As mentioned above, corporate crimes are worse than all the other types of crimes in the world. This is because they have the capability to affect an extremely large number of people. Being a developed nation, America has had numerous cases of corporate crimes. This is because there are numerous people who are in the position of performing such crimes. Therefore, this is an issue that is worth a discussion.
Enron Corporation was involved in one of the world’s biggest financial scandals. Enron specialized in the supply of natural gas and other services. It had a large number of staff and was strategically located in Houston, US. The scandal was a result of the change in value of the money invested by people from all over the world. However, the main reason why it was the world's leading scandal was because it gave people the reason to lose trust in the government and its ability to control the economy.
Since Enron was the biggest financial scandal ever, it was evident that its corporate behavior was deviant. As explained earlier, deviant behaviors affect people’s social ways of living. What happened was, one morning in a seemingly successful enterprise, its officials announced that the company had run out of money and went bankrupt. Of course, this announcement was a shock to everyone such that it made headlines in every part of the world.
The people who were part of this scandal deserved to spend the rest of their lives in jail. After the court proceedings, a new board was chosen (Magstadt, 2012). Many people responsible for the scandal got away with only small penalties, which was probably a result of bribes given to the government. This was unfair, considering the number of people who had been affected. It was the case which prospective investors mainly considered in their investment decisions in America in the subsequent years.
Why it is Deviant Behavior?
Enron was dealing with the supply of natural gas, provision of electricity, and many other services. Therefore, if an individual woke up the next day and discovered that there was no electricity or water, it would be a shock. They would lose trust in this organization. This would be a denial of the service that has already been paid for. This would result into search for a better company. The other reason why this behavior is not socially acceptable is because one cannot wish to be associated with the company which is running bankrupt and stealing from the society. One can also infer deviance from the result of the act, as many people suffered losses due to Enron bankruptcy.
Bernie Madoff scandal is another big scam that has been rated among the top 10 in the history of US. Bernie Madoff started his trading empire in the 1980. This empire grew with time, and almost 4,800 clients had invested in him. Even one of his sons was a shareholder in the trading empire. However, in the year 2001, Madoff had turned from being an investor to a fraudster. Almost $50 billion was lost as a “liability of the company”. In the real sense, no company could have a liability of such a tremendous amount. So, people who had invested in his company, including Madoff’s son, took Madoff to court for prosecution (Weiss, 2006). Something truly intriguing and funny is that all those clients who were close to Madoff lost little or no money. What is more, it was later noticed that some of the investors were also involved in the scheme.
If the company was having a liability of such an amount, the company officials and the board of directors had the duty and obligation of letting the shareholders know about the problem. However, they did not inform them until that day. That is another obvious reason why this can be seen as corporate crime. Another significant downfall that led to the demise of Madoff Empire was that he offered high interest and return rates to people who had high roles in the government. He also did this to people who belonged to a high social class. Madoff was a whopping marketer who made no appearances for investors to see him. This was remarkably vivid that the clients had no confidence with the person who was just a statue.
Many people wanted to investigate Madoff firms, including financial analysts. However, Madoff had gained favors from those exact people he favored in the firms. Therefore, no legal action or investigation had been conducted. What shocked analysts and people in general was that Madoff claimed to be making a lot of money, which was a mystery to many, including the analysts who had vast knowledge and experience in the field. It was evident that Madoff had inherited the Ponzi way of doing things. This is where he was taking the new clients’ funds and paying off the older clients, so as to clear debts with the knowledge of other investors. However, nothing was done to him.
Even with the improvement of ICT in position, Madoff never allowed his clients to have access to their money with services like the internet; instead, he used letters. Many analysts were against this because they termed the company’s methods of doing things as a modern way of slavery. A key question was being asked by the investors, how did he manage to make consistent returns throughout the whole time? (Markham 2006) After Madoff had surrendered to the police, many people who were involved in the scandal committed suicide. Some top officials, including the one who had been found to have taken some overdose pills, committed suicide. However, the crucial question remained. Who were the other investors involved in the scandal? After his prosecution, Madoff was given curfew. However, even under his curfew, Madoff was noted to be sending valuable things to people and collaborating with the prosecutor.
Why the Madoff Scandal Violate Social Norm
It is clear that the people who have connections with top officials have an unfair advantage. This is because, in most of the scandals, they are found to have conspired with them. In their minds, they think that their scheme will never be noticed. However, that is not the truth of the matter. Everything that is done under the sun must be noticed, sooner or later. In the Madoff scandal, he had enslaved many people. He denied some of them their rights to have access to their money. He gave favors to people who had high social ranks. These behaviors led people to lose their money aimlessly to fraudsters, who were just after their own interests and gain. Madoff made so many people to fear to invest. He channeled their money to other uses.
The other fact that made this a deviance was the loss of lives (Samaha, 2005). There were people who decided to take their own lives after their misdeeds had been discovered. Madoff also lost his own son because of this. If he had followed the right path to make money, all these things would have not happened. This was a sign of the vast effect that corporate crimes could have on the society.
Wall Street Banking Bailout
This was a strategy put in place by the US government to strengthen its financial powers. Therefore, the government convinced people to deposit their money into the bank. This would ensure its safe keeping. The bill was to form a troubled Asset Recovery Program that worked through buying things from a bank and at a low bid so that the money could be used by other people. The government ensured that it bought all assets at low prices from these financial institutions.
The bill proposal was discussed and passed. The President of United States of America signed it into law. The money that was to be channeled through was $700 billion. So the government formed different committees that were to govern the use of money from all fields. First, the government made a committee that dealt with matters concerning mortgages. Companies were not allowed to withdraw money through people who had a high social class.
The government wanted to help troubled people at insurance companies. As in the past, the government feared that if it did not buy mortgages from the banks and other financial institutions, many would suffer from bankruptcy. This is because no bank would accept to give loans or money to the other bank. Members of the Congress wanted people to manage their own businesses, services, and, above all, their own institutions. Another fear that came along was that no bank wanted to speak about their net worth and debts (Barron, 1980). This was because many people who had invested in them would feel ashamed and banks did not want to lower themselves. The money was to be channeled in intervals: $350 was to be used in 2008 and later when president would take up power, the rest was to be used by him while in office. However, when Obama came to power, he has never used the recovery money. He came up with another Bill, where $787 US dollars were channeled to buy the banks’ stocks when they sold at a low price. Then, after gaining value, he then sold them off.
It was evident that banks were posting false labor rates. However, no one spoke about that. A clear example was the Barclays bank, which never posted charts of some months. This was to ensure that the name of the bank remained clean. It was also evident that motorists were suffering due to an increase in the price of petrol. This brought up the assumption that the banks and oil suppliers could have altered the prices of this crucial commodity, which was terribly wrong. This is because, as the rules and regulations of the G20 state that, any altering of prices is supposed to be shown and known to people.
Banks that received bailout from the government paid extraordinarily high bonuses to the staff. This was not the right thing to do, bearing in mind that these same banks were suffering from economic crisis. And what happens when these financial institute notice that a person is making a lot of profits from his money, which is under their custody (Deflem, 2011). One, they appoint this person to any managerial position in the company. This person may want to eliminate those people with little money from the institution, so that only those with large sums of money in their accounts should remain. Finally, this person becomes the decision maker in the company.
Why Banking Bailout Violates Social Norms
It is unethical for the government to get money from people. By buying their mortgages and loans when they are not in the position to pay and sell back the stock to them, when it is high. Also, it is unethical and socially unacceptable to exclude those people with less or little money in their accounts and replace them with people who have a lot of money.
In all the scandals discussed above, it is clear that remarkably many people used their powers or positions to suppress those people who were less fortunate. It is not socially acceptable to do such things to the same people who helped one achieve his goals. People should practice brotherhood, and show respect for other people’s money. They should also deliver the services for which they have paid. Finally, in case institutions run out of money, they should inform their investors and show transparency in all they do.