Education is Necessary to Avoid "Atrophied Personalities"	201
Transaction Costs and Property Rights Give Rise to Institutions	202
Non-Market Institutions that Counter the Negative Effects
of the Market	204
The Family as an Institution	205
The State as an Indispensable Institution	206
The Nation and Cultural Institutions	207
Professional Associations Let Us Down	207
Choices Devoid of Meaning	208
Organization Theory: Incentives Versus Leadership	210
Spill-Over Effects of the Market	211
Executive Compensation: A Simple Disgraceful Process	212
Paying for Performance as a Joke	213
CEO Compensation Excesses: How Much is Enough?	215
Transparency as a Panacea	216
Final Thoughts and Analysis	217
Chapter 9: 	Virtuousness: Medicine for 
Business Ethics	221
Reflections on the Virtuous Life--Early Philosophies	223
The Study of Virtue in History	224
Adam Smith Relates Morality to the Invisible Hand	228
And Confucius Says!	233
Developing Character Through Virtuous Behavior	239
Blindsided By Greed	241
Education and Business Ethics	243
Final Thoughts and Analysis	246
Appendix: Caux Round Table	249
Listing of Virtues	257
Chapter 10: Corporate Scandals: Reflections	263
The Six Key Questions	264
Who Was the Central Villain?	274
Notes	277 
Bibliography	293
Index	303
List of Tables and Exhibits
Chapter 3
Figure 3-1: Dow Jones 1999-2004 Industrial Average	54
Table 3-1: Enron's Political Contacts	57
Table 3-2: Enron Timeline	60
Table 3-3: Tyco Scandal Timeline	64
Table 3-4: Main Players in WorldCom Fraud	70
Table 3-5: Company Legal and Ethical Violations	76
Table 3-6: Parmalat Timeline	80
Table 3-7: Prominent European Company Ethical Violations	82
Chapter 5
Table 5-1: Specific Settlement Payments	119
Table 5-2: Investment Bank Analysts	128
Table 5-3: Investment Bank Ethical Violations	128
Table 5-4: Richard Grasso's Compensation	131
Chapter 6
Table 6-1: SEC Policy Initiatives	171
Table 6-2: SEC Policy Initiatives (continued)	172
Chapter 7
Exhibit 7-1: S&P 500 Dividend Yield Since 1871	184
Exhibit 7-2: Share Repurchases Compared to Dividends	186
Exhibit 7-3: S&P 500 Share Repurchases and Equity Issuance	188
Exhibit 7-4: Market Value of U.S. Corporate Equities and Foreign
Depository Receipts Owned by U.S. Residents	191
Chapter 9
Table 9-1: Universal Symmetry--The Golden Rule Across Cultures	226
Table 9-2: Virtues that Support Business Transactions	232
Table 9-3: Via Classification of Sample Virtues	241
Table 9-4: The Seven Capital Sins vs. The Seven Capital Virtues	242
LIST OF ABBREVIATIONS AND ACRONYMS
.com		commercial
.edu		education
.gov		government
.org		organization
AA		Arthur Andersen
AA, LLP	Arthur Andersen, Limited Partnership
AFL-CIO	American Federation of Labor - Congress of Industrial Organizations
AMG		Affiliated Managers Group
AT&T		American Telephone and Telegraph
B.C.		before Christ
BAC		Bank of America Corporation
BBC		British Broadcasting Company
CEO		Chief Executive Officer
CESR		Committee of European Securities Regulators
CFO		Chief Financial Officer
CIT		Commercial Investment Trust
CNBC		Cable National Broadcasting Company
CNN		Cable News Network
COO		Chief Operating Officer
CPA		Certified Public Accountant
CSFB		Credit Suisse First Boston LLC
DOJ		Department of Justice
eps		earnings per share
EU		European Union
FASB		Financial Accounting Standards Board
FBI		Federal Bureau of Investigations
FDA		Federal Drug Administration
FDIC		Federal Deposit Insurance Corporation
GAAP		Generally Accepted Accounting Principles
GDP		Gross Domestic Product
GLBA		Gramm-Leach-Bliley Act
GSE		Government Sponsored Enterprise
HBS		Harvard Business School
ICI		Investment Company Institute
IOU		I Owe You
IPO		Initial Public Offerings
IRS		Internal Revenue Service
JEDI		Joint Energy Development Investments
KKR		Kravis, Kohlberg, and Roberts
KPMG		Klynveld Peat Marwick Goerdeler
LBO		Leverage Buyout
MBA		Masters of Business Administration
MCI		Micowave Communications Incorporated
MFS		Massachusetts Financial Services
NASD		National Association of Securities Dealers
NBC		National Broadcasting Company
NCB		National City Bank
NCC		National City Company
NPR		Northern Pacific Railroad
NPV		Net Present Value
NYAG		New York Attorney General
NYSE		New York Stock Exchange
OFHEO	Office of Federal Housing Enterprises Oversight
P/BV		Price Divided by Book Value
P/E		Price Divided by Earnings per share
PCAOB	Public Company Accounting Oversight Board
PIMCO	Pacific Investment Management Company
PwC		Price-Waterhouse-Coopers
S&Ls		Savings and Loans
S&P		Standard and Poor's
SEC		Securities and Exchange Commission
SLF		Sun Life Financial Inc.
SOA		Sarbanes-Oxley Act
SOP		Standard Operating Procedure
SPE		Special Purpose Entity
SRO		Self-Regulated Organization
SRS		Share Repurchase Strategy
SSB		Salomon Smith Barney Inc.
UBS AG	Union Bank of Switzerland (Zurich)
UBS		UBS Warburg LLC
UK		United Kingdom
US		United States
USA		United States of America

Library of Congress Subject Headings for this publication:

Commercial crimes -- United States.
Corporations -- Corrupt practices -- United States.