¶ … Business Fraud
In the wake of scandals such as Enron and others, corporate fraud still appears to be prevalent across the business world. The reasons for this can be many and varied, although greed and a sense of hubris appear to be two of the common role players. In other cases, desperation could also be a factor, where a business is in danger of failing and its owners or managers see little choice but to cheat or sing with the boat. In many of the fraud cases, questions regarding regulation also abound, where regulatory authorities appear to be unable to either identify fraudulent activity or to sufficiently monitor the actions of those involved. This appears to be at least partly the case as far as Russell Wasendorf Sr. is concerned, who recently confessed to have committed fraud as the owner of his brokerage for 20 years Huffstutter and Polansek, 2012). This had significant repercussions for both stakeholders and the industry.
According to Wasendorf's confession, business trouble and his "big ego" led to his fraudulent activity during the past two decades. It was, apparently, a choice between seeing the business fold or cheating, and the owner made the decision for the latter. The most immediate effect was shaken trader confidence in the U.S. futures markets, whose worth extends to some trillion dollars.
What is significant is the ease with which Wasendorf was able to commit the fraud. He used little more than a rented P.O. Box, along with Photoshop and inkjet printers to circumvent regulators in a scheme of more than $100 million. At 64 years of age, Wasendorf now faces "decades" in prison, according to U.S. Attorney Peter Deegan (Huffstutter and Polansek, 2012).
The fraud has also taken its toll on Wasendorf himself, who suffered from "constant and intense guilt" as a result of what he was doing. Prior to his arrest, the business owner attempted to commit suicide by inhaling exhaust fumes in his car after confessing to the whole scheme in a suicide note. He did not succeed in the suicide attempt, and was hospitalized instead.
Specifically, Wasendorf began forging bank documents when his business risked failure if additional capital were not made available. According to Huffstutter and Polansek (2012), the fraud lasted almost throughout the lifetime...
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