Sterling Equities (SE), a small real estate company was founded by Fred Wilpon and Saul Katz in 1972. Eight years later they acquired Professional Baseball team New York Mets from Charles Shipman Payson. The new sole owners are now in charge of many of the financial decisions. Wanting to invest money, the two owners invested to Bernie Madoff, a former financier and non-executive chairman of NASDAQ stock market. Madoff took the money that Wilpon and Katz invested, and turned it into a Ponzi scheme. Wilpon and Katz profited $48 million in the scheme while investing $523 million. It does not seem all that bad as of far, two guys who are wanting to make money the easy way ending up in a Ponzi scheme, and getting caught. What I forgot to mention is where Wilpon and Katz get the money from to invest.
Most of the money came from the company’s 401 k funds, which is retirement money for the employees. This is an unethical issue because it deals with the company’s owners taking employee money and investing it. Sterling Equities and the New York Mets were accused of knowingly investing the company money and investing it into a major scheme only to make a profit for themselves. Many people believed that Wilpon and Katz knew about the Madoff scheme, but both are denying the fact and all charges that are brought up against them in the scheme.
Wilpon, Katz and Madoff’s actions were unethical in a all ethical theroies: Individualist Utilitarianist, Kantian, and the Viture Theory, and frowned upon. Under the Individualism Theory in the business aspect, Sterling Equities/New York Mets and Bernie Madoff were trying to maximize profit. Freidman’s view is “the only goal of a business is to profit within the bound of the law", so the only obligation that the businessperson has is to maximize profit for the owners or the stockholders”. In the case here both were trying to do just that, maximize profit. Yet the way that they were recieveing the money from the investors and taking it away from the company's funds is not the way an Individualist would view as ethical. A Utilitarianism seeks to maximize happiness of all stakeholders. The stakeholders in this case happens to be Wilpon, Katz, Madoff are the main stakeholders with high management employees and the investors and stockholders of the companies being the others. Utilitarianists would not be happy with this case because in no way are the stakeholders trying to pursuit the happiness on others besides themselves. They are taking money away from the investors who were thinking that they will get a large sum back, but do not and not telling them where the money is going. Wilpono, Katz and Madoff are maximizing happiness to themselves with the money that they are investing illegally. A Kantian would not support the actions taken. Sterling Equities wanted to make a profit, but not doing it in the right way by investing the money. They took advantage of the money that they got their hands on and nearly lost all of it, not wanting to do what’s right for all but only for them. They did not what was morally right and when it was all over thousands of investors were hurt in the plan of Sterling Equities. They did not do what was right for everybody but did what they thought was right for them. In the end they stole millions of the investors dollars and could not give any of it back. The Virtue Theory states that one should do something in a virtuous and character-like way as well as abiding by the four virtues of courage, honesty, temperance, and justice. In the case here SE was not courageous in standing up for their wrong beings, not honest because they did not let the public know what they were doing at the time, not justice because they were performing illegal actions in stealing the stockholders money. In the end Madoff plead to 11 felonies and 150 years in prison.
These facts and analyses are based on an original research paper by Owen Caruso "Sterling Equities Major Investments" (2012)
Smith, Aaron. “What the Mets Knew About Madoff”. CNNMoney. Cable News Network.19 Mar. 2012. Web. 29 Apr. 2012. <http://cnn.com/2012/03/19/news/companies/madoff-mets-ponzi/?source=cnn_bin>.
Rubin, Adam. “ESPN”. Espn.go.com. ESPN. 30 July 2010. Web. 29 Apr. 2012 <http://sports.espn.go.com/new-york/mlb/news/story?d=5424674>.
Post a Comment