Recent Ethical Investigations

Learning Outcomes

  • Examine recent ethical investigation cases in the workplace

Ethical violations and investigations are ever present in today’s world. Unfortunately, not everyone learns from the mistakes of others which can cause history to repeat itself. In this section we will explore some business ethics scandals over the last 20 years, and what happened to the companies and people who caused them.


Enron was at the center of one of the most infamous ethical scandals to date. Enron was an energy trading and utilities company headquartered in Houston, Texas. For years, high level executives at Enron fabricated their books to hide massive losses. In 2001, the Securities and Exchange Commission (SEC) announced their investigation into Enron’s accounting practice. At the end of 2001, Enron filed for bankruptcy after their stocks dramatically dropped from $75.09 in February to $0.26 in December.

After their investigation, the SEC filed charges against high level Enron executives who knowingly manipulated accounting rules. The CEO and CFO were charged with 46 counts which ranged from conspiracy, fraud, money laundering, and insider trading. In the process, the Enron scandal also destroyed a large auditing firm, Arthur Andersen, who overlooked and helped conceal accounting inconsistencies and fraud.

Bernie Madoff—2009

Bernie Madoff had an extensive background in finance, even helped to establish the Nasdaq stock market and used this credibility to convince thousands of wealthy investors to give him their savings. Although he promised a high payoff, in reality Madoff was running an elaborate Ponzi scheme and cheated his investors out of $65 billion. He was charged with 11 counts of fraud, money laundering, theft, and perjury. He passed away on April 14, 2021 while serving his 150-year prison sentence. Madoff is infamous for the most expensive Ponzi scheme in history.

Scott Thompson, Yahoo!—2012

In 2012, Scott Thompson was brought on as Yahoo’s new CEO. Within a few months after he started his role as CEO, an activist group challenged Thompson’s credibility and qualifications for the job. After a quick investigation, Yahoo! learned that Thompson did not have a computer science degree as he claimed he did when he applied for the job. While this may seem like a little white lie, it was a brazen act of deception. Not only was it concerning that he lied on his resume, but it was equally, if not more concerning, that the board did not properly corroborate any of his qualifications. Thompson willingly resigned as CEO in May of 2012.

Bill O’Reilly & 21st Century Fox—2017

In early 2017, it was reported that Bill O’Reilly had paid off multiple women to keep them quiet about sexual harassment accusations. There were five women who were said to have been paid millions to keep quiet about any interaction with O’Reilly. Advertisers for the Bill O’Reilly show quickly pulled their ads from his show and 21st Century Fox removed O’Reilly from his position in April. Although O’Reilly and his show were canned neither O’Reilly or 21st Century Fox admit to any wrongdoing.

Equifax’s Data Breaches—2017

In 2017, Equifax, a credit rating firm revealed that it had been hacked and roughly 145 million people’s information had been compromised. To make matters worse, it was revealed that Equifax was aware of a system flaw that allowed the hackers to gain access to their systems. Even worse, they knew about the breach but waited two months before making it public knowledge. In addition, right before the breach was made public, executives sold around $1.8 billion in company shares. Since the scandal, many high leveled executives stepped down and there is still a pending investigation into insider trading.

Elon Musk, Tesla—2018

Elon Musk, Tesla’s CEO, got himself into trouble with a tweet in 2018 claiming that Tesla had secured funding to take the company private. The tweet explained that Musk was considering it and that the stock price would be $420 a share. This tweet was not accurate and the SEC began investigations with the idea that Musk’s tweets had the potential to sway the market. Both Musk and Tesla were each fined $20 million and greatly damaged both Musk’s personal and Tesla’s company reputations. After the scandal, Musk was removed from his chairmanship.

PRactice Question


“Behind the Enron Scandal.” Time. June 24, 2002. Accessed April 10, 2019.,28804,2021097_2023262_2023247,00.html.

Investopedia. “5 Most Publicized Ethics Violations By CEOs.” Forbes. February 05, 2013. Accessed April 10, 2019.

Johnson, Christen A. “#MeToo: A Timeline of Events.” Chicago Tribune. March 07, 2019. Accessed April 10, 2019.

Shen, Luncinda. “The 10 Biggest Business Scandals of 2017.” Fortune. December 31, 2017. Accessed April 10, 2019.

Wolff-Mann, Ethan. “10 Big Corporate Scandals of 2018.” Yahoo! Finance. December 21, 2018. Accessed April 10, 2019.

Yang, Stephanie. “5 Years Ago Bernie Madoff Was Sentenced to 150 Years In Prison – Here’s How His Scheme Worked.” Business Insider. July 01, 2014. Accessed April 10, 2019.


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