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Accounting Fraud in Daedalus Capital LLC - Essay Example

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The article “Accounting Fraud in Daedalus Capital LLC” talks about an individual who is a worker of Daedalus Capital LLC who is charged with committing fraud by selling improper investments to customers as well as providing unlicensed advice to potential investors…
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Accounting Fraud in Daedalus Capital LLC
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Medicare Fraud in the USA
Main issue
The article talks about an individual who is a worker of Daedalus Capital LLC who is charged with committing fraud by selling improper investments to customers as well as providing unlicensed advice to potential investors. This individual namely Stephen Coleman is the founder as well as chief investment officer of the company which is situated in Chicago. Coleman has previous record of committing similar crimes in St. Louis Missouri and he was investigated but the case dismissed for lack of evidence of people who had been defrauded and their money lost in the defrauding scheme (Yerak, 2014).
This fraud scheme where Coleman was taking people’s money and promising them huge returns on their investments but then fail to deliver due to the unpredictability of the market place. The Illinois department prohibited the company from selling securities for a period of 90 days in which investigations would follow. The Illinois securities department would charge him with fraud in offering and selling securities, offering and selling of unregistered securities and offering investment advice while he was unregistered to do so.
The Illinois Securities Department hope to prosecute through seeking as much evidence against him as possible something which the court in Missouri failed to do leading to the current situation being experienced in Chicago at the moment. Despite the charges brought against him in the court of law and the pending investigations, Coleman still maintains that his company is able to get the clients the promised 100% reward on their investment as promised despite the conditions in the market (Yerak, 2014).
Describe how a company (and) people guilty should have dealt with that situation (provide solutions/critical thinking)
The first thing that humans when accused of fraud or inappropriate misconduct do is to deny any allegations. This happens even in cases where there is evidence of whatever magnitude or the individuals charged have prior record of the same offence in the past. This is the case with Coleman where he has records in court as well as with the securities department in Missouri about committing fraud to his investors but he still maintains that it is not the case (Ferrell & Fraedrich, 2012). He strongly stands for his company’s activities and promise even though it is evident that he cannot fulfill them without any fraud occurring in the process and there is evidence to that effect.
Coleman would have been better off keeping quiet about the whole situation until cleared or charged by the court for committing the fraud. Talking would only worsen the situation in case his claims were proven to be untrue. A matter that is already in court should also not be openly discussed in any other setting unless permission granted by the court. Coleman broke this law by talking to the media and he might find himself being charged with contempt in court over the matter.
As for the Illinois Security Department, they should have collected enough evidence about Coleman and his company Daedalus Capital LLC first of all before taking the matter to court (Jones, 2011). This would lead to them having a stronger case against the defendant and creating chances of them winning the case as opposed to what happened in St. Louis Missouri.
References
Ferrell, O. & Fraedrich, J. (2012). Business Ethics: Ethical Decision Making & Cases. New York: Cengage Learning.
Jones, L. (2011). Introduction to Business Law. New York: Oxford University Press.
Yerak, B. (2014, May 23rd). Chicago money manager Stephen Coleman charged with fraud. Chicago Tribune. Retrieved from http://articles.chicagotribune.com/2014-05- 23/business/chi-stephen-coleman-20140523_1_deuce-securities-laws-money-manager Read More
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