Western States Optical Corporation

Next we’ll need to know is who the “Big 5” were. (Stuart) The “Big 5” were the five CFO’s involved in the scandal. (Stuart) Starting in chronological order of time in which they held the CFO position we’ll start with Aaron Beam Jr. Aaron served in the company for almost 13 years and was also one of the cofounders with Scrushy. Next we have Michael D. Martin, followed by William T. Owens, Weston Smith, and finally Malcolm “Tadd” McVay. All the CFOs had a hand in the HealthSouth fraud which misled investors by overinflating the stock price of HealthSouth stock making it appear more profitable than it actually was.

Kevin O’Hara, the director of employment services, has been with the company for 6 years and prior to working with

ate its earnings since that transaction was considered by Enron as a sale, and not

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

In looking at the facts of the case PwC was the accounting firm to Anicom. Anicom was in an agreement to purchase Tricontinental Industries in exchange for cash and Anicom stock. During these negotiations Anicom was involved with improper accounting procedures which resulted in meeting sales and revenue sales. This included a fictitious sale. PwC became aware of the practices when investigating an Anicom branch. PwC altered the CFO of Anicom, noting that the issue at this branch could be occurring at other branches. However, PwC failed

A. Belnick, Dennis Kozlowski, and Mark Swartz. They were charged with falsifying business records in order to conceal their questionable tactics in regards to getting loans without obtaining anyone’s approval. The earnings per share was affected negatively by the fraudulent record keeping, and the president of the Fire and Security division, Jerry Boggess, was an accomplice and fired as a result . After avoiding a million dollar tax bill for the purchase of artwork worth $14 million, Dennis Kozlowski was indicted for tax evasion by the DA of New York. Richard Scalzo was responsible for auditing the financials of Tyco. He participated in improper conduct because he did not implement the proper measures within his audit duties as it pertains

He transferred funds from WHA to his personal bank account and other accounts he had access and control too. Richard understated the amount of unpaid payroll taxes of WHA and its subsidiaries and by overstating the amount of loans made by him to WHA. As a result the financial statements and records were manipulated. He also directed purchasers of new issued shares to transfer the funds of the shares to accounts under his control. Around $6 million was taken and spent. The market value of WHA and the earnings per share were also inflated and overstated as well. This happened because of Richard falsely giving records to the SEC, WHA shareholders, and perspective new purchasers of stock by understating the real number of outstanding shares in the company’s financial statements. World Health Alternatives lost $41 million in total from all of the fraudulent activity.

1- Encouraging employees to invest and buy stock in Enron when they knew the truth about the lack of value in the stock.

and the parent system and CEO on federal, criminal charges regarding violations of the Medicare Anti-Kickback Act in connection with recruitment of healthcare providers. The consciousness has definitely been raised among corporate CEOs and CFOs to insure the integrity of the firm and all its affiliates (Levine & Short,

Therefore, Market West accepted the corporation stock as partial debt. Hooper and Yoder agreed to add Brian Bradley who worked for Market West as the third director. Hooper colluded with Bradley and violated a fiduciary duty to Yoder by issuing 95 shares of stock to himself, 5 shares to Bradley, and none to Yoder. Furthermore, Hooper got paid $141,000 salary from the business without Yoder knowing. More importantly, Hooper and Bradly voted to force Yoder to leave the corporation. After Yoder found out that Hooper broke their agreement, violated Yoder’s rights and duties, acted dishonestly, and made unethical decisions, Yoder sued Hooper and Beautiful Daydreams in the District Court. Under the common law, with these facts, the court supported Yoder and ordered Hooper to give back one-half of the salary plus one-half of the shares of stock to Yoder.

The company transformation from private equity ownership with an immediate shift of CEO marked new challenges for the company. The company has been going through rigorous changes to keep up with the strong

He also received a 500,000 stock options from the entity, along with shares from its sister company. These were according to the SEC filings.

Main character in this fraud is Mr. Dennis Kozlowski, the CEO of Tyco. He misappropriated around $270 million through unauthorized loans, sale of Tyco securities and undisclosed compensation. In order to conceal these amounts, the compensation was incorrectly offset against unrelated gains. This led to violation of GAAP and misrepresented financial statements. For example, $44.6 million of bonuses were offset against gain from IPO of one of Tyco’s subsidiaries. They have also netted the bonuses with gain on disposal of business and gain on sale of common stock. According to ASC 718 Compensation, these and other bonuses should have been disclosed in operating earnings and should have decreased operating income. However, since they were offset against one-time gains, they did not have any impact on operating income. This “hiding” of compensation occurred on several occasions – the expenses were also netted against gain on sale

Cindy is the director of human resources. She has been a working member of the

In 1984, Richard Scrushy founded HealthSouth in Birmingham, Alabama. Scrushy was the company’s Chairman and Chief Executive Officer (CEO) when the company went public in 1986. HealthSouth grew quickly over the next several years. Shortly after HealthSouth went public, it is alleged that Scrushy instructed senior staff to materially inflate the company’s earning to match expectations. In 2002, the first sign of troubles occurred when Scrushy sold $75 million of HealthSouth stock days before HealthSouth announced a large loss. After this the SEC began to investigate if any insider trading laws had been violated. In 2003,