In the past, thousands of experiments were conducted without regard to safety or ethics, often with deadly consequences.
Highly positive results were provided to new potential investors to attract new money to be invested into the firm Henriques However, these results were completely fictitious.
When the financial downturn of started to get worse, investors in the company started to withdrawn funds at an accelerating rate. Had the research data been reported accurately in the first place, investors would have the ability to make a logical choice when choosing the company to manage their investments.
As one of the largest financial frauds in modern history, there were many injured parties involved. The primary victims of the fraud included individual investors, pension funds, and non-profit organizations.
Many middle class citizens lost a significant percentage of their total retirement assets. Although it is unlikely these lawsuits will provide much success, it is the only hope for some investors who experienced massive losses from the fraud.
Bernie Madoff himself took sole responsibility for the crimes and pled guilty to a total of 11 federal felonies. Although other people are suspected to be involved, he was sentenced to a year prison sentence Henriques The wealth management company is now defunct and most of the fake returns paid to early investors are unrecoverable by those who lost their entire investment.
The scam was one of the most widely covered financial frauds in American history. Madoff is now a household name and people are more aware of the widespread impact that white-collar crimes can create.
The actions of a single man have negatively affected tens of thousands of people from all over the world. In the aftermath of the scandal, the Securities and Exchange Commission admitted to several shortcomings that allowed the scheme to thrive for so long.
One of the most important aspects the SEC listed was a failure to follow up on inquires related to suspected fraud Hilzenrath In addition, the case has called for additional regulation and transparency among wealth management companies.
Companies like this are privately owned, and thus exempt from much of the regulation that public companies face. A proposed solution is to require additional financial regulation on hedge funds and wealth management companies. The Madoff scandal highlighted the highest potential negative outcome when business research ethics are not followed.
If the research data and financial results were reported accurately to investors this scam would have been avoided entirely.
On a positive note, the scandal has provided a good example of opportunities to prevent fraud in the future.
Regulating bodies have recognized their shortcomings and can use this as a model to reform existing laws on private wealth management companies. The victims will never recover their entire investment, but the experience can hopefully be prevented in the future.
In the end, Madoff received a sentence that will ensures the rest of his life will be spent in a prison cell. Eight SEC employees disciplined over failures in Madoff fraud case; none are fired.Ethics and the behaviors associated with them have the highest significance for different reasons within a business organization.
Companies must ensure they follow all levels of ethical behavior when any activity is performed at their premises; especially activities related to business research. Business Research Ethics.
Perhaps the most widely recognized example of unethical business research, Bernie Madoff managed to build a multi-billion dollar investment firm based on skewed research and false financial data.
This settlement shows Glaxo follows similar unethical business practices in the developed world with its primary pharmaceutical products. An Australian professor wrote a revealing article about how Glaxo manipulates research evidence in medical journals.
Reviewing the examples of unethical behavior in this article can help clarify whether a certain behavior is right or proper. Engaging in price fixing to force smaller competitors out of business.
Using bait and switch or false advertising tactics to lure customers in or convince them to buy a product. Unethical Business Research Conduct The foundation of any research is trust. Professionals, organizations, and the public must be able to trust that research is being reported honestly, accurately, and free from bias.
Business Research Ethics. Perhaps the most widely recognized example of unethical business research, Bernie Madoff managed to build a multi-billion dollar investment firm .