Topic > Discussion on the Adelphia Communications scandal?

Introduction In today's competitive and highly volatile marketplace, consumer trust is perhaps the most significant asset a company can have. In the blink of an eye, a company can lose years of progressive reporting and, indeed, economic status, if its reputation is tarnished or, worse, if its corruption is publicly demonstrated. This is a lesson learned the hard way by Adelphia Communications Company, a company valued at $3.6 billion and at the time the sixth largest cable company in the country (Leonard, 2002). This article will examine how Adelphia Communications executives violated the trust of the company's shareholders and the trust of the general public by engaging in unjust enrichment and fraud. These two violations of business ethics will be discussed through the lens of deontological ethics. The discussion of Kant's categorical imperative will be applied to provide further analysis of the two identified ethical issues. The Adelphia Communications Scandal The Adelphia Communications scandal dominated the corporate mainstream in 2002 when the company's management prepared financial statements that failed to represent the economic reality of the company. excluding billions of dollars of debt. The Securities and Exchange Commission (SEC) calls the case “one of the largest financial frauds ever to occur at a public company” (Markon & Frank, 2002). At the center of the case is John Rigas, the company's founder, former president, CEO and patriarch of the Rigas family. Also arrested were his sons, Timothy and Michael, both former members of the executive board, James R. Brown, former vice president of finance, and Michael C. Mulcahey, former director of internal reporting. The lawsuit filed in... middle of paper... the jury couldn't agree on the verdict. He later pleaded guilty to making false entries in Adelphia's records. For this he was sentenced to ten months of home confinement and to pay a fine of 2,000,000 dollars (Barlaup, Hanne and Stuart, 2009). James R. Brown, the star witness, who admitted to orchestrating much of the alleged fraud, remains free and awaits sentencing (Gilliland, 2012). The Rigas family still lives in Coudersport and still operates a cable company. In the years following the trial. James R. Brown, Michael Rigas, and a small group of former Adelphia Communications employees re-established the two private cable systems that had not been ordered divested and sold. The new company currently has 35,000 subscribers in 12 states. The name of the new company is Zito Media, inspired by his father's native Greek (Gilliland, 2012). Roughly translated, it means “new life.”