Business-Ethics Stories Featured by U.S. Press
May 27th, 2008 • Posted in: NewsArray of court cases revolve around allegations of dishonesty
WASHINGTON
Allegations of inflated stock prices, deceptive advertising, and foreclosure-rescue scams made headlines last week. Among the stories:
- Eight former AOL executives are facing civil fraud charges for allegedly inflating the company’s online ad revenues, according to a report from Forbes. The alleged misstatement of revenues — more than a billion dollars over actual figures, according to the U.S. Securities and Exchange Commission — contributed in part to the merger between AOL and Time-Warner and the subsequent meltdown of the new firm, according to the Forbes report. The merged company still exists, but its market capitalization is down by almost $200 billion.
- Drug company Merck last week agreed to pay $58 million to settle allegations by several U.S. states that the firm used deceptive advertising to promote the drug Vioxx. A report from the Wall Street Journal notes that the fine print in the settlement also stipulates that the company no longer engage in “ghostwriting” — the practice of using uncredited writers to prepare portions of manuscripts eventually published in reputable journals under the names of respected physicians and scientists. While agreeing to the anti-ghostwriting settlement, Merck continued to say the company acted in good faith and complied with all relevant regulations, notes the Journal.
- The subprime mortgage scandal and the subsequent housing slump have translated into a thriving business for mortgage con artists, according to a report from the Washington Post. Many of the scams involve misuse of financial data after hucksters pose as foreclosure rescue operations, according to the report.
Sources: Forbes, May 23 — Wall Street Journal, May 23 — Washington Post, May 23.
For more information, see: Related Newsline story, May 19 — Related Newsline story, Apr. 21 — Related Newsline story, Mar. 17 — Related Newsline story, July 16, 2007 — Related Newsline story, Aug. 15, 2006.
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