Acct-495
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- Date Submitted: 10/13/2012 03:03 PM
- Pages: 8
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Page 1
a. A rogue employee can be any employee that defrauds the company and does not follow the rules and guidelines put in place. This type of employee defrauds the company by attacking from within, causing financial and reputational damage (Biegelman, M. T. & Bartow, J.T., 2006, p. 8). Typical rogue employees are CEO’s, CFO’s, and COO’s. Although chief operators are mostly portrayed in the media, a rogue employee may be anyone in the company. Rouge employees do not care about the success of their company. Their main agenda is to cheat the company out of a successful growing business by stealing and defrauding.
A new defense strategy has emerged for the resulting prosecutions of responsible corporate executives called the “Chutzpah Defense” (Biegelman, M. T., 2006, p. 8). This strategy is mainly about trying to lessen the punishment for the corporate fraudster. The notion that these corporate executives have no clue as to what is going on at their companies is the challenge for juries to figure out. Many corporate executives that have tried to use this type of defense have not been successful.
b. Thomas A. Sebastian was the former CFO of an internet advertising agency named L 90, Inc. Since then, the name has been changed to MaxWorldwide, Inc. Between July 1999 and March 2002, Mr. Sebastian purposely inflated the company’s stock by providing false and misleading public statements regarding the company and its financial results. Sebastian admitted to his role in a conspiracy to generate fraudulent revenues for L90 to meet securities analysts' revenue estimates (Fraud Digest, 2008). His penalties for this fraud include 18 months of imprisonment, 9 months of home confinement, and $400,000 in lawsuit settlements. Other executives were involved and admitted their parts in this scheme also.
Page 2
c. Dr. Donald Cressey developed the Fraud Theory Triangle to explain why people commit fraud which included three necessary and interrelated elements that must...
a. A rogue employee can be any employee that defrauds the company and does not follow the rules and guidelines put in place. This type of employee defrauds the company by attacking from within, causing financial and reputational damage (Biegelman, M. T. & Bartow, J.T., 2006, p. 8). Typical rogue employees are CEO’s, CFO’s, and COO’s. Although chief operators are mostly portrayed in the media, a rogue employee may be anyone in the company. Rouge employees do not care about the success of their company. Their main agenda is to cheat the company out of a successful growing business by stealing and defrauding.
A new defense strategy has emerged for the resulting prosecutions of responsible corporate executives called the “Chutzpah Defense” (Biegelman, M. T., 2006, p. 8). This strategy is mainly about trying to lessen the punishment for the corporate fraudster. The notion that these corporate executives have no clue as to what is going on at their companies is the challenge for juries to figure out. Many corporate executives that have tried to use this type of defense have not been successful.
b. Thomas A. Sebastian was the former CFO of an internet advertising agency named L 90, Inc. Since then, the name has been changed to MaxWorldwide, Inc. Between July 1999 and March 2002, Mr. Sebastian purposely inflated the company’s stock by providing false and misleading public statements regarding the company and its financial results. Sebastian admitted to his role in a conspiracy to generate fraudulent revenues for L90 to meet securities analysts' revenue estimates (Fraud Digest, 2008). His penalties for this fraud include 18 months of imprisonment, 9 months of home confinement, and $400,000 in lawsuit settlements. Other executives were involved and admitted their parts in this scheme also.
Page 2
c. Dr. Donald Cressey developed the Fraud Theory Triangle to explain why people commit fraud which included three necessary and interrelated elements that must...