Bankruptcy :: essays research papers

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy   Ã‚  Ã‚  Ã‚  Ã‚  Chapter 7 and Chapter 13 bankruptcies are full of advantages and disadvantages. But at the same time they are very different. Without knowing these differences a person could lose many things from money to possessions. Chapter 7 bankruptcy can wipe out most of ones debts but certainly not all of them. Certain kinds of debt are not covered by the terms of Chapter 7. Some examples of debts that must be paid after filing for bankruptcy would include child support, alimony, income taxes and penalties, student loans, and court ordered damages due to unfair and unrightous acts. Bankruptcy courts handle your financial problems until the case ends. A court assumes control of all ones debts that are owed and all property that is not exempted. A person, trustee, is appointed to be in charge of your debt. The trustee collects property that can be taken and sells it to repay some creditors. That property can be surrendered to the trustee, one may pay the market value of it or one also may choose to trade exempt property with nonexempt property. A small number of people actually lose property when filing bankruptcy. If a person changes their mind about filing for bankruptcy they may ask the court to dismiss the case. At the end of the process the court would discharge most of the debts and one is unable to file for Chapter 7 bankruptcy again for at least another six years.   Ã‚  Ã‚  Ã‚  Ã‚  Chapter 13 bankruptcy us mostly used to make up any type of debt payments and pay things off and in some cases it can be used to stop a foreclosure on a house. Chapter 13 bankruptcy cases usually last up to 5 years. During that time one would have to live under a strict budget that would require discipline. Most debtors that file for chapter 13 bankruptcy never pay back all their creditors all that they owe. That can ruin your credit because it stays on file for at least 10 years. Money management seminars are available to those that have paid 75% or more of their debt. Chapter 13 bankruptcy allows creditors to get at least some of their money back. Debtors keep all of their property and would out a compulsory, court-enforced plan to repay a portion of their debts over a certain period of time. With Chapter 13 bankruptcy some debts may be discharged but alimony and child support continue to be an obligation that must be fulfilled.

Essay --

En Marà ­a el trama es ingenuo se describe el amor de Efraà ­n y Marà ­a de una manera sincera y inocente hasta que ocurre la muerte de la protagonista. La novela sentimental se identifica porque siempre tiene una pareja enamorados con diferentes problemas. Donde los hechos se desarrollaron en una forma directa, y aunque Isaacs narra en primera persona, es sabio todo lo conoce. Teniendo el conocimiento de lo que ocurre significa que la novela fue creada con elementos autobiogrà ¡ficos con aspectos de su propia vida. Esta novela presenta caracterà ­sticas importantes que utilizan en novelas romà ¡nticas como el romanticismo, costumbrismo y el realismo. En esta novela discutimos en la clase que contiene informacià ³n autobiogrà ¡fica del autor Jorge Isaacs. El vivià ³ en la casa donde se describe que era la casa de Efraà ­n donde se desarrollo el idilio en la hacienda llamada â€Å"el paraà ­so†. Conociendo detalles del autor hace entender la novela mas, como Isaacs siendo hijo de padres judà ­os igual que Efraà ­n convertido al cristianismo. Ambos estuvieron interesados en las mismas lecturas y estudiaron la poesà ­a, tambià ©n queriendo ser doctores. En esta novela se caracterizan muchos elementos importantes de una novela romà ¡ntica como la idealizacià ³n de la naturaleza. La abstraccià ³n del paisaje y la personificacià ³n caracteriza gran parte de las novelas romà ¡nticas. La cuidad del Cauca donde el autor pasà ³ su nià ±ez y mayorà ­a de su vida es donde ocurre el romance, porque Marà ­a fue adoptada por sus padres ella fue a vivir a esa casa. En que los dueà ±os, y esclavos viven del amor cristiano. La convivencia es normal a pesar de la diferencia social y econà ³micamente. Igual que la idealizacià ³n en esta novela el romanticismo està ¡ representado por varias formas. En ... ...a donde es posible estarlo en esa posicià ³n. Isaacs expone su preocupacià ³n por el realismo al prohibir la inhumanidad de lo que era la esclavitud. Las maneras de los personajes realistas se imponen en dos socios de Efraà ­n. Por ejemplo, â€Å"Pude notar que mi padre, sin dejar de ser amo, daba un trato carià ±oso a sus esclavos, se mostraba celoso por la buena conducta de sus esposas y acariciaba a los nià ±os.† Los personajes Carlos y Emigdio. Los à ºnicos personajes romà ¡ntica as son Marà ­a y la mama de Efraà ­n. Efraà ­n tiene la personalidad de su creador con cierta idealizacià ³n. El ser perfecto es grande en esta novela, la ambicià ³n de Efraà ­n y su amor imposible hace que separe a los dos. El realismo se nota en esta novela por los personajes menores como los esclavos y la clase baja. Los actores secundarios està ¡n presentados de una manera realista, y no idealizan nada romà ¡ntico.

Lukes Three Dimensions of Power :: Power Society Symbolism Culture Essays

Luke's Three Dimensions of Power   Ã‚  Ã‚  Ã‚  Ã‚  "Power serves to create power. Powerlessness serves to re-enforce powerlessness"(Gaventa,1980:256). Such is the essence of the on going relationship between the Powerful and the Powerless of the Appalachian Valley where acquiescence of the repressed has become not only common practice but a way of life and a means of survival. In his novel Power and Powerlessness, John Gaventa examines the oppressive and desperate situation of the Appalachian coal miners under the autocratic power of absentee land-owners, local elites, and corrupt union leaders. His analyses is based on Lukes three-dimensional understanding of power from his book Power: A Radical View. Gaventa applies the three notions of power to the politics of inequalities in the Appalachian Valley and, while demonstrating the inadequacies of the first or 'pluralist' approach and the merits of the second and particularly the third dimensions, asserts that the interrelationship and reinforcing affect of all three dimensions is necessary for an in depth understanding of the "total impact of power upon the actions [or inactions] and conceptions of the powerless"(Gaventa:256)   Ã‚  Ã‚  Ã‚  Ã‚  This essay will examine Luke's three power dimensions and their applicability to Gaventa's account of the inequities found in the valleys of the Cumberland Mountains. Reasons for the mountain people's submission and non- participation will be recognized and their nexus with the power relationship established. In this way, Gaventa's dissatisfaction with the pluralist approach will be justified and the emphatic ability of the other two dimensions to withhold issues and shape behaviour will be verified as principal agents of Power and Powerlessness.   Ã‚  Ã‚  Ã‚  Ã‚  The one dimensional view of power is often called the 'pluralist' approach and emphasizes the exercise of power through decision making and observable behaviour. Robert Dahl, a major proponent of this view, defines power as occurring in a situation where "A has power over B to the extent he can get B to do something that B would not otherwise do"(Dahl as cited in Lukes, 1974:11). A's power therefore is defined in terms of B and the extent to which A prevails is determined by its higher ratio of 'successes' and 'defeats' over B.   Ã‚  Ã‚  Ã‚  Ã‚  Observable behaviour then becomes a key factor in the pluralist approach to power. Dahl's Who Govern's? expresses the pluralist belief that the political arena is an open system where everyone may participate and express grievances which in turn lead to decision making. Those who propose alternatives and initiate issues which contribute to the decision making process are demonstrating observable influence and control over those who failed all together to express any interest in the political process.   Ã‚  Ã‚  Ã‚  Ã‚  The Pluralist approach assumes that in an open system, all people, not

Assessment of the Necessity of the Nuclear Proliferation Treaty

Perceptions regarding nuclear weapons presents a contradiction in terms of the existence of a â€Å"peaceful nuclear past and a fearful nuclear future† (Sagan 66). Such a contradiction exists in terms of our current understanding regarding nuclear weapons and deterrence. Consider for example that during the Cold War period, nuclear weapons were widely believed to be one of the most important factors in maintaining the peace between the United States and the Soviet Union (Cimbali 224). Currently, on the other hand, it is widely believed that enabling the continuing spread and development of nuclear weapons will only increase the risk of the development of a nuclear war. This is based upon the assumption that rival countries that are considered nuclear powers are unlikely to maintain stable deterrence. Due to this concern regarding the prevention of such an event, the Nuclear Non-Proliferation Treaty was formulated during 1968. The treaty imposed an international limitation to the spread of nuclear weapons. It is based upon three main tenets: non-proliferation of nuclear weapons, disarmament of nuclear weapons, and the peaceful use of nuclear energy. What follows is an analysis of the nuclear proliferation argument. As was stated above, the main rationale for the Nuclear Proliferation Treaty (NPT) was the prevention of nuclear wars caused by the unstable deterrence between nuclear weapons states. According to the Canadian Foreign Minister Lloyd Axworthy, the agreement is based upon international mechanisms that operate within the foundations of international laws and norms. Anxworthy further states that the NPT opts â€Å"to promote and achieve a world without nuclear weapons† hence a world without a nuclear war impending in its historical future (1). As opposed to this, it has been argued by political scientists that if the main rationale for the treaty was the prevention of nuclear wars, then the treaty by prohibiting the proliferation of nuclear weapons defied itself in so far as enabling the proliferation of nuclear weapons ensures the prevention of nuclear wars. According to Kenneth Waltz, â€Å"nuclear weapons have been given a bad name† (731). Waltz argues that it is fallacious to assume that since nuclear weapons may cause catastrophic nuclear exchanges, nuclear wars will thereby cause global destruction. Waltz argues that nuclear weapons will enable the development of stability and peace since â€Å"a nation will be deterred from attacking if it believes that there is a possibility that its adversary will retaliate† (734). It is important to consider that Waltz’s claim is based upon the assumption that major wars amongst states occur as a result of the estimation of zero or low retaliation costs of a state from another state. In lieu of this, it is thereby possible to conclude that allowing the proliferation of nuclear weapons lessens the possibility of the development of nuclear wars since it ensures that countries will consider the high amount of risk involved in launching a nuclear attack towards a state with similar military capacities. In lieu of this, I would like to conclude that it is indeed true that the choice between a more peaceful and co-operative versus a war-ridden and hostile world is highly dependent or critically dependent on the future of nuclear weapons however, it does not necessarily necessitate the prevention of their further spread. Works Cited Cimbali, Stephen.   The Dead Volcano: The Background and Effects of Nuclear War Complacency.   Portsmouth, NH: Praeger/Greenwood, 2002 Halard, Muller, David Fischer, and Wolfgang Kotter.   Nuclear Non-Proliferation and Global Order.   Oxford: Oxford Univ. P., 1994. Waltz, Kenneth.   â€Å"Nuclear Myths and Political Realities.†Ã‚   American Political Science Reviews 84. 3 (September 1990).      

Cost and Revenue Function

Algebra I Cost-Revenue Business Project This project is designed for you to demonstrate your understanding of systems of linear equations. Before starting, read the entire project outline and requirements. During this project you are to do the following: 1) Pair up with a partner and create a business that sells one commodity of your choice (points for creativity). 2) Create a Market Research Survey that will be used to survey 50 students to help you discover what potential customers are looking for in the product your group will create and sell.The survey must include a minimum of three questions. 3) Conduct the survey. 4) Create a list of fixed costs – items and prices. Consider items such as a store, equipment, furniture, advertisement, etc. Use the survey results to revise the fixed cost list if needed. Include the total fixed cost. 5) Create a list of variable costs. With each variable cost include the dollar figure calculated per unit. Once again, use the survey results to revise the variable costs list if needed.Sate the total variable cost. 6) Using the survey results and the total variable cost determine the product price. 7) Write the COST function and the REVENUE function. 8) Solve the system of equations algebraically using the substitution method AND the linear combination method in order to find the break-even point. 9) Create a model of the product. 10) Create a Power Point Presentation that includes the following: †¢ A written introduction including a description of the product. A picture of the product †¢ The completed Market Research Survey †¢ A written summary of the survey results †¢ A list of the fixed costs and the total †¢ A list of the variable costs and the total †¢ The cost and revenue functions †¢ The algebraic computations of the break-even point †¢ An accurate graphical representation of the cost and revenue functions that shows the break-even point and the regions of loss and profit (l abel all items)†¢ A written explanation of the break-even point and the profit and loss regions of the graph. 1) Prepare a 5 minute presentation in which both partners share the responsibility of discussing and demonstrating: †¢ An introduction of the business and product †¢ The product or model of the product †¢ An explanation of how the Market Research Survey was used to help develop the product, the costs, and the product price †¢ The cost and revenue functions †¢ The algebraic computation of the break-even point †¢ The graph of the cost and revenue functions, the break-even point, and the regions of loss and rofit †¢ An explanation of the break-even point and the profit and loss regions of the graph †¢ Graphing the cost and revenue functions and finding the break-even point using the graphing calculatorAlgebra I Cost-Revenue Project Names: _________________________ _________________________ Work time and due dates: You will be given t ime to get organized today, 10 minutes of class time on Feb. 10th and 11th. We will work in the computer lab on Feb. 12th & 16th. †¢ You will give your presentations on Tuesday February 17. Power Point presentations must be emailed to me ([email  protected] k12. or. us) by 7:30 am on February 17th. If I don’t have it by then you will loose ALL presentation points. Power Point †¢ †¢ †¢ †¢ †¢ Introduction of the business and product The product The completed Market Research Survey A written summary of the survey results An explanation of how the survey was used to help develop the product, the costs, and the product price A list of the fixed costs and total A list of the variable costs and total The cost and revenue functions

Impact of Leather Waste

1. 1. 1. Leather industrial waste: Prominent effectiveness of leather industry is amplified by high input and expenditure but on other side it causes huge waste of resource, incredible environmental pollution and biological chain destruction [17]. Streams of gaseous, liquid and solid waste are resulted by environmental blow of tanneries. Global leather industry generates 4 million tones of solid waste per year [18]. People use products of the leather-processing industry on a daily basis. These include especially shoes, leather and textile goods; we normally encounter leather products even in both public and private transport. The primary raw material for final products is hide from animals from slaughter houses and hide from game—i. e. waste from the meat industry, which is processed in tanneries and turned into leather. Therefore, the tanning industry can be considered one of the first industries to use and recycle secondary raw materials. Although the tanning industry is environmentally important as a principal user of meat industry waste, the industry is perceived as a consumer of resources and a producer of pollutants. Processing one metric ton of raw hide generates 200 kg of final leather product (containing 3 kg of chromium), 250 kg of non-tanned solid waste, 200 kg of tanned waste (containing 3 kg of chromium), and 50,000 kg of wastewater (containing 5 kg of chromium) [1]. Thus, only 20% of the raw material is converted into leather, and more than 60% of the chromium is in the solid and liquid waste. During the production of leather goods, especially shoes, manipulation waste is produced, whichmakes about 15–20% of the entry material—leather. The last kinds ofwaste are used leather products which have lost their utility value. 1. 1. The possibility of oxidation of CrIII to CrVI The basic question is the possible oxidation reaction from chromium III to chromium VI. In basic solutions, the oxidation of CrIII to CrVI by oxidants such as peroxides and hypohalide occurs with ease [2]. Such strong oxidation conditions are realized in the process of the sterilization of drinking water. This is the first threat to human health and life. Rain (especially acid rain) can leach chromium III from waste dumps, and soluble salts can then reach sources of drinking water. During the sterilization process by ozone or hypochloride, chromium III is converted into chromium VI and reacts with magnesium and calcium ions occurring in drinking water to produce carcinogenic magnesium and calcium chromate or dichromate salts. Another problem concerns the possibility of oxidation of CrIII into CrVI in gentle conditions by air in the wide range of pH. Principally, oxidation can be realized after the following equations: According to the European Commission (EC) the quantities of solid waste produced by tanneries depend on the type of leather processed, the source of hides and skins, and the techniques applied [2]. On an average, at the end of the process, about 20% of the weight of the raw hides is (grain side) leather [2]. On the other hand, in Rio Grande do Sul, approximately 40% of the initial raw material is transformed into solid and liquid wastes [3]. In the tanning industry, raw skin is transformed into leather by means of a series of chemical and mechanical operations [4,5]. Chromium salts (in particular, chromium sulfate) are the most widely used tanning substances today. Hides that have been tanned with chromium salts have a good mechanical resistance, an extraordinary dyeing suitability and a better hydrothermal resistance in comparison with hides treated with plant substances. Chromium salts also have a high rate of penetration into the inter fibrillar spaces of the skin, what represents a saving in terms of production time and a better control of the process [6]. In Brazil, approximately 90% of the leather industry uses chromium in hide processing, resulting in hazardous The conventional tannery methods lead to discharge of solutions with chromium concentrations in the range of 1500–4000 mg/l. The specification for the discharge of chromium containing liquid wastes stipulates a range of 0. 3–2 mg/l [21]. The tanning treatments to produce the wet blue leather yield sludge containing approximately 3% (w/w) of chromium [9]. The method commonly used for this waste disposal presents high operational costs. The production of chromium containing leather wastes (including chrome shavings and tanned splits) in leather industry has been recognized as a real problem for many years [ref]. The chromium leather wastes are generated principally during mechanical treatments carried out after tanning process. In this latter, chromium is bound with the collagen matrix, by cross linking with collagen carboxylic groups through coordinate covalent linkage [6–10]. The final chemical structure of the waste illustrated in Eq. (1), is obtained through two chemical phenomena â€Å"olation and oxolation†. As reported by numerous authors [6–12], the olation phenomenon is observed gradually with the increase of the alkalinity of the tanning medium. The olified complex continues its evolution through time and an acid discharge takes place while the oxygen-chrome coordinate links are transformed into covalent links (oxolation bridges) Eq. The great stability of the collagen–chromium complex produced makes the waste a non-biodegradable and toxic material, due to the chromium and nitrogen content about 4. 3% and 14%, respectively [13,14]. A large amount of waste still goes into land disposal [15]. Incineration in air atmosphere generates other forms of residual pollutant (gaseous emission and ashes) more noxious [16–21] The solid wastes generated _presented in Table 1. from leather industry can be broadly classified as untanned collagenous, tanned collagenous and non-proteinous wastes. Among the tanned collagenous waste, the one resulting from the finishing operation called buffing dust draws the most attention from the public and pollution control authorities. Buffing dust appears in a considerable proportion with processing of raw hides skins _i. e. 2–6 kg per ton of raw hides skins.. Buffing dust is a micro fined solid particulate impregnated with chromium, synthetic fat, oil, tanning agents and dye chemicals. Buffing dust carries about 2. 7% chromium on dry weight basis. This is carcinogenic in nature and it causes clinical problems like respiratory tract ailments w1x, allergic dermatitis, ulcers, perforated nasal septum, kidney malfunctions w2x and lung cancer w3x in humans exposed to the environment containing buffing dust particulates. Hence, it is cautioned by pollution control authorities to collect the buffing dust for safety disposal. The current practice of disposing of buffing dust consists of: _i. incineration in incinerators, _ii. land co-disposal w4–12x. Incineration causes serious air pollution problems because of release of toxic So and No gases w13x, and it has been observed x x that at 8008C, about 40% of Cr_III. is converted into Cr_VI. during the incineration of Cr laden solid waste w14x. The tanning industry is familiar with its being a potentially pollution-intensive industry. The nvironmental impacts from tanneries result from liquid, solid and gaseous waste streams. It must be emphasized that 4million tones of solid waste per year is generated by the global tannery industry [6]. According to the estimation of Sreeram et al. , about 0. 8 million tons of chromium tanned shavings are generated per year globally [7]. The solid wastes from tannery industries may have significant Cr (III) conten t. Even though Cr (III) is viewed as not toxic, possible oxidation of Cr(III) to Cr(VI), due to the acid rains or incineration, threats the environment since Cr(VI) is a more toxic species. Therefore, the conventional disposal methods, land-filling and incineration, cannot be considered a solution to the disposal problem of tanned leather wastes in eco-friendly manner. In literature, there are many studies on the treatment of tanned leather wastes mainly including the extraction of chromium from wastes to re-use in the tanning process [8,9] and isolation of protein fractions [10,11]. The tanning industry generates a huge quantum of liquid and solid wastes while producing finished leather. Tanning is the main process followed in leather manufacturing that protects the leather against some environmental effects such as microbial degradation, heat, sweat or moisture, etc [1]. In tanning industry raw skins/hides are transformed into leather by means of a series of chemical and mechanical operations [2,3]. The tanning process is usually accomplished in three distinct phases, i. e. , preparation of the raw live stock to tan with tanning agents, tanning with mineral/vegetable tanning agents and post tanning to impart colour to finished leather. Basic chromium sulfate is the most widely used tanning agent for converting putrescible collagen fibres into non-putrescible leather matrix. Chrome tanned leathers have improved mechanical resistance, extraordinary dyeing suitability and better hydrothermal resistance in comparison with vegetable tanned leather. The solid wastes generated from leather industry can be broadly classified into untanned collagenous, tanned collagenous and non-proteinaceous wastes. Among the tanned collagenous waste, the one resulting from the finishing operation is called chrome buffing dust (CBD). CBD is a micro fined solid particulate impregnated with chromium, synthetic fat, oil, tanning agents and dye chemicals. About 2–6 kg of CBD is generated as a solid waste per ton of skin/hide processed. CBD contains chromium, it is carcinogenic in nature and it causes clinical problems like respiratory tract ailments, ulcers, perforated nasal septum, kidney malfunction [4] and lung cancer [5] in humans exposed to the environment containing buffing dust particulates. Hence, it is advised by pollution control authorities to collect the CBD for safe disposal. The current methods for disposing buffing dust are land codisposal and thermal incineration. Land co-disposal method is not preferred for the reasons such as overall high pollution emissions and low energy recovery. The leather industry generates a large amount of a Cr-containing solid waste (wet blue leather), with approximately 3% (w/w) of chromium. However, the leather industry has commonly been associated with high pollution due to the bad smell, organic wastes and high water consumption caused during traditional manufacturing processes [2]. Different forms of waste in quality and quantity, which emerge during the transformation of hides and skins into leathers in thousands of leather factories, from primitive to modern all around the world, have negative impacts on the environment. According to the data received from the studies of several researchers, approximately 200 kg of leather is manufactured from 1 tone of wet-salted hide [1-3]. This amount constitutes about 20% of rawhide weight. More than 600 kg of solid waste is generated during the transformation of Raw hide into leather. That is to say, solid wastes containing protein and fat that constitute more than 60% of rawhide weight are disposed to the environment by leather factories without turning them to good use In other words, besides the 30-35m3 waste water disposed to environment during the processing of every 1 ton of rawhide in world leather industry, the data from FAO reveals that approximately 8. 5 million tons of solid waste is generated during the production of 11 million tons of raw hide processed in the world [4]. Solid wastes generated by the leather industry in these stages of processes may be classified as follows: i. astes from untanned hides/skins (trimmings, fleshing wastes) ii. wastes from tanned leather (shaving wastes, buffing dust) iii. wastes from dyed and finished leather (trimmings from leather) Data obtained from research reveals that 80% of solid wastes are generated during pre-tanning processes, while 20% of the wastes are caused by post-tanning processes Due to the bad smell th ey produce during their putrefaction and their harmful chemical content, untanned hide/skin wastes have negative effects on the soil and/or water resources of the environment where they are discharged, in other words n the local plant flora and animal fauna. Therefore, uncontrolled discharge of such wastes should be prevented without taking adequate precautions. Legal arrangements gradually gaining speed all over the world enforce the leather industry to apply innovations in terms of reusing solid wastes generated during leather production processes such as fleshing, shaving, trimming and splits. Solid wastes create a major problem for leather industry in terms of both their variety and quantity. A high amount of reusable waste is generated in the leather industry. It is possible to recycle these products and even use them as raw materials for different industries [7]. The variety and quantity of solid wastes depends on animal species, breeding conditions, slaughterhouse practices, conservation conditions, leather process stages, mechanical operations, qualification of the personnel, and chemicals used in processes. Yet this fact causes uncertainties in reusing the generated wastes.

Ethics: Goldman Sachs Essay

Goldman Sachs, founded by German immigrants, began as a small humble business looking to succeed. Over time their business strategy changed and they entered into ethical and legal issues they had not encountered before. In the late 1920s Goldman Sachs began maliciously investing in companies to drive their demand. They coined this term â€Å"laddering† from overleveraging them selves and putting the market at risk. Their actions created the bubble that burst in the stock market crash of 1929. Furthermore, Goldman Sachs engaged in â€Å"trading huddles†. Only their preferred customers where chose to participate on this unethical schemes, and the same customers were shot changed on financial profit from unprofitable IPO’s shares. It was clear that Goldman Sachs business focus was not customer based but self-based by the mantras that they use to have: â€Å"long-term greedy† and â€Å"Filthy rich by forty.† In 2008 the market once again crashed equally as hard as in 1929 and Goldman Sachs was at the root of the cause. With self-fulfillment and greed in mind, Goldman Sachs used Collateralized Debt Obligations and bet against their clients to increase profitability. Goldman Sachs progressively became more unethical in their dealings, and the SEC took notice. Goldman was accused on two accounts of fraud because of one particular portfolio of securities, named ABACUS, which they dealt with. After analyzing the case and reviewing the unethical actions and alleged accusations against Goldman Sachs, it is clear that Goldman Sachs was operating unethically. They misrepresented, hid information, and engaged in conflicts of interest with their clients. Goldman Sachs took an unfair advantage with their â€Å"toes to the line mentality† on their legal and ethical issues leading the SEC to establish harsher regulations for the banking industry. Goldman Sachs can become more ethical by adopting Warren Buffet’s front page of the newspaper principles. When a firm finds that its employees needs to convince themselves that their work is adding social value, the firm should questions its ethical practices. The recommendation for a firm when they find themselves condoning unethical actions is to be honest with the regulating entity and its clients. It is likely to reward them in the long run despite the immediate consequences. Goldman Sachs Background In 1869 two German immigrants came to the US and founded Goldman Sachs with the humble purpose of being both an originator and a clearinghouse for commercial paper (Jennings, 73). However, the firm started to gradually drift from its initial business strategy set by its founders and started to provide other services and undertook investment strategies. In the late 1920’s Goldman Sachs created investment companies that it would itself invest in to drive up the market demand. As a result, investors started to invest in the company because of the perceived high demand. With the new proceeds, Goldman would borrow more money and create another investment company and repeat the process. As a result of this action, Goldman contributed to the stock market crash in 1929 and, with a similar strategy, the recent financial crisis in 2008 (Jennings, 73). During the Internet bubble in the 1990’s, Goldman engaged in an activity known as laddering. Goldman, as the underwriter of a security, would enter an agreement with its best clients to sell a portion of IPO’s shares at a predetermined price after their initial offering. This led to a misconceived demand in the secondary market of the stock due to the predetermined secondary pricing Goldman had set with some of it’s clients. Furthermore, in the 2000’s, Goldman would sell Collateralized Debt Obligations, for which it had a negative outlook, to its clients and issue trading reports, developed through the existing â€Å"trading huddles† in the firm, to certain preferred customers that was different from the analyst reports that were issued to the public. Its practices has been scrutinized and particularly its â€Å"toes to the line† on legal issues. In most cases, Goldman and its clients are the two main parties involved, and it is the clients that usually end up with the short end of the stick. Goldman’s actions are partly explained by the mantras that they use to have: â€Å"long-term greedy,† and â€Å"Filthy rich by forty.† This paper is relevant for current business leaders because it presents a case where a successful firm has come under great scrutiny due to its unethical actions and questionable practices. Bending the rules and pushing the envelope continuously to be a profitable firm has put Goldman in an unfavorable light in society. The paper will further discuss the ethical and legal issues Goldman has run into through its practices and will provide a general recommendation for how a business can avoid and deal with unethical practices. Analysis of Relevant Legal and Ethical Issues Initial Public Offerings Goldman created a synthetic demand in its IPOs through selling a portion of the IPO shares to its clients at a predetermined price higher then the initial price. This caused the price of the IPO shares to rise due to manufactured demand by Goldman (Jennings, 75). The Securities and Exchange Commission filed a complaint against Goldman alleging that they had violated Rule 101 of Regulation M under the Securities Exchange Act of 1934, which states: â€Å"Rule 101 of Regulation M, among other things, prohibits underwriters, during a restricted period (the five-day period preceding the determinations of IPO prices and prior to the completion of distributions of IPO shares), from directly or indirectly bidding for, purchasing, or attempting to induce any person to bid for or purchase any offered security in the aftermarket† (SEC). Goldman clearly attempted to induce, or induced, certain clients to bid for or purchase offered securities in the aftermarket through its laddering practices, which clearly violates Rule 101 of Regulation M. Goldman agreed to settle with the SEC by paying a fine of $40 million without admitting or denying the allegations (SEC). Some of the unethical practices present in Goldman’s laddering activities were: * Misrepresentation- Goldman inflated the price of the IPO shares consciously through the manufactured demand and the price of the shares were misrepresented. * Lying- Goldman Sachs lied to some of its best clients and had them pay higher price than the initial price under the laddered IPOs. * Violating Rules – Clearly making money from laddering is a violation of rules and therefore Goldman paid a heavy fine when they were caught engaging in this illegal practice Collateralized Debt In order to understand Goldman’s involvement in CDO’s it is pertinent to explain the security. Collateralized debt is simply an Asset-Backed Security, which means that there is a physical asset backing the security under contract. For example, a house serves as collateral for a mortgage and the bank has the right to claim the house in the event that the borrower defaults on the loan. A security is considered any investment contract that gives the owner evidence of indebtedness or business participation. Notes, stock, bonds, debentures, warrants, subscriptions, voting trust certificates, rights to oil, gas, and minerals, and limited partnership interest are all example of securities (Jennings, 728). A Collateralized Debt Obligation is a variety of fixed-income assets that are pooled together to create one security. In 2008, many of these CDOs became completely worthless because they were filled with sub-prime mortgages that defaulted, and Goldman was a big player in the CDO market. ABACUS was one particular CDO deal in which Goldman had created and sold. Fabrice Tourre, a vice president at Goldman Sachs at the time, put together the ABACUS CDO to be sold to clients. Tourre intentionally filled ABACUS with subprime mortgages so that Goldman could take a short position on the security, which means betting against its success, in order to profit. This CDO deal became infamous because the SEC uncovered a few emails written by Tourre. In one of the emails Tourre wrote: â€Å"More and more leverage in the system. The whole building is about to collapse anytime now †¦ Only potential survivor, the fabulous Fab [rice Tourre] †¦ standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implication of those monstrosities [sic]!!!† (Quinn) The SEC filed a civil action suit against Goldman and Tourre for their conduct under the ABACUS deal. The SEC’s complaint charged Goldman and Tourre with violations against Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5 (SEC). Each of the following rule of law states, among other things: â€Å"It shall be unlawful for any person in the offer or sale of any securities †¦ (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made†¦ â€Å" (SEC) â€Å" POSITION LIMITS —As a means reasonably designed to prevent fraud and manipulation, the Commission shall, by rule or regulation, as necessary or appropriate in the public interest or for the protection of investors, establish limits (including related hedge ex ­ emption provisions) on the size of positions in any security-based swap that may be held by any person.† (SEC) â€Å"It shall be unlawful for any person †¦ (a.) To employ any device, scheme, or artifice to defraud,†¨(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statementsmade, in the light of the circumstances under which they were made, not misleading, †¦Ã¢â‚¬ Ã¢â‚¬ ¨ (Taft Law) Goldman clearly violated Section 17(a) by not including the information that their ABACUS securities were based on poor mortgages. They violated Section 10(b) by taking a large short position in the Abacus deal. Lastly, they violated Rule 10b-5 by omitting material fact of their short position in the security. Furthermore, the SEC prohibits any analyst from issuing reports on securities that run contrary to the analyst’s true beliefs about the securities. Goldman denies betting against clients in an 8 page letter to it shareholder signed by CEO Lloyd Blankfien as well as President Gary Cohn. Goldman claims that they were protecting themselves and Blankfien said, â€Å"†¦Certainly we did not know the future of the housing market† (SEC). Goldman agreed to pay a fine of $550 million and admitted that it failed to disclose vital information in their marketing of ABACUS securities. Goldman’s actions did not reflect honesty, integrity, or responsibility. Some of the ethical issues present in the ABACUS deal are: * Taking unfair advantage – Goldman consciously made poor recommendations to their clients in order to sell the Abacus CDOs so they could make a profit on their short position. * Engaging in Conflict of Interest – Goldman stated: â€Å"We may trade, and have existing position, based on trading ideas before we have discussed those ideas with you†(Jennings 80). Despite this argument, they had a significant incentive to market and sell the securities in order to profit. * Hiding or Divulging information – Goldman used another firm to create the Abacus CDOs in order to distance themselves from the trade conflicts that would arise by shorting the CDO. They also omitted crucial information about the security, which was the knowledge of the amount of high-risk mortgage securities in the Abacus CDO. * Violating Rules- Goldman was charged with securities fraud, as explained by above, and did not look out for the best interest of their clients. Trading Huddles Goldman’s first obstacle with their trading huddles activities came from their Fundamental Strategies Group of analysts. The group consisted of Goldman analysts employed by their Securities Divisions. These groups of desk analysts were not regulated by the SEC rules because they did not involve â€Å"GIR [Global Investment Research Division] equity research analysts.† The SEC have strict guidelines that, â€Å"prohibits an analyst from issuing reports on securities that run contrary to the analyst’s true beliefs about the securities.† (Craig) Goldman did not break any statutory laws with the Fundamental Strategies Group since they were not covered in the SEC ruling. From the uprising, Goldman’s executives sent an email to all their clients, explaining their â€Å"Trading Ideas† and advice. The email was meant to elucidate the firm and public’s â€Å"conflict of interest† policy. In the message, Goldman stated, â€Å"You should not consider Trading Ideas as objective or independent research or as investment advice. When we discuss Trading Ideas with you, we will not be acting as your advisor (including, without limitation, in relation to investment, accounting, tax or legal matters) and the provision of Trading Ideas to you will not give rise to any fiduciary or equitable duties on our part† (Sorkin 1). In the case of Goldman vs. Common Wealth of Massachusetts, the court ruled, â€Å"Goldman failed to reasonably supervise GIR equity analysts’ communications to prevent and detect dissemination by GIR equity analysts of certain unpublished short term trading ideas† (SEC) and were held accountable to Section 204 (a)(2)(J) of the Act, which in part states that: â€Å"The secretary may by order†¦. deny, suspend, or revoke, any registration †¦ if he finds (1) that the order is the public interest and (2) that the applicant or registrant (J) has failed reasonably to supervise agents, investment adviser representatives or other employees to assure compliance with this chapter† (SEC). Goldman failed to supervise its agents to guarantee compliance with the act. The court ruled that Goldman must have a policy that allows a GIR equity research analyst to identify an unpublished report and follow its publication through more than 14 persons. Furthermore, Goldman will be required to disclose in their Terms of Use Agreement that the amount of GIR equity research report varies from client to client (Stempel). â€Å"Goldman agreed to pay a fine of $10 million and stop giving favored clients trading ideas developed at internal gatherings known as â€Å"trading huddles†Ã¢â‚¬  (Stempel). In addition, they were charged with not dealing in with honesty with all clients and took advantage over others, known as fair dealing with clients. While all companies try to balance on the line of pursuing profits and maintaining a moral conduct, Goldman Sachs was unable to keep their balance. After the reports of intentionally avoiding regulation from SEC Regulation AC, requiring equity research analysts to certify that their issued reports represents their actual views (SEC), the company crossed ethical boundaries. With their Fundamental Strategies Group, Goldman as a whole company condoned unethical action. Instead of following the regulation of the SEC they went around it. Some of the ethical issues present in the case were: * Taking unfair advantage – one part of the firm issued equity research reports to the public and another part of the firm did also engage in equity research but came to a different conclusion. However, the latter report was only issued to certain clients. By releasing one view on a subject and taking another position themselves, thereby taking unfair advantage. * Violating rules – even though their Fundamental Strategies Group were not violating any laws or regulation, they failed to follow the SEC Regulation AC Recommendation and Conclusion The cases mentioned above are only a few of the instances where Goldman has been scrutinized by government entities and the public. Its continuous practice of â€Å"toes to the line† on legal issues has many times resulted in lawsuits against the firm. As we can see, the legal issues they are pushing are unethical, however, they are not violating those laws. Instead, they are charged with other violations that result from operating at the line of illegal practices. Their reputation took a hit due to multiple SEC allegations and fines. To avoid these ethical situations Goldman Sachs should use the ethical principles that are taught. For example, they should have used Warren Buffet’s front page of the newspaper test in the case with the IPOs. Goldman Sachs should ask itself if they would be indifferent of their actions if the public would know that they intentionally manufactured demand for their IPOs. A partial reason for their unethical conduct was due to rationalizing; when they were confronted about their actions they proceeded by rationalizing and labeling their actions in order to avoid the ethical dilemmas. In the ABACUS case, Goldman stated that their clients are â€Å"qualified† and â€Å"sophisticated† enough to make market risk decisions. They most likely rationalized their actions by saying that the system is unfair and â€Å"if we don’t do it, someone else will†. In their case with trading huddles, it was a practice carried out by other firms, however, not to the same degree as Goldman. They waited until the lawyers told them it was wrong and rationalized by thinking â€Å"It’s a gray area†. Goldman Sachs’s pushed the limit of both the letter of the law, and the spirit of the law when dealing with its clients. Goldman’s history of brushing past ethical decisions have created many problems for the firm in the past years. It is clear that pursuing this strategy has not been to their benefit. A business should not have to argue how its actions add social value; it should be clear by the actions themselves. Therefore, if a business finds itself engaging in activities that do not pass Warrant Buffet’s Front of the Newspaper test it should reconsider its actions and business model. A red flag should rise when employees convince themselves that they are adding social value, as in the case with Tourre, or if employees feel any discomfort with their actions. If a company finds itself condoning unethical actions and violating the law, the best solution is to make an action plan on how to present their violations to the regulating government entity most truthfully and inform their clients of the unethical conduct with an apology. Despite that these measures might have a negative impact on the firm, it is highly likely be a short-term effect. The longstanding trust built up from their honesty and confrontation of the unethical actions could be beneficial to the firm’s future reputation. Work Cited Craig, Susanne. â€Å"Goldman’s Trading Tips Reward Its Biggest Clients.† The Wall Street Journal. 24 Aug. 2009. Web. 23 Mar. 2012. . â€Å"Goldman Sachs & Co.: Lit. Rel. No. 19051 / JANUARY 25, 2005.† U.S. Securities and Exchange Commission (Home Page). Web. 28 Mar. 2012. . Quinn, James. â€Å"Goldman Sachs, Fabrice Tourre and the Complex Abacus of Toxic Mortgages.† The Telegraph. Telegraph Media Group, 16 Apr. 2010. Web. 25 Mar. 2012. . â€Å"Rule 10b-5 — Employment of Manipulative and Deceptive Devices.† Law School  » University of Cincinnati College of Law. Web. 28 Mar. 2012. . â€Å"SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages.† ; 2010-59; April 16, 2010. Web. 28 Mar. 2012. . Sorkin, Andrew. â€Å"DealBook.† Mergers, Acquisitions, Venture Capital, Hedge Funds. 12 Jan. 2010. Web. 28 Mar. 2012. . â€Å"Statement by SEC Chairman: Proposal of Regulation AC.† Statement by SEC Chairman: Proposal of Regulation AC (Harvey L. Pitt). Web. 28 Mar. 2012. . Stempel, Jo nathan. â€Å"Goldman Fined $10 Million, Agrees to Stop Trading Huddles.† Reuters. Thomson Reuters, 09 June 2011. Web. 28 Mar. 2012. .