Day: January 30, 2015

Narcissus Enters the Courtroom: CEO Narcissism and Fraud

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http://eds.b.ebscohost.com.libproxy.smu.edu.sg/eds/pdfviewer/pdfviewer?sid=68eff40e-c507-4a31-80e2-5d1f824f0b67%40sessionmgr111&vid=1&hid=127

Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University

Narcissus Enters the Courtroom: CEO Narcissism and Fraud.

Rijsenbilt, Antoinette1 rijsenbilt@ese.eur.nl Commandeur, Harry2

Journal of Business Ethics. Oct2013, Vol. 117 Issue 2, p413-429. 17p. 8 Charts.

Abstract:

This study explores the aspects of the relationship between possible indicators of CEO narcissism and fraud. Highly narcissistic CEOs undertake challenging or bold actions to obtain frequent praise and admiration. The pursuit of narcissistic supply may result in a stronger likelihood of a CEO to undertake bold actions with potential detrimental consequences for the organization. The sample consists of all S&P 500 CEOs from 1992 till 2008 with more than 3 years of tenure. The measurement of CEO narcissism is based on 15 objective indicators and fits the main conceptualization of narcissism. This data collection provides a score for all S&P 500 CEOs according to their narcissistic tendencies. The Accounting and Auditing Enforcement Releases on the SEC’s website are the indicators of managerial fraud. The findings confirm the expected influence of plausible proxies for CEO narcissism on fraud by showing a positive relationship. This confirms the psychologic perspective of CEO narcissism as a potential cause of fraud.

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[Flashback] Fraud in the Board: The Case of Olympus

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http://www.accaglobal.com/sg/en/discover/ab-articles/business-law/fraud-board.html

Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University

FRAUD IN THE BOARD

Sacked by Olympus for his stand against financial corruption, ex-CEO Michael Woodford describes what happened when he blew the whistle

This article was first published in the January 2013 International edition of Accounting and Business magazine.

With three decades working for a Japanese camera giant under your belt, you are rewarded for leading the growth of the European arm with promotion to company president – the first non-Japanese national ever to hold the post. The fact your new role starts on April Fool’s Day does not seem an omen. Continue reading →

Accounting Fraud and Pump-and-Dump Schemes: Penny Stock Pawnbroker Had a Clever Trick to Get Paid

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http://www.bloombergview.com/articles/2015-01-29/penny-stock-pawnbroker-had-a-clever-trick-to-get-paid

Penny Stock Pawnbroker Had a Clever Trick to Get Paid

JAN 29, 2015 5:55 PM EST

By Matt Levine

A sign of a good scam is that it’s hard to tell who’s being scammed. So here is a charming little story about International Capital Group, which agreed to pay $4.3 million to the Securities and Exchange Commission to settle charges of penny-stock misbehavior. ICG basically ran a pawn shop for penny stocks. Lots of founders/promoters/chief executive officers of tiny public companies own lots of stock in their companies, and not much else. And some of them would like to turn that stock into money.

But controlling insiders can’t sell their stock without registering the sales with the SEC. This requires things like, you know, audited financial statements, which can be a problem if you’re a tiny company with dubious financials. Even more important, registration also means disclosure. And when the founder and chief executive officer and majority shareholder of a tiny company publicly announces that he’s dumping all his stock, that … tends to push the stock price down. The trick is to get money for your stock without telling anyone that you’re selling

Penny

Continue reading →