History of Madoff

Analyzing Ethical Behavior

Using moral ethics is essential when operating in today's corporate world. Moral ethics can be defined as a social, religious, or civil code of behavior considered correct, especially that of a particular group, profession, or individual (Farlex, Inc. 2012). Ethics is also particularly imperious when working with financial information. For some, it is very hard to have trust in someone managing their hard earned money. Corporations in the past have provided inaccurate records regarding their financial statements in regulation to look superior to stockholders, without thinking of the consequence if they get caught. If a corporation does not inspire quality ethical conduct within their business, it is difficult to confide in their financial statements. In the 2000s, unethical business practices had brought financial hardship not only to the United States but the world as well. Corporations to ensure a future with profits and sustainability; must adhere to a strict ethical culture within their corporation. Implementing a balance among the business will allow for the corporation to survive and ultimately prevent the financial crisis brought on by the 2001 Enron Scandal and 2008 Bernie Madoff Ponzi scheme.

The Enron scandal is one that left an unfathomable and unpleasant scar on the face of modern business. As a result of the scandal, thousands of people lost their jobs, some people lost their entire pensions, and the Astros stadium was renamed Minute Maid Park and all of the shareholders lost the money that they had invested in the corporation after it went bankrupt. Former Enron CEO, Kenneth Lay, and Jeffrey Skilling behaved in an unethical manner without any form of justification. Sherron Watkins, the former vice president of Enron and Times Persons of the Year for 2002, the whistleblower behind this scandal, acted in a way that upheld moral principles. Ms. Watkins noticed something disbelieving about the accounting, so she took a closer look and didn't just ignore the problem. When she realized the depth of the situation, she reported it to the people that could do something about it in the organization, even writing a memo the top man, Kenneth Lay. When the company decided not to repair the situation, she went to the media, which forced the problem to be fixed by causing shareholders to dump their investments in Enron. Following this debacle, the US authorities have analyzed the situation and have attempted at undoing the wrong in a variety of ways. The Sarbanes-Oxley Act of 2002 that was perceived and put into place following the Enron debacle.

The Sarbanes-Oxley Act of 2002 was created by Paul Sarbanes and Michael Oxley to set new standards for corporate accountability as well as new consequences for acts of unlawful activity. The act changes how corporate boards and executives must relate with each other and with corporate auditors. It makes CEOs and CFOs