Research Topics with Explanation SHOULD THE GOVERNMENT PROVIDE FINANCIAL ASSISTANCE TO PEOPLE WHOSE RETIREMENT FUNDS WERE INVESTED IN STOCK OF COMPANIES THAT MAY HAVE USED UNETHICAL ACCOUNTING PRACTICES? Name: Richard Hepburn Assignment 4 Persuasive Paper Part 2, Solution and Advantages 
Strayer University
 Research & Writing EGN215041VA016 Professor Michael White Date: 02/20/17 December 02, 2001 is a day that will go down in history for many people, it was the day that Enron a U.S energy trading and Utilities Company filed for bankruptcy. This bankruptcy filing changed the lives of many innocent Americans who lost their entire life savings. In late December 2008, a major case of stock and securities fraud was discovered and Bernard Madoff the founder of Bernard L. Madoff Investment Securities was convicted and eventually sentenced to 150 years in prison for running the largest fraudulent scheme in U.S history. New York Times | DIANA B. HENRIQUES and ZACHERY KOUWE | Posted 05.25.2011 | Business. Both of these schemes negatively affected the financial, social, health, and economic lives of thousands of people who depended on the expertise of these companies to invest their retirement savings adequately. These unfair practices lead me to believe that there is no accountability for these crimes and the government, therefore, has a responsibility to the public as a whole, and to the numerous people who have lost their life savings to the unscrupulous accounting practices of many professional investors and financial institutions. My first concern leads me to believe that nobody is keeping a watchful eye on any of these big corporations who continues to mishandle the retirement savings of the American citizens who work so hard to put away their life savings for a better future. What was the Enron culture? The Wall Street Journal of 26 August 2002 captured the essence of Enron’s culture, as the expression of the personalities of its senior management (Raghavan et al., 2002). A Lucite cube on the desk of Chief Financial Officer Andrew Fastow read: ‘rip your face off.' Add Jeff Skilling’s penchant for extreme sports, and a picture of an aggressive culture begins to form. The Wall Street Journal reporters observed ‘It [Fastow’s cube] was a characteristic gesture inside Enron, where the prevailing corporate culture was to push everything to the limits: business practices, laws and personal behavior’ (Raghavan et al., 2002). Enron Corp is a company that reached dramatic heights, only to face a dizzying collapse. The story ends with the bankruptcy of one of America's largest corporations. Enron's collapse affected the lives of thousands of employees and shook Wall Street to its core. At Enron's peak, its shares were worth $90.75, but after the company had declared bankruptcy on December 2, 2001, they plummeted to $0.67 by January 2002. To this day, many wonder how such a powerful business disintegrated almost overnight and how it managed to fo ...

1. Research Topics with Explanation
SHOULD THE GOVERNMENT PROVIDE FINANCIAL
ASSISTANCE TO PEOPLE WHOSE RETIREMENT FUNDS
WERE INVESTED IN STOCK OF COMPANIES THAT MAY
HAVE USED UNETHICAL ACCOUNTING PRACTICES?
Name: Richard Hepburn
Assignment 4 Persuasive Paper Part 2,
Solution
and Advantages
Strayer University
Research & Writing EGN215041VA016
Professor Michael White
Date: 02/20/17
December 02, 2001 is a day that will go down in history for
many people, it was the day that Enron a U.S energy trading and
Utilities Company filed for bankruptcy. This bankruptcy filing
changed the lives of many innocent Americans who lost their
entire life savings. In late December 2008, a major case of

2. stock and securities fraud was discovered and Bernard Madoff
the founder of Bernard L. Madoff Investment Securities was
convicted and eventually sentenced to 150 years in prison for
running the largest fraudulent scheme in U.S history. New York
Times | DIANA B. HENRIQUES and ZACHERY KOUWE |
Posted 05.25.2011 | Business. Both of these schemes negatively
affected the financial, social, health, and economic lives of
thousands of people who depended on the expertise of these
companies to invest their retirement savings adequately. These
unfair practices lead me to believe that there is no
accountability for these crimes and the government, therefore,
has a responsibility to the public as a whole, and to the
numerous people who have lost their life savings to the
unscrupulous accounting practices of many professional
investors and financial institutions.
My first concern leads me to believe that nobody is keeping a
watchful eye on any of these big corporations who continues to
mishandle the retirement savings of the American citizens who
work so hard to put away their life savings for a better future.
What was the Enron culture? The Wall Street Journal of 26
August 2002 captured the essence of Enron’s culture, as the
expression of the personalities of its senior management
(Raghavan et al., 2002). A Lucite cube on the desk of Chief
Financial Officer Andrew Fastow read: ‘rip your face off.' Add
Jeff Skilling’s penchant for extreme sports, and a picture of an

3. aggressive culture begins to form. The Wall Street Journal
reporters observed ‘It [Fastow’s cube] was a characteristic
gesture inside Enron, where the prevailing corporate culture was
to push everything to the limits: business practices, laws and
personal behavior’ (Raghavan et al., 2002). Enron Corp is a
company that reached dramatic heights, only to face a dizzying
collapse. The story ends with the bankruptcy of one of
America's largest corporations. Enron's collapse affected the
lives of thousands of employees and shook Wall Street to its
core. At Enron's peak, its shares were worth $90.75, but after
the company had declared bankruptcy on December 2, 2001,
they plummeted to $0.67 by January 2002. To this day, many
wonder how such a powerful business disintegrated almost
overnight and how it managed to fool the regulators with fake,
off-the-books corporations for so long. ( Investopedia).
I believe that all Americans deserve the best economics
protection, with laws and regulations that will guarantee them a
safe return on their life savings. One of the best legislation in
place to protect citizens and their life savings is The Advisers
Act. This is the last legislation in a series of federal statutes
intended to eliminate abuses in the securities industry that
Congress believed contributed to the stock market crash of 1929
and the depression of the 1930s. The Act is based on a
congressionally mandated study of investment companies,
including consideration of investment counsel and investment

4. advisory services, carried out by The U.S. Securities and
Exchange Commission (“SEC”). The SEC’s report traced the
history and growth of investment advisers and reflected the
position that investment advisers could not properly perform
their function unless all conflicts of interest between them and
their clients were removed. The report stressed that a
significant problem in the industry was the existence, either
consciously or, more likely, unconsciously, of a prejudice by
advisers in favor of their own financial interests. The SEC
needed to enforce stricter regulation to eliminate, or at least
expose, all conflicts of interest that might cause advisers,
consciously or unconsciously to render advice that is not
disinterested. There are particular questions that the SEC should
ask. Who is an “investment adviser?” Must investment
advisers register with the SEC? Who must register under the
Act? How does an investment adviser register under the Act?
What are the requirements applicable to an investment adviser
registered under the Act? The advantage of these rules and
questions is that it will help to block certain unqualified
individuals from entering into the investment environment. It
will also minimize the harm to investors who place their trusts
and life savings in the hands of professionals hoping for a good
return on their nest eggs.
My next concern is about the embezzlement and the
deceptive practices that continue to plague our society. These

5. unfair practices lead me to believe that there is no real
accountability for these crimes and I believe that the
government is not doing enough for citizens who finds
themselves trapped in these schemes. The role of the
government is to protect the public and ensure a fair practice for
all people. Numerous individuals have lost their life savings to
the unscrupulous accounting practices of many professional
investors and financial institutions. Stock or securities fraud is
a deceptive practice that is related to the stock market and is
designed to entice investors to buy or sell stocks or
commodities based on false information. Stock or securities
fraud can include a wide array of deceptive practices such as
embezzlement, insider trading, stock manipulation,
misstatements on a company’s financial statements, or lying to
corporate auditors. When the massive Ponzi scheme of Madoff
collapsed, many charities, universities and wealthy individuals
who in total lost over twenty billion dollars felt its effects
immediately. The result of this fraud is more widespread and
goes far beyond the direct investments that were lost by the
thousands of victims.
Embezzlement comes in many forms, mostly by the blind trust
we place in people to do the right thing in times of challenge,
and by faith, we place in the organization our trust to do the
right thing. Embezzlement often involves some senior member
of the organization who has single access to the foundation’s

6. finances. It often includes a person who has been on staff for a
long time and has developed a high level of trust, so no one
asks questions or evaluates their work. The government can put
a stop to this by implementing laws that all organizations must
adopt to prevent these practices. A great place to start is to
have a financial management structure with a separate audit
committee, and an independent finance committee.
Audits can serve as a deterrent to many fraud and/or
embezzlement. These inspections need to be conducted as a
surprise to deter fraud and embezzlement from happening. An
audit provides an “opinion as to whether the financial
statements are fairly stated and comply in all material respects
with Generally Accepted Accounting Principles. Embezzlement
in most company spans over an extended period, and in
actuality, it is a cover up to what is taking place. Therefore, it
is imperative to maintain a dual control process so that no one
person can have access to certain financial systems. Never give
people sole control over the company’s finances without an
independent party to view the balance sheets and statements to
show accountability. It is vital to maintain a proper financial
management structure with independent oversight in place, and
this will hold individuals accountable for their actions and
promote a safer sound foundation for all who involve.
Unfortunately, the US government seems to have fallen
asleep once more when the housing market took a dive causing

7. more people to lose their retirement in their homes. By the end
of 2007, real house prices had fallen by more than fifteen
percent from its peak. The prices of homes in many of the most
over-valued markets, primarily along the two coasts, had fallen
by more than twenty percent. Furthermore, the rate of price
decline was accelerating, with prices in these cities falling at
more than thirty percent in annual rate at the beginning of 2008.
The rate of price decline in the Shiller indexes implies that real
house prices will be down by more than thirty percent from
their 2007 peaks by the end of 2008. This would mean a loss of
more than $7 trillion in housing bubble wealth (approximately
$100,000 per homeowner). The lost money is almost equal to
fifty percent of Gross Domestic Profit (GDP). There is no way
that an economy can see a loss of wealth of this magnitude
without experiencing severe financial stress. This is based on
the Case-Shiller U.S. National Home Price Index.
It is important that everyone insures themselves against all
financial frauds such as identity fraud, and everyone must be
vigilant about their finances. It is best to use some basic
common sense practices in protecting personal information and
to use only secure sites. It is also important to choose the
financial institutions and investment companies that can back
you up with high guarantees. Do your due diligence and check
with your bank/investment firms to find out what your liability
would be for fraudulent transactions. Find out about the

8. timeframe in which fraudulent transactions can be reported and
monitor your accounts diligently. In addition to a home, auto,
health, life, disability insurance it is important to get anti-fraud
insurance.
Trust should be earned, it is a best practice before you choose to
invest that you inspect your expectations, and with any
investment, there should always be an independent statement
that comes from a third party, keeping a watchful eye for you.
If an investment, report is received only from a broker, and not
an investment company, that is a huge indication that something
is wrong. A separate statement must be received from the
investment company where the funds are held with a general
customer service number to the home office. Pay attention to
red flags, if something seems too good to be true, it typically is
too good to be true, therefore, pay very close attention to
consistently high investment returns, unregistered securities,
unlicensed sellers, and overly complex transactions. It is tough
to recovery funds or assets that are lost in a financial or
investment fraud thus, the best way to defend from fraud is to
prevent it.

9. References:
https://www.fisherinvestments.com/offers/99-retirement-tips
https://www.dol.gov/agencies/ebsa/laws-and-
regulations/laws/pension-protection-act
http://www.sec.gov/answers/ponzi.htm
https://www.justice.gov/
https://engagingplaces.net/2012/02/19/embezzlement-is-it-our-
dirty-little-secret/
https://www.sec.gov/about/offices/oia/oia_investman/rplaze-
042012.pdf
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