Financial Malfeasance Research Articles

Religious Otherness and National Identity in Scandinavia, c. 1790–1960: The Construction of Jews, Mormons, and Jesuits as Anti-citizens and Enemies of Society

Religious Otherness and National Identity in Scandinavia, c. 1790–1960: The Construction of Jews, Mormons, and Jesuits as Anti-citizens and Enemies of Society

Stay vigilant, prepared to address alleged misconduct if it arises

These days it doesn't take long to find headlines detailing fraud, embezzlement and other financial malfeasance at a nonprofit organization—as well as numerous other types of complaints and allegations of impropriety that can paint an ugly picture for the public. In fact, investigations of misconduct may be the thing most dreaded by nonprofit executive directors and their boards, who are ultimately responsible for the management of the organization.

Simple steps help avoid fraud

Instances of fraud and financial malfeasance in the nonprofit sector are, unfortunately, not hard to come by. Neither, thankfully, are strategies to help ward off fraud by keeping on top of the organization's finances. But that requires an engaged board of directors.

Basic safeguards can help avoid fraud

There have been plenty of examples of fraud and financial malfeasance in the nonprofit sector in recent years—some involving pretty major losses for charities. Thankfully, there are also plenty of ways in which engaged nonprofit boards can help ward off fraud by keeping on top of their organization's finances.

The Interaction Effect of Independent Boards on Corporate Governance-Corporate Social Responsibility (CG-CSR) and Performance Nexus

The financial crises over the past two decades were identified as the main reason for the economic collapse. Malaysia suffered the same fate when many organisations crumpled from inappropriate compliance of governance mechanisms and corporate social responsibility (CSR) disclosure practices. Given this condition, this study intends to examine the effects of governance mechanisms and CSR practice on firm performance and the moderating effect of board independence is investigated on corporate governance-CSR (CG-CSR) and performance nexus of 588 Malaysian companies listed on Bursa Malaysia between 2006 and 2017. Both accounting-based (ROA) and market-based (Tobin’s Q) performance measures have been used for measuring performance. Dynamic model using Generalized Method of Moments (GMM) has been employed on the dataset to control for potential endogeneity, reverse causality, and dynamic heterogeneity. Findings indicate that ownership concentration negatively affects ROA; chief executive officer (CEO) duality positively affects ROA and negatively affects Tobin’s Q. Moreover, investment on CSR is negatively related to both performance measures. Finally, board independence negatively moderates the CG mechanisms, CSR practice, and performance relationship. Findings of the study have implications for Bursa Malaysia and Securities Commission Malaysia to reset the limit of independent directors on board so that their unnecessary interference in operations of management may be avoided. Furthermore, companies need to reassess their CSR strategies whether they are spending on CSR activities or hiding their financial malfeasance in the name of investment on CSR.

Assessing the Governance Mechanisms, Corporate Social Responsibility and Performance: The Moderating Effect of Board Independence

This article serves two purposes. First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility (CSR) practice on firm performance. Second, the moderating role of board independence is investigated on 588 non-financial Malaysian firms listed on Bursa Malaysia during the period 2006–2017. Both accounting-based return on assets (ROA) and market-based (Tobin’s Q) performance measures have been used for measuring performance. Dynamic model using Generalized Method of Moments (GMM) has been employed on the data set to control for potential endogeneity, reverse causality and dynamic heterogeneity. Findings indicate that ROA is a better determinant of firm performance than Tobin’s Q, where ownership concentration, managerial ownership and money spent on CSR negatively affect ROA; however, an insignificant relationship is observed with Tobin’s Q. Finally, board independence negatively moderates governance-CSR and firm performance relationship. Findings of this article have implications for Bursa Malaysia and Securities Commission Malaysia to reset the limit of independent directors on board so that their unnecessary interference in operations of management may be avoided. Furthermore, companies need to reassess their CSR strategies whether they are spending on CSR activities or hiding their financial malfeasance in the name of money spent on CSR.

Edo Marković (1885. – 1939.)

U radu se na temelju arhivske građe, tiska, historiografske i memoarske literature rekonstruiraju biografski detalji iz života Ede Markovića, agronoma, bankara, javnoga radnika, člana Narodnoga vijeća Slovenaca, Hrvata i Srba te rotarijanskoga aktivista i generalnoga direktora državnoga monopolskog poduzeća za otkup i izvoz poljoprivrednih proizvoda. Posebna pozornost posvećena je „beogradskoj fazi” njegova života, profesionalnom angažmanu, međunarodnim aktivnostima i mjestu u poslovnim i političkim krugovima Kraljevine Jugoslavije te mogućim motivima njegova ubojstva, koje je počinila jugoslavenska policija 1939., a u tadašnjoj javnosti predstavljeno je kao „nesretan slučaj”.

SARBANES-OXLEY AND THE THEORIZED MISSING LINK: CEO-BOARD POWER

ABSTRACT The Sarbanes-Oxley Act (SOX) is considered one of the most significant securities legislations since the post-1929 stock market collapse. Yet, it appears to have failed to meet one of its presumed primary objectives of stimulating truly independent and proactive boards of directors in most publicly traded corporations. This study proposes that a key missing component of the act was its failure to more directly address the issue of CEO board-dominance. A range of high-profile corporations engaged in fraud, financial malfeasance, and other corporate misbehaviors since the enactment of SOX were highlighted. Studies of corporate boards, SOX, and CEOs are reviewed and a significant gap in the literature is identified. Few empirical studies exist into the relationship between CEO dominated boards and firm performance. A proposed three-factor model for measuring CEO power is introduced and demonstrated by applying it to nineteen large financial institutions. Results suggest that firms with CEO dominated boards paid its CEOs in the top tier while providing shareholder returns that were in the bottom tier of their industry. Further, every firm in this underperforming category practiced duality. Keywords Sarbanes-Oxley, Duality, CEO Compensation, Directors, CEO-Board Power

The Real Wolves of Wall Street: Examining Debt, Austerity, and Accountability through the Lens of Primitive Accumulation

ABSTRACTThis article looks debt and austerity as a contemporary form of primitive accumulation. Marx saw that the transition from feudalism to capitalism was accomplished not only by enclosures and the enslavement of peoples of the Americas and Africa; it required an ensemble of ideas and stories that justified these actions. Today’s expropriation by debt also requires public discourses and cultural productions that work in concert with the coercive mechanisms of the state to protect the interests of the rentier class and shift accountability for financial malfeasance to others. It examines the ascendency of neoliberal economic policies in the United States, and then it examines the narratives that accompanied it through three feature films about finance. These films construct dual images of masculinity that portray men as either the “bad boys” of Wall Street, or their obverse, sober and responsible guardians of the financial order. They contribute to a public discourse in which insider trading and stock market manipulations are not, in and of themselves, blameworthy. What is blameworthy is a particular type of failure, and it is this discursive move that allows both the moral culpability and economic consequences of debt to be shifted from the elites to others.

Social Networking and Leadership Accountability in (Quasi) Secret Organizations

Almost a century ago, United States Supreme Court Justice Louis Brandies articulated an insightful analysis in a Harper’s Weekly article titled What Publicity Can Do.1 He noted that “[p]ublicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” Justice Brandeis’s idea vis-a-vis the virtues of publicity had germinated more than two decades prior when he expressed an interest in writing a companion piece to his article The Right to Privacy. This time, however, he would focus on the duty of publicity. He noted that he had been thinking “about the wickedness of people shielding wrongdoers & passing them off (or at least allowing them to pass themselves off) as honest men.” His proposed remedy was that, “[i]f the broad light of day could be let in upon men’s actions, it would purify them as the sun disinfects.” Fortunately, we live in an era in which organizations have difficulty keeping their conduct in the dark. The Sarbanes-Oxley Act and whistleblower protection laws amplify the sunlight cast upon organizations. But there are, for a range of reasons, organizations that operate in the shadows — possibly due to the law but certainly due to internal dynamics. A classic example is black Greek-letter organizations (“BGLOs”). These organizations, with their secret rituals and yet public operations, are now more than one century old and have a membership that is a veritable who’s who in black American achievement. In the past few years, several of these organizations have been rocked by scandals about their national presidents engaging in financial malfeasance with organization funds. What is more interesting is that members have had tremendous difficulty addressing these issues. There are, after all, a number of organizational dynamics that might constrain BGLO members from being able to hold their leadership accountable for financial malfeasance. This Article contends that where organizational mechanisms militate against leadership accountability, (quasi) secure social networking sites may be the best hope for (quasi) secret organization members to hold their leaders accountable.

Patronage and health care in eighteenth-century Irish county infirmaries

AbstractThe creation of a network of county infirmaries was a remarkable achievement in late eighteenth-century Ireland. Supported by grants from parliament and the county grand juries, each hospital was managed by governors whose subscriptions entitled them to appoint the medical staff and decide on the patient population. While the laudable aim of the legislators was that the infirmaries would be ‘a means of restoring the health and preserving the lives of many’, the reality was quite different. In 1788 the prison reformer, John Howard, and the inspector general of prisons, Sir Jeremiah Fitzpatrick, delivered a damning report to parliament on the state of the county infirmaries. They described good care and governance in a minority of institutions, but most were in a very bad state; they noted decayed and broken buildings, dirty or no bedding, poor food, lack of regulation, financial malfeasance, few patients and absent staff. Based on their report, this paper argues that the county infirmaries benefited the governors and the staff considerably, and had little impact on the health of the nation. However, providing a hospital and trained medical professionals in every county was a significant step in the formation of the Irish institutional healthcare system.

Kanoniczne sankcje karne za przestępstwa majątkowe

Financial malfeasance, both in the eld of administration and alienation of ecclesiastical goods might contribute to nancial losses, unnecessary scandal of the faithful, as well as the weakening of public trust. In order to prevent such malfeasance, the Church must seek eective methods which will allow to observe the canon law. e aim of this article was to show the penalties for the nancial malfeasance in the canonical legal system. Interestingly that ecclesiastical legislator does not use the concept of „nancial malfeasance”. However, we can nd nine examples of nancial malfeasances in Book VI of the 1983 Code. e following actions can be related to nancial malfeasances: 1) impeding the use of ecclesiastical goods (can.1375), 2) invalid alienation of ecclesiastical goods (can. 1377), 3) simony (can. 1380), 5) illegitimate prot from Mass oerings (can. 1385), 6) bribery (can. 1386), 7) abuse of authority and culpable negligence in performing act of ecclesiastical power or ministry or oce (can. 1389 §1-2), 8) production and use of false documents (can. 1391), 9) clerics carrying out commercial activities (can. 1392).For such oenses, the legislator determines penalties ferendae sententiae which may be imposed on the oender by judicial or administrative process. e legislator does not provide for penalties latae sententiae for nancial malfeasances. For simony and illegitimate prots from Mass oerings leg- islator provides for a penalty of imposing censure. In the case of simony is mandatory sanction (c. 1380), while for the oense of illegitimate prots from Mass oerings is optional one (can. 1385). It can be supposed that the most severe penal sanctions for nancial malfeasance is deprivation of oce that the judge may impose, depend- ing on the severity and harm done. is is an optional penal imposed for abusing of ecclesiastical power or an oce (can. 1389 § 1). In other cases, the ecclesiastical legislator provides for a just penalty ferendae sententiae. If penalties are indeterminate their imposition belongs to the Ordinary or judge. e particular law is to be observed which in place of indeterminate penalty ferendae sententiae it may establish a penalty determined or obli- gated (can. 1315 § 1). In accordance with can. 1317 particular law can not establish a penalty of dismissal from the clerical state.

Central Asia’s Globalized Despots

Central Asia’s Globalized Despots Marlene Laruelle (bio) Dictators Without Borders: Power and Money in Central Asia. By Alexander Cooley and John Heathershaw. Yale University Press, 2017, 312pp. Alexander Cooley and John Heathershaw’s new book marks a milestone in the study of Central Asia and of the post-Soviet space more broadly. Beyond area studies, Dictators Without Borders offers thought-provoking reflections on the mechanisms of political and financial globalization, and on the erasure of what distinguishes “the West” from “the rest.” Grounded in a pathbreaking examination of materials from U.S. and European judicial investigations into the offshoring mechanisms and extraterritorial activities of Central Asian presidential families, the book combines scholarly analysis, investigative journalism, and policy recommendations. It begins by arguing that, contrary to the conventional wisdom of Western pundits and international organizations, Central Asia is not a remote place that is detached from the rest of the world and in need of greater “connectivity.” On the contrary, it contends that Central Asian states—and in particular their elites—are in fact highly globalized and well integrated in the world economy. They have learned quickly and well how to use international mechanisms that serve their political, security, and financial interests. Cooley and Heathershaw’s case studies of Central Asia’s globalized elites include the fallen Kazakhstani oligarch Mukhtar Ablyazov, whose turn toward opposition helped to make him an “obsession” of long-ruling President Nursultan Nazarbayev; Maksim Bakiyev, son of [End Page 173] Kyrgyzstan’s former president Kurmanbek Bakiyev; Gulnara Karimova, daughter of Uzbekistan’s late president Islam Karimov; and the presidential Rahmon family of Tajikistan. Probably the most fascinating case is that of Ablyazov, whom Cooley and Heathershaw call “Kazakhstan’s most wanted.” Chair of Kazakhstan’s first bank (called BTA) from 2005 to 2009, Ablyazov was once one of Kazakhstan’s top oligarchs, but has also been a foe of President Nazarbayev since the early 2000s. After Kazakhstan’s sovereign wealth fund, allegedly overseen by the president’s family, took control of BTA in 2009, the bank launched legal proceedings against Ablyazov. The toppled oligarch fled first to London and then to France, where he was arrested and nearly extradited. His supporters present him as Kazakhstan’s version of the formerly imprisoned Russian oligarch Mikhail Khodorkovsky, punished by an autocrat for funding his liberal opponents. Kazakhstan’s authorities call him an international criminal and fugitive, guilty of massive money-laundering. The presidential families in other Central Asian republics have themselves been the perpetrators of offshoring strategies, of which Cooley and Heathershaw offer detailed portraits. Tajikistan’s President Emomali Rahmon, who built his power during his country’s civil war (1992–97), appears to have enabled the offshoring of profits from the state-owned Talco aluminum-smelting plant to the British Virgin Islands. The state that Rahmon heads is estimated to have lost US$1.1 billion in revenue to this trading scheme from 2005 to 2007, a stunning sum, as Cooley and Heathershaw point out, for a country whose GDP in that latter year was only $3.7 billion. These arrangements came to light in a London High Court dispute between Talco’s new controllers and a firm that Tajikistani authorities together with presidential associates had ousted from the smelting plant’s business in 2004. The case dragged on from 2005 until 2008, as each side charged the other with financial malfeasance. Total legal expenses may have run as high as $200 million, making it one of the costliest court battles ever waged. Tajikistan’s government paid most of the bill. In Uzbekistan, it is the eldest daughter of the former president Islam Karimov, Gulnara Karimova, who built a vast commercial empire with her homeland’s wealth before seeing that empire dismantled amid transnational legal troubles, public scandal, and elite infighting in late 2013 and early 2014, when Uzbekistani authorities reportedly put her under house arrest. Despite Uzbekistan’s political closure and isolationist economic policies, the country’s elites became actors in a global drama that involved luxury villas in France, Belgium, and California; a New York court hearing; Swiss bank accounts; and Swedish media investigations. Cooley and Heathershaw also profile Maksim Bakiyev, the son of Kyrgyzstan...

Don't Cosplay with My Heart by Cecil Castellucci

Reviewed by: Don't Cosplay with My Heart by Cecil Castellucci Karen Coats Castellucci, Cecil Don't Cosplay with My Heart. Scholastic, 2017 [288p] ISBN 978-1-338-12549-8 $17.99 Reviewed from galleys R Gr. 6-9 Edan has always felt connected to the comic series superheroes Team Tomorrow, [End Page 156] but when her father is sequestered pending a trial for financial malfeasance, she really needs to feel like Gargantua, the team's literally larger-than-life female leader. When she learns about a costume contest at an upcoming con, Edan and her friend Kasumi come up with the idea of a cosplay club. Meanwhile, her mom is seriously depressed, her crush Yuri and his friends are constantly questioning her nerd credentials, and she can't bring herself to tell Kasumi the truth about her dad, especially when she learns that Kasumi's parents are in financial trouble because of what he did. Through Edan's story, Castellucci explores the ins and outs of fan culture, focusing in particular on how fans use their identification with characters and their arcs to understand their own identities and work through difficult circumstances. Edan's narration is interrupted with supposedly nonfictional accounts of the history of the Team Tomorrow comic, a history that both accounts for and corrects, to some extent, the sexism inherent in real comics history while it comments obliquely on Edan's current relationships. In the end, though, Edan learns that just as comics can be rebooted, so can shattered lives; this book makes a strong argument for the therapeutic uses of superheroes and fandoms as it shows insiders and outsiders alike that sometimes wearing a mask is what it takes to reveal who you really are. KC Copyright © 2017 Board of Trustees of the University of Illinois

Do organizational and political-legal arrangements explain financial wrongdoing?

The 2008 financial crisis was a systemic problem with deep-rooted structural causes that created opportunities to engage in financial malfeasance, a form of corporate wrongdoing. However, few quantitative studies exist on the effects of organizational and political-legal arrangements on financial malfeasance. In this paper, we examine the effects of organizational and political-legal arrangements that emerged in the 1990s in the FIRE sector (i.e., financial, insurance, and real estate) on financial malfeasance. Our historical contextualization demonstrates how changes in the political-legal arrangements facilitate the emergence of new corporate structures and opportunities for financial malfeasance. Our longitudinal quantitative analysis demonstrates that US FIRE sector corporations with a more complex organizational structure, larger size, lower dividend payment, and higher executive compensation are more prone to commit financial malfeasance.

'Where You Lead, I Will Follow': Organizational Culture, Unethical Leaders, and Members' Deviance

Hazing has been a persistent issue within African American fraternities and sororities. What makes the topic interesting vis-a-vis the law is that American society has become increasingly litigious; as such, these organizations and their members have faced a growth in the number of hazing-related civil lawsuits since the 1980s. Even more, individual members have had to confront the increasing criminalization of hazing. Outside of the law, but equally important to the understanding of hazing’s legal implications with respect to these organizations are two factors: One is that hazing is particularly violent within African American fraternities and sororities, especially the former, thus serving as an impetus for litigation. The other is the nature and structure of these organizations - highly active and engaged alumni membership. That being said, it is not unusual to observe a vast majority of these organizations’ active (dues-paying, officers, convention attendees) members being alumni, even well into their 70s, 80s, and 90s. This article explores an aspect of African American fraternity and sorority culture that may help explain the nature of hazing within these organizations and why it persists, especially among undergraduate members. Specifically, the article contends that (1) intra-organizational secrecy, (2) poor checks and balances with respect to powerful members, and sanctioning of whistleblowers explain why unethical, and even illegal, behavior may persist within these organizations. This article largely explores how these factors are most evident in instances where the national heads of a number of these organizations engaged in financial malfeasance and either were not held accountable or were slow to being held accountable. Accordingly, as the article argues, if this is a problem amongst accomplished, older members it should not be surprising that such factors manifest themselves amongst teenagers and young-adults.

Unintended? The effects of adoption of the Sarbanes‐Oxley Act on nonprofit organizations

AbstractThis article investigates the benefits and costs to nonprofit organizations emanating from the adoption of the Sarbanes‐Oxley Act (2002). The act was intended to stem financial malfeasance in the for‐profit sector; nevertheless the article finds that about half the surveyed nonprofits adopted provisions of the act and experienced effects in proportion to the level of adoption. About one in four of the nonprofits attributed benefits of better financial controls and reduced risk of accounting fraud to the adoption of the Sarbanes‐Oxley Act. More than one‐third of the nonprofit organizations reported increased fees for external audit, and about 15 percent cited “reallocation of resources from program to administrative expenses.” This article discusses the unintended positive and negative effects of public policy on nonprofit organizations.

The Impact Of Sarbanes-Oxley Act

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: "Times New Roman","serif";"><span style="font-size: x-small;">The Sarbanes-Oxley Act (SOX) was signed into law in July 2002, with the express purpose of restoring public confidence in corporate financial statements. Prior to the enactment of Sox, investors suffered significant losses due to corporate failures brought on by financial malfeasance.<span style="mso-spacerun: yes;">  </span></span><strong></strong></span></p>

Jimmy Stewart is dead: ending the world's ongoing financial plague with limited purpose banking

Foreword by Jeffrey Sachs. Preface. Acknowledgments. Chapter 1. It s a Horrible Mess. Chapter 2. The Big Con: Financial Malfeasance, American Style. Chapter 3. Uncle Sam s Dangerous Medicine. Chapter 4. This Sucker Could Go Down . Chapter 5. Limited Purpose Banking. Chapter 6. Getting from Here to There. Chapter 7. What About? Chapter 8. Conclusion. Afterword. Fixing the Rest of Our Economic Mess. Notes. About the Author. Index.

The Effects of Organizational and Political Embeddedness on Financial Malfeasance in the Largest U.S. Corporations

This article examines the causes of financial malfeasance in the largest U.S. corporations between 1995 and 2004. The findings support organizational-political embeddedness theory, which suggests that differential social structures create dependencies, incentives, and opportunities to engage in financial malfeasance. The historical analysis shows that neoliberal policies enacted between 1986 and 2000 resulted in organizational and political structures that permitted managers to engage in financial malfeasance. Our quantitative analysis provides three main findings. First, capital dependence on investors creates incentives to engage in financial malfeasance. Second, managerial strategies to increase shareholder value create incentives to engage in financial malfeasance. Third, the multilayer-subsidiary form and the political structure permitting corporate PAC contributions create opportunities to engage in financial malfeasance. These findings have important implications for public policy; the corporate and state structures enacted in the late-twentieth century were the outcome of a long-term, well-financed, and systematic political strategy that provided managers with unprecedented power, autonomy, and opportunity to engage in financial malfeasance.