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Chapter 7Individual Extension Activity – Part 2

Overview

Using your Chapter 7 notes (from the second section of the chapter) and the Internet, as required, answer the following questions. This activity is intended to bring up to date the concepts covered in the chapter and consider the topics further. Be sure to cite all your sources directly below the question in which you used that information.

Questions (10points each)

5) The book mentioned the impact of the ‘long hour’s culture’ here in the US. What impact do you think longer working hours has on i) individuals, ii) families and iii) businesses?

6) Lawsuits have an impact on various businesses. Find an article about a high profile or interesting lawsuit involving a business. Provide the URL and summarize the article in 50 words.

7) You learned about the various services provided by employers, include those associated with family friendly policies and assistance with dependency issues.

a)What do you see as the benefit of employers providing these services?

b)What disadvantage can you see with providing these services?

8) Additional information on environmental concerns

a)What is the difference between renewable and non renewable resources?

b)Find a non renewable resources, when is it set to run out?

c)What renewable resource can replace this?

d)As an individual, describe 2 things that you can do on a daily basis to help the environment?

e)Do you do these things currently, explain why or why not?

Corporate Ethics

PRIOR TO VIEWING VIDEO, TheMadoff Affair, research and define the following terms.

  1. Who is Bernie Madoff?
  1. What is a Ponzi scheme?
  1. What is a feeder fund?

(For further insight into what a feeder fund is and how feeder funds facilitated Madoff’s investment practices, study/review the linked article pertaining to Madoff: )

BusinessEthics–The Madoff Scandal

Video link: 55.01 minutes:

While watching the documentary make notes to answer the following questions.

  1. Note examples of unethical and/or illegal behavior discussed in the documentary. For what was Bernie Madoff charged, arrested and sentenced.
  2. Did he act alone or were others involved? If so, who?
  3. Who were his clients and what did he promise them?
  4. How did Fairfield Greenwich make its money?
  5. Is it customary for a feeder fund to be able to keep all client fees?
  6. What effect did this fee arrangement with Madoff Securities have on other fund managers around the world?
  7. How did the Fairfield Greenwich fund “take Madoff global”?
  8. What was the condition Mr. Madoff imposed on people marketing his investments? Why do you think he did this?
  9. When investors received their statements, what responsibility did they have to review and understand them? What signs could they have picked up on to alert them to potential problems?
  10. What kind of “due diligence” did the feeder funds, such as Fairfield Greenwich, do? What didn’t they do? Why are they being sued by their clients?
  11. Starting in 2001, whistleblower Harry Markopolos alerted the SEC three times to the likelihood that Bernard Madoff was running a Ponzi scheme. Why do you think the SEC didn’t act on this information until 2006?
  12. After the SEC cleared Bernard Madoff in its 2006 investigation, Harry Markopolos took his evidence to The Wall Street Journal, which did not publish it. What reasons can you think of as to why?
  13. To what extent do you think the SEC did or did not do its job?
  14. What was the final straw that uncovered the MadoffPonzi scheme?

Follow up questions – please answer the following after watching the documentary (20 points each)

  1. Ultimately, who do you think was responsible for the losses incurred by investors?
  2. Do you think the U.S. government should offset the losses incurred by investors with Madoff? Explain.
  3. What actions should the U.S. government take to minimize chances of other Ponzi schemes taking place?