Adelphia Communications Scandal Essay example
Adelphia Communications Company was a television cable company whose headquarters centered in Coudersport, Pennsylvania. It ranked as the fifth most prestigious cable companies in United States. John Rigas is the founder of the company. The company was highly respected until an infamous scandal ensued following claims of bankrupt in 2002, at which time its headquarters relocated to greenwood Village, Colorado. According to Jefferson (2007), after the ensuing controversial legal proceedings ended, the company’s assets were liquefied. Time Warner Cable acquired most of the company’s assets in 2006. LFC auctioned the rest of the assets. Pioneer …show more content…
The family realized that they needed to produce financial statements that accounted for the large sums of missing funds. Therefore, they inflating the company’s earnings falsified its operation performance and concealed the family’s self-dealings in bid to avoid raising Wall Street’s and shareholders suspicions. They fraudulently increased Adelphia’s routine operational expenses to cover for the funds wrongfully acquired. As the scandal intensified, John Rigas resigned from Adelphia alongside his three sons, Tim, Michael and James. The scandal escalated until John Rigas and one of his sons, Timothy, were arrest and prosecution of fraud. The court found them guilty.
Ethical issues arising from the incident
Several ethical issues emerge from Adelphia scandalous incidence. An organization’s management is the custodian of the company’s ethical standards (Lowenstein, 2004). According to conventional corporation’s ethical conduct guidelines, organization’s executives and managers should conduct themselves in an ethically acceptable manner. Considering Adelphia’s scandal, two main ethical issues involving the company, Rigas family and Deloitte present. The first key