Business Organizations; Employment Law - Essay Example

Business Organizations; Employment Law al Affiliation) Adelphia Communications represents one of the most ideal cases for analyzing ethical issues on a global platform. The company’s unethical business practices eventually led to its bankruptcy in 2004 and is one of the biggest cases of corporate malfeasance including the scandals of Enron, World com and Tyco. The basic factor attributed to its decline is the prevalence of unethical behavior in the company and especially among the top management officials (Rigas family).

In addition to the inadequacies of the management, there was no auditor independence, 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 governance.Reference ListSEC Charges Adelphia and Rigas Family With Massive Financial . (n.d.). Retrieved March 27, 2015, from http://www.sec.gov/news/press/2002-110.html The Corporate Scandal Sheet - Forbes - Information for the . (n.d.). Retrieved March 27, 2015, from http://www.forbes.com/2002/07/25/accountingtracker.html