1. Three decades ago, corporations and corporate directors were rarely prosecuted for crimes, and penalties for corporate crimes were relatively light. Today, this is no longer true. Under the corporate sentencing guidelines and the Sarbanes-Oxley Act, corporate wrongdoers can receive substantial penalties. Do these developments mean that corporations are committing more crimes today than in the past? Will stricter laws be effective in curbing corporate criminal activity? How can a company avoid liability for crimes committed by its employees?

2. Do you agree that when a corporation is approaching insolvency, the directors’ fiduciary obligations should extend to the corporation’s creditors as well as to the shareholders?

3. When a company’s executives offer opinions about the firm’s financial status and future business prospects through blogs, Twitter, and other Internet forums, the SEC can hold the company liable for violating securities laws. Is this fair to investors who want to hear the straight scoop from the firm’s executives? What arguments can you make in favor of this restriction? What arguments can you make against it?

4. Should corporate lawyers who become aware that someone at the client corporation may have violated securities laws report their suspicions only to persons within the corporation, or should they report their concerns to the SEC? Explain.

Every now and then, scandals in the business world rock the nation. Certainly, this was true in the first decade of the 2000s when the activities of Enron Corporation, AIG, and a number of other companies came to light. As noted in several chapters in this unit, Congress responded to public outcry in 2002 by passing the Sarbanes-Oxley Act, which imposed stricter requirements on corporations with respect to accounting practices and statements made in documents filed with the Securities and Exchange Commission (SEC). The lesson for the business world is, of course, that if business leaders do not behave ethically (and legally), the government will create new laws and regulations that force them to do so. We offered suggestions on how business decision makers can create an ethical workplace in Chapter 5. Here, we look at selected areas in which the relationships within specific business organizational forms may raise ethical issues.