Business Organizations; Employment Law Essay Example | Topics and Well Written Essays - 250 words

Business Organizations; Employment Law - Essay Example adequate oversight of the accountants was lacking, presence of conflict of interest by the stock analysts, inadequate funding of the Securities and Exchange Commission, lack of adequate disclosure of provisions and presence of corporate governance procedures that were weak. It has been argued that Adelphia’s acts, especially the move by the Rigas family of mixing the finances of the company with those of the company, represents one of the biggest cases of financial fraud in a publicly traded company. In 2004, the SEC filed suit against Adelphia Communications Corporations on charges of financial fraud. In a legal move labelled as the most comprehensive in financial fraud, members of the Rigas family were indicted together with a number of top executives. The charges included-corporate asset waste, RICO act violation, abuse of control, fraudulent conversion and conveyance of company assets, breach of fiduciary duties by the board of directors, and unjust enrichment by the management. The Adelphia Communications case, is one of the biggest cases of corporate malfeasance and has been responsible for the adoption of new business ethics and practices across the globe. Following the scandal, many companies across the globe have adopted stringent corporate codes of conduct, while governments have adopted greater measures to punish management staff from defrauding companies by sentencing guilty parties to life sentences and imposing hefty fines. Improvement and reform of corporate law has been mandated following the scandal. For example, the Corporate Reform Act 2002 empowers the SEC to promulgate professional codes of conduct for securities lawyers. It mandates securities lawyers to prevent violations of securities law by companies or a company employee breaching his/her fiduciary duty to shareholders. Additionally, the society in general has become more vigilant regarding the workings of corporate management and