Accounting Scandal

Accounting Scandal
Name
Institution
Date
Accounting Scandal
In the wake of accounting scandals, several corporations have lost integrity. One of the recent accounting scandals involved Enron executive officers engaged in securities transactions during a mandatory blackout period involving the company’s employee pension plans. The executive officers profited from employees pension. The act was unethical because shareholders lost billions of dollars while both the employees and investors lost their retirement gains and even jobs (Palmer et al., 2002).
The action was also illegal because, under the section 306 of the Sarbanes-Oxley Act, the law prohibits directors and other officers from getting involved in securities during mandatory blackout period. The law states that any profit generated by the official violates the law, and these gains need to be recovered regardless of their intentions. The Act requires that the company needs to sue the directors within sixty days failure to do so, stakeholders are permitted to sue the directors on behalf of the company .These action needs to be undertaken with two years of the date in which the profit was acquired (Palmer, Perrin, Wine,...