Teaching business ethics: Plato was right

Figures & data

short-legendFigure B1.

short-legendFigure D1.

Table B1. The below table presents the key players and facts regarding their role in the Enron Scandal

Name	Position	Facts
Kenneth Lay	CEO and Chairman of Enron (1986-2001)	In February 2001, Kenneth Lay resigned from the CEO position and Jeffery Skilling took over. Jeffery Skilling stepped down as CEO in 14 August 2001 and Kenneth Lay resumed the role until 23 January 2002 when he resigned as CEO and Chairman. Two weeks later he resigned from the board. Kenneth Lay was convicted on 25 May 2006, of six counts of conspiracy to commit securities and wire fraud. He faced up to 45 years in prison. He was also convicted of bank fraud and making false statements to banks in a separate trial and he faced up to 120 years in prison for those charges. On 5 July 2006, Kenneth Lay died of a heart attack while on vacation. He was scheduled to be sentenced on October 23 of that year.
Jeffrey Skilling	CEO of Enron (Feb 2001-Aug 2001)	Jeffery Skilling was the CEO of Enron from February 2001 to August 2001 when he resigned for personal reasons. He sold 1.3 million shares of stock for $70.6 million and transferred 2 million shares back to Enron from June 1996 to November 2001. He received $13.2 million in bonuses from 1997-2000. In February 2002, he testified twice before congress, claiming he had no knowledge of any accounting or financial problems. On 19 February 2004, Jeffery Skilling was charged with 35 counts of fraud, conspiracy, filing false statements to auditors and insider trading.
Andrew Fastow	CFO of Enron	Andrew Fastow was the Chief Financial Officer (CFO) for Enron. On 24 October 2001, the day after Kenneth Lay expressed confidence in him to analysts, he was pushed out of Enron. Andrew Fastow earned at least $45 million from LJM partnerships, investment vehicles named after his wife and two children. He also earned at least $33.7 million from the sale of more than 687,000 shares of Enron Stock from June 1996 to November 1991. Andrew Fastow was indicted on 78 counts of wire and securities fraud, money laundering, conspiracy and obstruction for running various financial schemes designed to enrich him, his family and friends. On 19 January 2004, he plead guilty to the conspiracy.
Sherron Watkins	Vice President of Enron	Sherron Watkins was Enron’s Vice President at the time of the scandal. She wrote a famous letter to Mr. Kenneth Lay describing improper accounting practices at Enron that later would suit as substantial evidence in the Congressional investigation of the companies collapse.

Table D2. The below table presents key players and facts in the WorldCom Scandal

Name	Position	Facts
Bernard Ebbers	Founder and CEO of WorldCom	Bernard Ebbers was one of the firm’s founders in 1983. In 1985 he took the position of CEO for the company. He held the position until his resignation in April of 2002. He had an excess of $400 million dollars in personal loans using his WorldCom stock as collateral at the time of his resignation. Bernard Ebbers was convicted and sentenced to 25 years in prison for his role in the scandal. His appeal was eventually denied and he is currently serving the time (AccountancyAge.com, 2006).
Scott Sullivan	CFO and Secretary of WorldCom	Scott Sullivan was also fired in June of 2002 for his role in the improper accounting. He was the star witness for the prosecution in the trail against Bernard Ebbers. He did receive 5 years in prison for his own role in the scandal (AccountancyAge.com, 2005).
David Meyers	Controller and SVP of World Com	David Myers resigned in June 2002, the same day as the firing of Sullivan, because of his alleged involvement in the improper accounting. He was sentenced to 1 year and 1 day in prison for his role in the scandal (McClam, 2009).
Buford “Buddy” Yates	Director of Accounting at WorldCom	He was charged and sentenced to 1 year and 1 day in prison for his role in the scandal (Bennett, 2005).
Cynthia Cooper	Chief Internal Auditor of WorldCom	Cynthia brought the accounting discrepancies that she and her team found to the attention of Sullivan, Arthur Anderson LLP, Myers and many more throughout the company. She was told to ignore the issue. She conducted her own audit of the company and compared it to the Arthur Anderson audit. With the help of her team, she “blew the whistle” on the scandal at WorldCom to their audit committee (Carozza, 2008).

Carozza, D. ( March 2008). Extraordinary Circumstances: An Interview with Cynthia Cooper, Fraud Magazine. The Association of Certified Fraud Examiners. http://www.fraud-magazine.com/article.aspx?id=210 accessed July 1, 2014.

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