Recent incidences of corporate or banking scandals Essay

Recent incidences of corporate or banking scandals - Essay Example The stakeholder and societal implications were all negatively reflected towards that corporation and Mozilo himself. This is because the stakeholders of the company both primary and secondary lost faith in its operation. The secondary stakeholders were bitter and castigated the role of Mozilo in the subprime mortgage crisis. The stakeholder lost the trust they had in the corporation as the next few days the Country Financial was on the national spotlight concerning the friends of Angelo. The societal implications are that the Country Financial lost its entire business acumen in a single fault. It was now associated with many fraud and corruption on a large scale. Mozilo compensation had earlier come under scrutiny. Angelo Mozilo was charged by the U.S. Exchange and Securities Commission with securities fraud and insider trading. This made the societal implication on the corporation lead to tarnishing of the company’s name. Also, it led to the nationwide problem with the mortga ge crisis and this had adverse societal implications. It negatively affected the mortgage sector. The source of those scandals The source of the scandal can be termed as improper assessment on the part of the auditors. Additionally, there has been separation of ownership and management for corporations. This is strategically seen in that the management that was supposed to oversee the actions of the chief executive officer Angelo Mozilo was not working. This management is obviously the United States government that was actually working with the culprits in establishment of these particular noncompetitive rates at the well known Countrywide Financial. There...This has gone on to be a major problem since the level of control by politicians on leaders and presidents of large companies is overwhelming. This in the end of the day makes the managers, CEOs and the chief executives like Angelo seem weaker and puppet to these politicians. This makes them to go cahoots with them since they do not have a choice or the deals are very sweet. This should be limited thoroughly by the use of legislation and policies that are relevant and applicable with this particular matter. The degree of this fraud crime was very colossal. Angelo Mozilo was charged fines that amounted to $67.5 million and was forced to accept a lifetime ban. This ban was implemented so that he will never serve as a director or officer of any public or private company. This is a meager settlement with the Securities and Exchange Commission since he is one of the people responsible directly for the 2008 financial crisis. He should have been jailed without any chances of parole so as to teach the rest of the CEOs and the directors of public companies not to repeat the same mistake again. Civil settlements should not have been applied in this scenario. This is because the event of the $67.5 million settlement saw to it that $20 million was paid by Countrywide Financial. This is because there was an indemnification agreement that existed between Countrywide Financial and Angelo’s employment contract.