Characteristics of Victims and Perpetrators
Any investor can become a victim, but persons aged fifty years or older are most often victimized, whether as direct purchasers in securities or indirect purchasers through pension funds. Not only do investors lose but so can creditors, taxing authorities, and employees.
Potential perpetrators of securities fraud within a publicly traded firm include any dishonest official within the company who has access to the payroll or financial reports that can be manipulated to:
- overstate assets
- overstate revenues
- understate costs
- understate liabilities
Enron Corporation exemplifies all four tendencies, and its failure demonstrates the extreme dangers of a culture of corruption within a publicly traded corporation. The rarity of such spectacular failures of a corporation from securities fraud attests to the general reliability of most executives and boards of large corporations. Most spectacular failures of publicly traded companies result from such innocent causes as marketing blunders (Schlitz), an obsolete model of business (Penn Central, Woolworth's), inadequate market share (Studebaker), non-criminal incompetence (Braniff).
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Famous quotes containing the words characteristics of and/or victims:
“One of the characteristics of the dream is that nothing surprises us in it. With no regret, we agree to live in it with strangers, completely cut off from our habits and friends.”
—Jean Cocteau (18891963)
“He was warned. And now hes paid. Let him be buried with the other victims of human greed and folly.”
—Cyril Hume, and Fred McLeod Wilcox. Dr. Morbius (Walter Pidgeon)