The paper 'Key Differences and Common Features of the Two Fraud Cases' is a perfect example of a finance and accounting essay. Commonwealth guidelines defined fraud as an act of dishonestly and obtaining benefit through deception or unethical means. Some of the behaviors which may qualify as fraud include; false and providing misleading information. In Australia, one of the common and well-known fraud cases happened in Adelphia Cable Company in late 2002, during the Wall Street crisis. Adelphia was formed in 1952 by John Rigas with a customer base of less than 25; the company grew rapidly in the cable industry and by the beginning of the 1970s the customer base grew to over 6000 customers.
After its incorporation, by late 1980, the company started trading publicly in the stock exchange. The cable industry began weakening by the early 1990s due to high competition in the industry, overcapacity, and slow economic growth consisting of high inflation rates, Mahar and Fischers, (2003). This became a golden opportunity for Adelphia to expand to the internet cable business and in the telecommunication industry.
This ambitious expansion made Adelphia be one of the biggest companies by late 1990.In the year 2002, the first fraud activity was detected in the company operations when the chief finance officer revealed in a conference that a loan of over $2.3billions has been cosigned by another company in which John Rigas was a partner. According to Nazum (2004), this resulted in a criminal inquiry by the board of the stock exchange. The investigation was backdated to 1999. This forced Rigas and his family to resign from the company. The share price of the company drastically dropped from around $28 to close to 78 cents forcing SEC to deregister the company from trading in the stock market Benett et al, (2005).
Due to this, the company was forced to apply for bankruptcy notice in order to reorganize its activities.
Benett, R, J, Thous and Scouten, J (2005), “I deserve more because my name is on the door.”
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