Ethics and Social Responsibility Essay

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Running Head: THE ETHICAL AND LEGAL IMPLICATIONS The Ethical and Legal Implications of the University of Miami Ponzi Scheme Abstract The University of Miami case was one of the biggest financial scandals in the past year. Former UM Football Booster, Nevin Shapiro, orchestrated a $930 million Ponzi scheme, with which numerous NCAA rules were violated. Shapiro allegedly provided cash, goods, prostitutes, assorted favors and on one occasion, an abortion to University of Miami football players. This paper will examine the various legal and ethical implications involved in this case, including an analysis of the university’s social responsibility, and an overview of the scandal in terms of three ethical theories: utilitarianism, Kant’s…show more content…
Legal Implications What the local news covers regarding the scandalous story barely scratches the surface. Many are not aware that Shapiro owned his own business and that the money and gifts given to the players were as a result of money laundering that was occurring in his fraudulent company. One must understand the history of Ponzi schemes and the Rules of Compliance held by the NCAA to grasp the gravity of the pending case. Past: Ponzi Schemes Nevin Shapiro, the former owner of Capitol Investments USA, Inc., is currently facing charges that he ran a $900 million ponzi scheme. The modern day schemer has pleaded guilty to count one of money laundering. The term Ponzi refers to “an investment scheme or a scam designed to separate investors from their money” (Jackson, D., 1993). It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century, even though the concept was well known prior to Ponzi (Jackson, D., 1993). On 1927, while in Boston, Charles Ponzi concocted a mail fraud in which he said he would pay investors $1.30 for each dollar they invested. He claimed to make money playing “fluctuation” in overseas postage rates, but he actually paid
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