In the 1980s, poor management and outright fraud required a $300 billion bailout by Washington of US
Fantastic news! We've Found the answer you've been seeking!
Question:
Keating bought Lincoln Savings & Loan for $51 million in 1984 and almost immediately the bank began to make aggressive investing bets with depositors' money, including stocks, junk bonds and real estate ventures. By 1987, Lincoln's assets had gone from $1 billion to $3.9 billion; however, an audit revealed that the bank had $135 million of unreported losses and was more than $600 million above a federally mandated cap on risky savings and loan investments.
On December 4, 1991, Keating was convicted in California on 73 counts of wire and bankruptcy fraud and sentenced him to 12 years of prison. After serving 50 months, Keating's conviction was overturned on a technicality. 15 He died in March 2014.
Questions:
1. Considering Keatings answer to the reporter's question, do you believe contacting the senators was ethical? If you were his advisor, would you have suggested that he testify to the House Banking Committee? Why would you recommend this action?
2. Given these circumstances, do you feel that Keatings sentence was appropriate? Why do you feel this way?
3. Lincoln Savings & Loan was a prime example of financial abuse during the 1980s. Why do you think they got away with this for so long? Do you think it can be done again today?
Related Book For
Business A Changing World
ISBN: 978-1259179396
10th edition
Authors: O. C. Ferrell, Geoffrey Hirt, Linda Ferrell
Posted Date: