In November, the Third District Court found the investment company of Dewey, Che
ID: 3449437 • Letter: I
Question
In November, the Third District Court found the investment company of Dewey, Cheetum, and Howe (DCH) guilty of operating a Ponzi scheme. The company had, for years, falsely indicated that depositors’ funds were invested in medium and high cap company stocks and that DCH earnings were consistently 50-100 percent higher than industry averages. In reality, DCH regularly invested in high-risk financial instruments, some of which resulted in significant losses. Because of the falsified earnings reports, depositors were eager to invest with DCH and few requested withdraws from their DCH accounts. Because the company regularly received new funds from new depositors, it was able to use these funds to pay the reported earnings to the small number of depositors who did request withdraws. After the Ponzi scheme was uncovered, investigators indicted three individuals – Adriana, Bob, and Chet. They found that Adriana, a DCH financial manager, had falsified company investing records. After DCH’s first investments in several junk bonds that resulted in complete losses, Bob, the CEO, told Adriana of the company’s dire financial situation. Bob explained to Adriana that he was concerned that the company would lose most of its deposits if depositors learned of the losses, and he asked Adriana to falsify the company’s investment records. She initially refused. Bob then told Adriana that if she did not falsify the records, she would likely lose her job. She then consented to falsify the company’s investment records with the understanding that she would never do so again. However, when Bob came to Adriana again a few months later after another loss, he found that she was easier to convince because he said, “we are now in this together.” Thus, Adriana began a pattern of several years of falsified investment records. Troubled by her behavior after she first agreed to falsify the records, Adriana confided in Chet, the DCH human resources manager. She told him of the company’s investment losses and Bob and her behavior. She asked Chet what she should do. Not wanting to disrupt the company, Chet assured Adriana that she was doing the right thing by falsifying the investment records. He told her that more harm would come from not falsifying the records than from falsifying them.
Who is ethically responsible for the harm caused by the Ponzi scheme?
A. Bob
B. Adriana
C. Adriana and Bob
D. Chet
E. Bob and Chet
Chet’s explanation that more harm would come from not falsifying the company’s investment records than from falsifying them reflects what type of ethic?
A. care
B. virtue
C. rights
D. justice
E. utilitarian
A. Bob
B. Adriana
C. Adriana and Bob
D. Chet
E. Bob and Chet
Explanation / Answer
After reading the whole paragraph
1) the correct option is option (c) Adriana and Bob..
2) the correct option is option (d) justice..
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