The Business of Maintaining American Business

The Business of Maintaining American Business

Gary Kemper, of Banks, Oregon, could picture his retirement just four years away. At the age of 58, Gary and his wife Jeanine had paid off their cars, house, and raised four children all while dumping the maximum amount of money into Gary's 401K retirement plan. They had plans of buying a motorhome and maybe a condo in Arizona to get away from the cold weather of Oregon. He opted to take that part of his salary in stock options. Things were looking good, Gary could of never known that the company he worked for, Enron, was about to fall apart. Enron, the seventh largest corporation in the nation, who's stock once traded at $90 a share plummeted to 26 cents. Gary lost approximately $200,000. Gary was one of the luck ones to receive a portion back. Many of Enron's employees were left with next to nothing (Franklin par. 1-3). With tighted government regulation, this sort of corruption can be stopped.

"Being 'within the law' doesn't cut it in this ever-more-complicated world," commented Barbra Ettore, journalist for Management Review magazine (par. 3). White-collar crime is an offence that everyone should be concerned with. People want to know that the businesses they purchase from and invest in are honest and obey the laws that are set for them. Jeffery M. Kaplan, an attorney with the New York based law firm, Arkin Schaffer & Supino, summed up the dilemma that the nation is facing, "...both the costs of crime and the costs of punishment are--including the impact of shareholders, consumers, and employees--have become too high for society to hear" (qtd. in Ettore par. 4). It would be nice to say that the crimes of today are isolated not representative of business in the past, but such a statement would not be true. The past has shown cycles of crime that run from decade to decade. In the '60s there was bid-rigging by electrical companies, in the '70s there was illicit payments abroad by huge government contractors, in the '80s there was massive insider trading scandals and banking abuses, in the '90s, brokerage scandals (Ettore par. 9). All these examples point to the enduring problem of dishonesty in the business world that affects everyone in the country.

Several measures have been taken to punish and prevent white-collar crime. On July 30, 2002, President Bush signed the Sarbanes-Oxley Act into law (The Lawyer par.1). This law increases the liability and exposure of executives in public companies along with their lawyers. This comprehensive law expands its reach by not distinguishing between US and Non-US companies. So wether the company is based in Ireland or Idaho the Sarbanes-Oxley Act can apply its power (The Lawyer par. 2). Specifically, the act created a new crime for securities fraud, which has a 25 year maximum penalty, along with new penalties for document destruction (The Lawyer par. 3,4). The act also grants the Securites and Exchange Commission, or the SEC, power to freeze accounts during an investigation (The Lawyer par. 7). In addition to the government law, The New York stock exchange has also enacted measures to stop corporate dishonesty, but from a different standpoint. They have chosen to work from the inside out, by a more ethical approach. While it is not law, the NYSE has required all listed companies to create and in some cases re-write a code of ethics for their employees and boards (Stern par. 2). Though these steps show progress in the right direction, more regulation is still needed.

Without a strong and involved government in business history will repeat itself. By learning from the past and re-regulating business along with holding the CEO's and other executives accountable for the practices the incident of white-collar crime will significantly decrease. Twenty years ago major corporation led a major campaign to limit the power of the government in business. With the election of Ronald Reagan, a presidential task force was creadet to remove government oversight and limit accountability of executives of corporation to the general public (Levinson 16). At the end of the