Friends Of Angelo – Coursework Example
Friends of Angelo al Affiliation) In Countrywide financial fraud, there emerged loans that led to a financial crisis. The fraud occurred through a loan program operated by Angelo Mozilo. He was the CEO and Chairman of Countrywide-the core leadership. Countrywide leadership gave special loan terms and benefits to Members of Congress and other influential people of the society. Law prohibits such benefits provided the beneficiaries are employees of the entities offering the gifts. The beneficiaries have an obligation to disclose their relationship with company, in order to avoid a conflict of interest. Members of the senate became “Friends of Angelo” after receiving loans at discounted rates. In situations where the loan terms are not available to the public, acceptance of loan discounts is not allowable. This led to the approval of the Ethics in Government Act and the introduction of new rules of ethics (Ferrell, Fraedrich, & Ferrell, 2011).
The Countrywide fraud affects the society negatively. Members of the society tend to emulate the misconduct evident in the fraud case. This is due to the financial benefits they speculate to achieve. The employees of the company who engaged in the fraud had their services terminated. Such members become a negative influence to the rest of the society due to their unemployment situation. The stakeholders could withdraw their interest with the company. This could have a negative impact to the economy. The company should ensure Maximum Corporation with the stakeholders. This is to ensure that is safeguards the rights of the stakeholders to avoid potential conflicts and litigations (Goldman, 2010). The mortgage fraud benefited a few stakeholders whereas the company’s policy is to ensure all stakeholders benefit equally in accordance to their shareholding.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: ethical decision making and cases (8th ed.). Mason, OH: South-Western Cengage Learning.
Goldmann, P. (2010). Fraud in the markets: why it happens and how to fight it. Hoboken, N.J.: Wiley.