More Corporate Shenanigans
Corporate governance has taken it on the chin in the past few days. Over the past week:
· The U.S. Justice Department and the Securities Exchange Commission announced an investigation of Hewlett-Packard for allegedly bribing foreign officials to secure a lucrative computer equipment contract in Russia. German and Russian prosecutors are already investigating the matter, which is thought to include bribes totally $10.9 million.
· Private-equity firm Quadrangle Group accused its co-founder Steve Rattner of complicity in a kickback scheme aimed at winning business from New York State's pension fund. Rattner, the Obama administration's former car czar, is suspected of paying millions of dollars in bribes to obtain investment business from the pension fund.
· The SEC filed charges against Goldman Sachs and one of its vice presidents for supposedly falsifying and omitting information about an investment vehicle the company was peddling. The suit accuses the Wall Street bank of selling customers a subprime-mortgage investment, knowing that it would lose value, in order to reap fee income.
News of these latest accusations has re-rattled investors and created speculation that economic recovery might be an illusion. But the real deception is the belief that large companies can be trusted to regulate their own behavior.
Agree or disagree: At the risk of causing Ronald Reagan to roll over in his grave, the government needs to impose greater oversight on big business. I'd like to know your thoughts.
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Take it from someone in a country with much less (or at least less effective) business regulation. It's not the end of the world but businesses large and small do overstep many moral, if not legal, boundaries. I agree with you.
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