Climate Change in the Oil Industry

 

Emily Levesque

Climate Change In the Oil Industry

ExxonMobil

  

Oil is one of the United States’ largest energy sources. It’s used for many things in our day to day life, such as to run cars, generators, airplanes, and even our homes. By the end of 2019, the United States had used roughly 68% of petroleum oil on transportation, as gasoline is the most consumed oil product. Distillate fuel, also known as diesel, is the second most used petroleum product, as this is used in many pieces of equipment, heating, and electricity. Gasoline averaged around 391 million gallons per day, whereas distillate fuel averaged around 172 million gallons per day. Compared to the rest of the world, the United States is the biggest consumer, consuming 20.2% of the world’s petroleum. In comparison, the second largest consumer is China, with a much smaller 13.7%. The U.S. Energy Information Administration predicts that liquid oil, such as gasoline or petroleum, will account for about 35% of total United States energy consumption by 2050, especially since liquid oil is used by the majority of the transportation industry (Energy Information Administration).

         According to National Geographic, “Natural gas is a fossil fuel formed from the remains of plants and animals. Other fossil fuels include oil and coal.” Fossil fuels are formed underground, covered in layers of layers of decomposed organisms, soil, and sediment. As these layers continue to grow, the soil becomes extremely tight and compressed, becoming hotter and deeper as it collects. This compression and temperature difference make carbon bonds break down, producing methane, or natural gas. This is collected by drilling straight down from the surface of the Earth. Practices such as hydraulic fracturing – also known as fracking -  splits open rock formations high pressure water, chemical, or sand streams. This is extremely harmful to the environment, as it requires an enormous amount of materials. Water gets pulled not only from habitats, but also from an area’s water table, which is also known as the water level. When water level decreases, wells streams and lakes can dry or reduce, and water quality can be diminished (USGS). This process can also produce very toxic water that can leak into water sources used by society. Fracking also causes micro-earthquakes, and although they are very tiny, they can cause damage to buildings and pipelines (National Geographic). Oil spills are also a massive threat, as it’s almost impossible to fully clean. When spilled into aquatic areas, it’s difficult to retrieve over 20% of the oil spilled. Oil companies are quick to drill in places such as the Arctic, and the harsh environment makes it more difficult to clean up any mistakes (Greenpeace USA). 

 

 

         The oil and gas industry had brought a lot of good things to American economy and life, but one overwhelming threat of their practices is climate change. “On public lands along, oil and gas development are set to generate a massive amount of climate emissions. Federal lands leased to the industry in the last three years could produce as much as 5.9 billion metric tonnes of greenhouse gasses. That’s more than half the emissions that China – the world’s largest emitter – releases per year (The Wilderness Society).” Burning oil releases carbon dioxide, essentially causing the greenhouse effect. The greenhouse effect is when thermal energy is released into the atmosphere, which warms the planet in turn – refer to figure below.  When the planet warms, ice melts faster in the Artic, sea levels rise, and animals migrate to different environments (BBC News). As of 2013, petroleum oil made up 41% of the United States’ carbon dioxide emissions. Yet, despite the clean resources we have available to us, companies try harder and harder to keep oil in such high demand. “Oil companies pour millions of dollars into political campaigns, propaganda, and lobbying so that they can delay the process on renewable energy and ensure their own profits. In 2014, the oil and gas industry spent a total of $142 million lobbying the U.S. government.” It is also to note that former CEO of ExxonMobil, Rex Tillerson, was selected as former Secretary of State (Greenpeace).

 

         ExxonMobil is known as the world’s largest public oil company, as well as the third largest company in the world. The company has been in business since 1892, following the Standard Oil trust. The Standard Oil Company and Trust was founded under John Rockefeller between the years 1870 and 1911 and had controlled the majority of all oil excursions – this could also be called a monopoly. Under the Standard Oil trust, companies in the oil industry could essentially be controlled. This trust was soon diminished in a few years but became known as a holding company (Britannica 2). In short, a holding company is “a corporation that owns enough voting stock in one or more other companies to exercise control over them (Britannica 1).” In 1911 the Supreme Court ordered the trust to split into thirty-three branches. The New Jersey branch of Standard Oil was renamed to Exxon Corporation in the year 1972, becoming one of the only branches to become a multinational company. They began to work in “natural gas, coal, nuclear fuels, chemicals, and mineral ores such as copper, lead, and zinc (Britannica 3).” The company has worked in climate research for almost four decades since then, resulting in almost 150 public papers, 50 peer-reviewed papers, and 300 patents for technological advances in emissions reductions. They’ve invested $10 billion to developing lower-emission energy solutions in the past twenty years, going to enabling research and reducing emissions. Vice President of Public and Government Affairs, Suzanne McCarron, said, “ExxonMobil will continue to focus our efforts on providing the energy the world needs, while simultaneously addressing the risk of climate change by reducing our emissions, helping consumers reduce theirs, and advancing research to find new low-emissions technologies for the future.” Their climate change risk management strategy is developing innovative products and technology, managing climate change risks, engaging on climate change policy, and managing impacts on air and water (McCarron).

         ExxonMobil supported the growth of climate change research through the 1980s, but suddenly stopped their activism come 1990. The company’s manager of science and strategy and development in 1989 acknowledged that gases released by burning fossil fuels raise global temperatures significantly. “Lawmakers at home and abroad began calling for reductions in carbon dioxide emissions from fossil fuels — the lifeblood of Exxon’s business. And, in 1988, the United Nations established a panel of scientists to study the issue and make policy recommendations.” The company grew concerned about government policy, and soon companies began to develop alternatives to CFCs, or chlorofluorocarbons, which erode the ozone layer. In order to try to prevent these forming regulations, Exxon began to try to bring doubt to the public, claiming that more research was needed and that the cost of reducing these emissions were great. In 1992, they joined the Global Climate Coalition, an association of fossil fuel companies who fought these climate change regulations. They contributed almost $16 million to raise questions about climate change between 1998 and 2005, yet other sources say they spent $30 million. In 1997, the United States refused to ratify a United Nations treaty that would reduce greenhouse gasses because it would be harmful to the economy. In 2007, ExxonMobil publicly said that climate change was real and that burning fossil fuels was a huge contributor (Los Angeles Times). Many states from all over the country are suing oil companies they find responsible for damage caused by climate change, mainly for increasing air temperatures and rising sea levels. These not only cause flooding, but also forest fires that we’ve seen for the past few years in California. Connecticut has sued ExxonMobil, who is the nation’s largest oil and gas company. According to the attorney general, William Tong, this caused Connecticut to be unprepared for rising sea-level and storms. The oil industry says that it’s unrealistic to blame one industry for a worldwide problem such as global warming. Delaware claimed that 31 fossil fuel firms failed to warn the state of the hazards of their products. The city of Charleston in South Carolina has filed a climate lawsuit against big oil companies, saying that they should help with repairing flood damage. “I handled their products, and I can tell you from firsthand experience that these companies were not in any way, shape or form sharing information with us about the dangerous flooding and extreme weather their products would cause,” said Mayor John Tecklenburg. Spokesman Casey Norton of ExxonMobil said, “The claims are baseless and without merit. We look forward to defending the company in court.” A 2015 lawsuit was dismissed from two dozen younger people looking for the US to take more action to stop emissions (Grandoni).

The State of New York tried to show that ExxonMobil lied to investors by keeping two separate books for estimating the cost of complying with climate regulations. “ExxonMobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change. But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case,” said Ostrager, a New York Supreme Court judge. It was said that the NY attorney general didn’t produce any investor who was harmed and failed to show that any were misled. Massachusetts has also sued Exxon for “deceptive advertising to Massachusetts consumers and for misleading Massachusetts investors about the risks to Exxon’s business posed by fossil fuel-driven climate change – including systemic financial risk.” Other governments such as Rhode Island, San Francisco, and California are looking for compensation from oil companies for the damage rising temperatures brought to farmers and beachfront businesses, saying that they’ve created a public nuisance. Occurred in October 2018, settled in December 2019 (Grandoni and Mufson). Two states over the last few years have also begun fraud investigations into Exxon due to climate change. In addition, nine cities and counties have also sued major oil companies for climate change compensation. “The industry has profited from the manufacture of fossil fuels but has not had to absorb the economic costs of the consequences,” said Harold Koh, professor of law at Yale who served as legal advisor to former Secretary of State Hillary Clinton (Hasemver). Below is a timeline documenting these events.

 

         The stakeholders involved in this case include ExxonMobil executives such as CEO Darren Woods, Vice President Neil Chapman, and PFO Andrew Swiger (ExxonMobil). Investors are involved as well, as they are the center of the New York lawsuit, having been told incorrect information about how the company dealt with climate regulations. Most importantly, stakeholders also include not only Americans, but also the entire world as this is a climate change matter. In terms of collecting oil, those most affected would be people living in coastal areas as well as those affected by flooding and major storms. These people are all important as they were either directly or indirectly affected by the decisions of ExxonMobil, and they should therefore be considered in all court proceedings.

                Individualists look for the best possible option for long-term, self-interest. An individualist will agree with ExxonMobil, as they are working for a profit – whether or not the public agrees with their methods or not. What they had done was legal (as decided as of the most recent New York Supreme Court decision at the end of 2019), although heavily frowned upon as they were deemed “deceptive” by many state and city governments in the United States. Therefore, an individualist would argue that ExxonMobil was ethical.

         Utilitarianism is the idea that happiness should be maximized from every party involved. I think a Utilitarian would disagree with ExxonMobil in this case, as they didn’t consider investors or the general public. By the company withholding information regarding climate regulations, they are threatening not only the environment, but also the people they are supposed to provide for. Unfortunately, they are not looking for the best of all in this scenario. A utilitarian would consider ExxonMobil to be unethical.

         Kantianism asks that the company not only considers themselves, but also others. They expect companies to not consider themselves exempt from the rules, and that all people should be respected. A Kantian would consider ExxonMobil to be unethical as they are not respecting the environment or those affected. When they had publicly acknowledged climate change, it was due to public outcry and concern rather than their own morals. This is against the Formula of Humanity, which states that humanity should not be treated as a means and always should be treated as an end.

         The virtue theory looks for the proper morals of a decision. It calls you to be honest and generous as well as foster virtuous practices. It calls for self-growth and justice, and that all should be cared for and nurtured. I think someone who followed the virtue theory would see ExxonMobil’s case as unethical, as they weren’t looking for justice for communities affected by their own doing (IEP).

         In my own justified opinion, I believe ExxonMobil understands what they’re doing but refuse to properly acknowledge it, as oil is an enormous industry in the United States. Obviously, many states and major cities agree with this sentiment, and are looking for changes in the industry as a whole. In the 1980s they were supporters of climate change, and avidly agreed that oil was a large contributor to the overall problem. Soon after they changed their stance completely, which was seen by them actively trying to dismiss claims and discredit information. Their effort to discredit scientists grew so evident, that they spent around $16 million, which isn’t a small feat. I understand that oil is a very large industry and will take a very long time to dismantle or fully understand, but I agree with the states’ and their efforts to decrease the damages done. As there is so much money in oil and these companies in general, I do think it’s possible to shift their focus from things life fracking to cleaner energy sources, such as solar, wind, or water. These options are not only more sustainable than fossil fuels, but the cost of clean energy is also significantly lower. The wind energy market is also growing in the United States, which will help to “cut carbon pollution, diversify our energy economy and bring the next generation of American-made clean energy technologies to market.” Water is also a new market that has been vaguely explored, but energy would be created from waves, currents, and tides (Energy). Not only would the oil industry begin to shift to cleaner, less destructive kinds of energy, but they would also most likely earn a profit on these untapped sources.

         The company, ExxonMobil, should properly address these nationwide lawsuits and show their grievances. The people are disappointed in not only the company, but also the industry as a whole, and it’ll be a long and hard journey to redemption. First, they need to properly acknowledge climate change and how they’ve contributed to the growing issue. I also think government officials should remain neutral to their own personal ties to these companies, as that’s why the United States refused to ratify a United Nations treaty that would in turn reduce greenhouse gasses – it would’ve been harmful to the economy. Once this has happened, ExxonMobil could shift their focus to other kinds of energy. That way, they won’t have to use harmful methods to acquire these fossil fuels and can take part in a growing industry. It may take a large amount of money to start this process, but clean energy would take a lot less money to maintain than would be needed for digging for oil deep underground. This change can result in profits, as more and more car dealers are making and selling electric cars. It’s predicted that by 2040, half of vehicles on the road will be electric, and the other half will be run by fossil fuels (Reuters). That takes fossil fuels out of the transportation industry by almost half, which would already cut their future profits by a significant amount. By creating a plan to make these adjustments, I think ExxonMobil can successfully replenish their reputation while making a profit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography :

 

“U.S. Energy Information Administration - EIA - Independent Statistics and Analysis.” Use of Oil - U.S. Energy Information Administration (EIA), www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php.

“Holding Company.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/holding-company. 1

“Standard Oil.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/Standard-Oil. 2

“Exxon Corporation.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/Exxon-Corporation. 3

Groundwater Decline and Depletion, www.usgs.gov/special-topic/water-science-school/science/groundwater-decline-and-depletion?qt-science_center_objects=0.

National Geographic Society. “Natural Gas.” National Geographic Society, 9 Oct. 2012, www.nationalgeographic.org/encyclopedia/natural-gas/.

“Report: Oil and Gas Drilling on Public Lands Is Fueling Climate Change.” The Wilderness Society, www.wilderness.org/articles/blog/report-oil-and-gas-drilling-public-lands-fueling-climate-change.

“Resources and Recycling - Impact of Human Activity - KS3 Chemistry Revision - BBC Bitesize.” BBC News, BBC, www.bbc.co.uk/bitesize/gui “Oil.”

“Oil.” Greenpeace USA, www.greenpeace.org/usa/global-warming/issues/oil/.

Suzanne M. McCarron Vice President of Public and Government Affairs at ExxonMobil, et al. “Climate Change.” ExxonMobil, 9 Jan. 2020, corporate.exxonmobil.com/Energy-and-environment/Environmental-protection/Climate-change.

Dino Grandoni, Steven Mufson. “ExxonMobil Prevails over New York in High-Profile Climate Fraud Case.” The Washington Post, WP Company, 10 Dec. 2019, www.washingtonpost.com/climate-environment/2019/12/10/exxonmobil-wins-climate-change-lawsuit-new-york/.

Grandoni, Dino. “States and Cities Scramble to Sue Oil Companies over Climate Change.” The Washington Post, WP Company, 15 Sept. 2020, www.washingtonpost.com/climate-environment/2020/09/14/states-cities-scramble-sue-oil-companies-over-climate-change/.

“How Exxon Went from Leader to Skeptic on Climate Change Research.” Los Angeles Times, Los Angeles Times, graphics.latimes.com/exxon-research/.

Hasemyer, David, et al. “Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today.” InsideClimate News, 17 Jan. 2020, insideclimatenews.org/news/04042018/climate-change-fossil-fuel-company-lawsuits-timeline-exxon-children-california-cities-attorney-general.

“Executive Leadership.” ExxonMobil, corporate.exxonmobil.com/Company/Who-we-are/Management-Committee.

Internet Encyclopedia of Philosophy, iep.utm.edu/virtue/.

“Clean Energy.” Energy.gov, www.energy.gov/science-innovation/clean-energy.

“Will Electric Vehicles Really Create a Cleaner Planet?” Thomson Reuters, www.thomsonreuters.com/en/reports/electric-vehicles.html.

 

Yelp: The Unethical Behavior on Its Platform (2013 – Present)

ETHICS CASE CONTROVERSY

Timeline of Yelp

        Yelp, the online directory and customer review site, was founded in 2004. To get more than 100 million published reviews on its site, Yelp has done lots of things not only for the best of the community but also for the success of itself. In 2017, to support the LGBTQQIA community and a trans student, Gavin Grimm, who filed suit against his local school board for denying him use of the boys’ restroom at his school, Yelp allowed customers to find businesses that had gender-neutral bathrooms on its site. Airing political views through Yelp has become such a popular (and unwelcome) pastime that the site had to create “Active Cleanup Alert” in 2016, which was first implemented last year in response to the numerous political attacks to protect the businesses. Recently, on October 8th, Yelp Vice President of User Operations Noorie Malik announced a new initiative which called a “firm stance against racism” to label businesses that users have reported for racist behavior such as using overtly racist slurs or symbols. However, the only problem that Yelp did not successfully solve is about the unethical behavior on its platform.

        Yelp's been sued multiple times. People have accused them of fraudulently misleading consumers about the authenticity and quality of reviews. Businesses have accused them of extortive advertisement sales tactics, alleging that Yelp pressures them to pay for advertising. And there are multiple websites created by disgruntled people to band together against the review juggernaut. But so far, no matter how many times Yelp is sued, they prevail and emerge relatively unscathed from these legal battles. Even the Federal Trade Commission, who revealed in 2014 that they received 2,046 complaints against Yelp, took no action against them. Still, it is concerning that there have been so many complaints against Yelp, and potential future lawsuits are not altogether unlikely [4]. Based on the lawsuit, Yelp demanded the small businesses buy expensive online advertisements to artificially inflate the reviews on their online profiles. The group of small businesses claimed that this tactic produced an environment of unfair competition because larger businesses would be able to pay for the service, and small businesses would lack the funds to do so. Therefore, the larger business would have better control over its online presence and reputation, creating an unfair advantage. Rather than deny or directly address these accusations, Yelp adopted a policy of silence, and instead promoted its “pop-up” notification initiative to distract their users. [8]

Yelp now labels fraudulent reviews with Consumer Alert

        The companies involved in this and other lawsuits against Yelp see an inherent conflict of interest in Yelp’s business model. Yelp automatically categorizes businesses using public records and address information available online, and third-party users are then allowed to rate these companies. Yelp profits from selling ads to the same businesses that are being rated on its site. No matter how much Yelp denies the claims, it is easy to see why some businesses are skeptical. In 2013, Yelp reported net revenue of about $233 million, over 75% of which came from sales of advertising space. Because ad revenue makes up such a large portion of Yelp’s total revenue, the appearance is it could seek to realize huge profits by increasing ad sales and subtlety requiring businesses to purchase ad space on its website in return for posting positive reviews or leaving off the negative ones [3].

        The San Francisco small businesses created a new platform, Yelp-Sucks.com. In response, the public took notice and began to complain and contribute their own stories of reviews being removed from the site. Users added testimonials and shared the website with a larger audience, accelerating the spread of information about Yelp’s scrubbing. Again, although Yelp denied scrubbing was taking place, the user data on Yelp-Sucks.com provided evidence to the contrary and challenged Yelp’s own reputation. [8]

STAKEHOLDERS

Important stakeholders to Yelp are anyone who affects or can be affected by the organization’s actions. Mostly, businesses, restaurants, and customers are the most important main stakeholders to Yelp in this case due to one helping Yelp gaining more users as of now and the other helping Yelp gaining more success as of now. The other stakeholder is a federal law, Consumer Review Fairness Act, that Yelp helped pass in 2016 is also important for the company because it will take responsibility for the relationship between customers and the businesses. 

INDIVIDUALISM

According to Milton Friedman, the only goal of Individualism is to maximize the profit for the owner or the stockholders. Meaning, a business should focus mainly on generating the highest possible amount in profit and should not attempt to be socially responsible, “Spending money on resources, employees, and donations to causes is wrong because it is essentially stealing from the owner or owners of the company.” (Salazar 17) More than that, it is also necessary for a business to operate within the laws and rules of the state that it regulates it. 

        According to the theory of Individualism, Yelp company has failed to maximize the profit for the stockholders. Yelp has introduced lots of alerts to their website just for their users. They want to attract new users and also more users with their new alerts. The only problem is that they didn’t really care about the businesses and the restaurants, who are also their main stockholders, on their apps based on the fake reviews and political reviews from their users which could bring these businesses to the bottom. With the amount of people who use Yelp, it's no surprise that looking over these reviews takes time. Since Yelp is trusted as the online directory and customer review site, one negative fake review can destroy a whole business within a short period. 

Geoff Donaker - Chief Operating Officer

        In order to make money, Yelp advertised businesses who paid Yelp to feature their establishments at the top of relevant searches. In 2009, allegedly, Yelp employees have contacted businesses, offering to remove negative reviews for a fee for "advertising", though Yelp denies this is something they do, “We wouldn't be in business very long if we started duping customers," Chief Operating Officer – Geoff Donaker said. His denials are challenged by nine local business owners and also by a former contract employee who worked with Yelp in its early days and is still close to some Yelp employees and only agreed to be interviewed if granted anonymity [5]. Based on what they said to him, their action is not illegal or unethical; they just helped the little guy by moving bad reviews for his benefit. So, according to Individualism, Yelp is permissible because they are profiting and not doing anything illegal under the law. 

UTILITARIANISM

The goal of Utilitarianism is to maximize happiness for all conscious beings in a long-term period, not just for one individual or one company, that are affected by the business action (Salazar 19). The customers who used Yelp will be happy with how Yelp did for them, such as “Customer Alert”. Yelp will be happy since they think that they help the community a lot through what they did for them. However, the businesses and restaurants will be unhappy with how Yelp brings to them the pressure for “advertising”. 

Yelp was successful by introducing lots of new alerts for helping the community and the users of Yelp. However, Yelp was unsuccessful by not caring about their partners – the businesses and the restaurants. In reply to the fake negative reviews, instead of taking these down, Representatives allegedly would offer to remove or hide the reviews in exchange for agreeing to buy an advertising contract with the site with an expensive price. For a long-term period, these businesses will be stressful to pay Yelp with an expensive price for staying at the top of its website. A veterinary hospital in Long Beach, California experienced similar tactics as I mentioned above about paying for hiding negative reviews. When the hospital contacted Yelp to address false and defamatory claims in a review it received on the site, Yelp allegedly refused to remove the comment unless the hospital agreed to pay $300 a month [1]. Therefore, a utilitarian would view this case unethical because of the consequences Yelp brought to their stockholders. 

KANTIANISM

        

        While Utilitarianism looks at the consequences of an action, Kantianism looks at the good will of a person. According to Kant, a person must always act as an end and never simply the means. “Always act in ways that respect and honor individuals and their choices. Don’t lie, cheat, manipulate or harm others to get your way. Rather, use informed and rational consent from all parties.” (Salazar, 20)

        Under the ethical theory of Kant, Yelp failed to treat the businesses and the restaurants with a respectful way, instead treating them as a mere means. Yelp was using the threat of harm through negative reviews to force businesses to buy ads. If the owners declined to advertise, the positive reviews disappeared, only the negative reviews stayed. Even though the reviews were untrue, the complaints still exist on the businesses’ review site. This year, a customer complained about being called a racist slur by a manager at the pub, but the incident actually happened at a different establishment. Management reported the comment to Yelp, but the complaint still exists on the company’s page. “I think in many ways it’s a very good idea, but one negative comment can destroy a whole business,” he said. [2]

        Yelp also lied to their users about the authenticity and quality of reviews. Yelp’s use of “community managers, scouts, and ambassadors” to supplement its automated screening does not indicate that Yelp’s directors and officers knew that any significant number of reviews were not authentic or firsthand, beyond what defendants represented to the public. The company itself also admitted its system was not foolproof, and that some filtered reviews could be genuine. [6] Therefore, not only Yelp treats their partners as a mere mean, but Yelp also treats their users as a mere mean. 

VIRTUE THEORY 

        According to Virtue Theory, the most important thing is neither about the outcome, nor the consequences of an action. It is about a person’s character, and how his or her actions reflect who he or she is. There are four cardinal virtues that everyone needs are courage, honesty, temperance, and justice. If one of these is lacking, then the whole will be collapsed. Courage is the quality of mind that enables a person to take risks, face difficulty, danger, and pain without fear. Honesty is the vital role in every aspect of human life that requires honesty, truthfulness, and loyalty. Temperance is having reasonable expectations and desires for yourself and for others. And lastly, justice is the fair treatment among people.

Based on this theory, Yelp lacks all four of cardinal virtues. About honesty, they lied to their users about the authenticity and quality of reviews. Only by paying for “advertising”, businesses can get rid of negative reviews on Yelp sites. Users will wonder about how authentic Yelp is. Yelp is also lacking courage. Instead of admitting the lawsuits in 2014 about manipulating ratings based on ad purchases, they keep denying and being silenced. Yelp lacks justice because of the unfair treatment between small businesses and large businesses. For those small businesses, it is hard for them to stay on the top Yelp’s page by paying an expensive price for each month. This could lead to a loss for every small business in the world nowadays. Lastly, they lack temperance because they do not have a reasonable expectation for the company. Instead of fixing the problem and discussing with businesses against them, Yelp kept silent and promoted its “pop-up” notification initiative to distract their users.

JUSTIFIED ETHICS EVALUATION

        In my opinion, Yelp’s actions were unethical and unprofessional. They know what they do is wrong and is unfair for their partners and their users. Because of money, Yelp lied to their users about the authenticity of the reviews and forced their partners to pay for “advertising” with an expensive price in order to take down the fake reviews and negative reviews. Instead of admitting their unethical behavior, Yelp still kept silenced and denied all the lawsuits that they were accused of. However, based on the laws, there is nothing that can sue Yelp for what they have done since no evidence has been found. Even though there is evidence, Yelp is still not being sued by saying that their action is illegal or unethical; they just helped those businesses by moving bad reviews for their benefits. So, such tactics may be legal, but clearly raised ethical concerns.

ACTION PLANS

        The current issue of Yelp is that they lied to their users about the authenticity and quality of reviews and used the threat of harm through negative reviews to force businesses to buy ads. In order to solve this problem, Yelp has to admit their unethical behavior and apologize to their users and their partners. Yelp has to stop doing these things and gains more trust from the businesses by treating them nicely with the first month of advertising for free price. The company also needs to develop a code of ethics that details its ethical obligations to users of the site and its ratings with respect to ethical values such as honesty, integrity, responsibility and accountability. 

Yelp’s current mission statement is “to connect people with great local businesses”. My recommendation for the new mission statement is, “We, Yelp, promise to connect people with great local businesses by building trust in an honesty, integrity, responsibility and accountability relationship”. With this new mission statement, Yelp successfully addresses what they need to do for their users and also for their partnership with businesses with a detail of its ethical obligations. By building trust in an honest relationship, Yelp needs to be loyal and be truthful to their users and their partners. They should not take down the negative reviews even though they are fake or bad. By building trust in an integrity relationship, Yelp should not lie to their users and their partners. They should be dependable and following through on commitments such as stop forcing small businesses to buy ads. By building trust in a responsibility relationship, Yelp has to be responsible for their actions. In order to gain trust, they need to stop keeping silenced, take responsibility for what they have done, and work on it to change their actions. By building trust in an accountability relationship, Yelp has to do all good things for their users, their partners, and also for the community. 

To prevent this problem from occurring again, Yelp needs to discuss with their User Operations team about improving their system for identifying fake reviews. They can investigate the types of cheating and unethical behaviors that economic incentives may prompt and what causes this differential behavior to exist. They also need to develop a code of ethics that details its ethical obligations to users of the site. They need to recreate teams who are responsible to work with their partners about the commitments. This team needs to put honesty and integrity as the priority for their partners. To help the company to flourish after the controversy, Yelp needs to replace the VP of User Operations as a new person who knows how to improve their system for identifying fake reviews, not only focused on introducing new alerts. Yelp also needs a representative face who has all four cardinal virtues in order to face the dangers and change it. In the case of bad publicity due to the ethical difficulty it faced, the marketing team needs to find the problems and the cure for the problems in order to respond to the media as soon as possible. Marketing team also needs an effective method to fix it as soon as possible and always apologize first. 

By putting ethics as the priority, my plan will always find a way to satisfy not only the users, but also our partners. By training the employees with a code of ethics, Yelp will be more successful and will do lots of good things for this community. 

References

[1] Chris Foresman - Feb 25, 2. (2010, February 25). Yelp facing class-action lawsuit over extortive "ad sales". Retrieved November 21, 2020, from https://arstechnica.com/tech-policy/2010/02/yelp-facing-class-action-suit-over-extortive-ad-sales/

[2] Gross, J. (2020, October 09). Yelp Says It Will Mark Pages of Businesses Accused of Racist Conduct. Retrieved November 21, 2020, from https://www.nytimes.com/2020/10/09/business/yelp-racism.html?searchResultPosition=1

[3] Is it Ethical to Allow Yelp to Manipulate Ratings Based on Ad Purchase? (2014, October 23). Retrieved November 21, 2020, from https://www.workplaceethicsadvice.com/2014/10/is-it-ethical-to-allow-yelp-to-manipulate-ratings-based-on-ad-purchase.html

[4] Lafuente, C. (2017, March 03). Secrets Yelp doesn't want you to know. Retrieved November 21, 2020, from https://www.mashed.com/45890/secrets-yelp-doesnt-want-know/

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[6] Stempel, J. (2015, November 27). Yelp prevails in lawsuit over authenticity of its reviews. Retrieved November 21, 2020, from https://www.reuters.com/article/us-yelp-reviews-lawsuit-idUSKBN0TG1T220151127?feedType=RSS

[7] Salazar, Heather. The Business Ethics Case Manual. n.d.

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Luckin Coffee: Investors Lose Millions (2019-2020)

 

Luckin Coffee: Investors Lose Millions (2019-2020)

Abstract

    Luckin Coffee, a Chinese company was recently delisted from the Nasdaq for fraudulent behavior. They were able to inflate their sales numbers totaling 2.12 billion yuan ($300 million) and get away with it before their shares even became available to investors on the New York Stock exchange. By taking advantage of grey areas in financial reporting and auditing standards in China in order to report these inflated sales, they established a tremendous amount of excitement amongst investors in the Western world. Luckin Coffee, which claimed to be the next Starbucks of China was able to lie their way into boosting the growth of their stock so quickly that it almost seemed too good to be true. Unfortunately, investors and professional firms found out it really was and were blindsided by the lies Luckin told them. Investors lost millions, and Luckin added to the distrust that the United States has with Chinese companies, which further damaged Chinese companies that are hard working and do the right thing when it comes down to business.

    Using the ethical theories of Individualism, Utilitarianism, Kantianism, and Virtue theory the actions of Luckin Coffee can be further analyzed and reveal why they specifically went wrong. Individualism calls for profit within the law, Utilitarianism’s goal is to maximize happiness for all of those involved (stakeholders), Kantianism is meant to bring humanity into business, and virtue theory involves courage, honesty, self-control, and justice. According to each of these theories, the actions of Luckin Coffee were completely wrong. By incorporating these theories in their business, they could have prevented the downfall, and delisting of their shares, which led to damaging not only themselves, but many other parties as well.   

                                                                                   (CEO Jenny Zhiya Qian at Luckin's IPO - (Forbes))

Ethics Case Controversy

    In May of 2019, Luckin Coffee went through its IPO on the New York Stock Exchange. Investors were very excited about this company, seeing as how their stock price surged 18% on the day it was introduced to the Nasdaq, raising $561 million (Lucas). According to Bloomberg this excitement could be attributed to Luckin’s, “promises to defeat Starbucks.” It seems as though investors in the US saw this as a tremendous opportunity seeing how successful Starbucks has been over the years. Their plan seemed simple, “offering lower-priced coffee, primarily for takeout and delivery,” and providing an app as well which would allow them to be called a “tech company (Wang & Campbell).” This was a solid strategy because according to Bloomberg, “investors like apps and disruption.”

 (Picture on day of Luckin’s IPO (CNBC-Weizent))

    Like most new companies, “Luckin wasn’t profitable, and wasn’t sure when it would be. The business plan was to spend more to keep expanding and offering discounts to increase brand awareness (Wang & Campbell).” Despite this, firms such as Joy Capital, GIC, Blackrock Inc., and Credit Suisse Group, began pumping money into Luckin (Wang & Campbell). Not only were investors being fooled, but large organizations were comparing Luckin to Starbucks as well, “which generates a big chunk of its revenue from Chinese consumers (La Monica).” If only they had looked deeper into Starbucks and why they are successful in China, they may have figured that Luckin’s sales numbers were a huge red flag.

    Bloomberg stated that, “Starbucks had prospered in China by selling much more than just coffee and offering a comfortable place outside the home or office to meet friends or study. Luckin did the opposite: Most of its locations are more like kiosks, with little or no seating. Orders have to be placed and paid for with Luckin’s app.” Although Luckin’s plan was to do this to ultimately decrease rent, and labor costs, their approach would cost them (Wang & Campbell). In fact, in 2018, “Luckin disclosures show, its operating expenses were almost triple its sales (Wang & Campbell).”

    Another important point is that Chinese consumers prefer tea over coffee. This proved to be a struggle for Starbucks when entering into Chinese markets, thus why their strategy was different as described in the previous paragraph. “In 2018 annual per capita coffee consumption in China had reached just about six cups, compared with more than 200 cups in Taiwan and 388 in the U.S. (Wang & Campbell).” If aware of this statistic the intense and rapid growth of Luckin may have seemed a little too good to be true, given that their strategy was to provide cheap coffee.

                                                                                      (COO Jian Liu celebrating Luckin's IPO - (Hope))

    Eventually, Luckin’s lies caught up with them when investigators looked further into Luckin’s reports of stellar sales. It was found that Luckin’s, “2019 sales were inflated by 2.12 billion yuan ($300 million) and it’s expenses by 1.34 billion yuan ($190 million) that year. The fraud began in April 2019, a month before Luckin made its public market debut in the United States (Lucas).” All the investors were being lied to from the beginning and the reasons for Luckin’s skyrocketing stock price were built on pure deceit and manipulation. “Evidence shows that former CEO Jenny Zhiya Qian, former COO Jian Liu and other employees who reported to them fabricated transactions and used third parties with ties to company employees to funnel funds supporting the falsified transactions to Luckin (Lucas).” CNBC told of a report from the Wallstreet Journal that employees were able to fake these sales, “by purchasing tens of millions of vouchers that could be exchanged for cups of coffee through fake buyers and obscure companies. Many of the companies had ties to [co-founder and chairman Charles Zhengyao] Lu.”

    Since the company first came on the Nasdaq it’s shares went from around $17, to as high as $50. After the fraudulent behavior came out, the share price dropped to as low as $1.50, which can be seen in the chart from CNBC. 

 (Chart of Luckin Coffee Stock Price (CNBC-Weizent))

    Investors took a hard loss especially if they bought shares around the $25-$50 mark and were unable to sell before the drastic drop which happened in a very short period of time. With the technology we have today, stock prices react almost instantaneously to news which travels at a rapid rate. Investors holding the stock at this time had no warning, and no time to react, leaving them with egregious losses.

    After this story shocked the market, other Chinese stocks were adversely affected as well. Luckin’s actions spread fear in the market for investors in Chinese stocks, along with other Chinese companies who were similarly accused.

“Shares of China’s version of Netflix, iQIYI IQ, 3.22%,  are up only 12%, even though it would seem to be one of the biggest beneficiaries of COVID-19 lockdowns. Last month, short seller Wolfpack Research issued a report saying that the company has inflated revenue since before its 2018 IPO… Shares of another potential beneficiary of a global lockdown, Douyu DOYU, -2.52%, a developer of a videogame streaming service, are down about 28% since that company’s IPO in July 2019. The company is now the target of shareholder litigation in the U.S., alleging that it made false or misleading statements in its IPO regulatory filings (Poletti).”

    Although it would seem discriminatory to think that all Chinese companies are fraudulent, they are certainly capable of it. This is because of the difference in financial reporting policies in the U.S. and in China. The problem lies in the accounting standards because, “accountants who sign off on company financial statements in China don’t have access to those company’s actual books and records, only what they are allowed to see (Poletti).” This loophole is what adds to the distrust between the U.S. and China, and policy makers are pushing to change this. The rule of thumb being that if companies from China want to put their stocks on exchanges in the U.S, they should have to abide by the same standards. Senator Marco Rubio of Florida and Senator Robert Mendez of New Jersey are trying to pass the “Equitable Act Bill,” which would result in the delisting of companies on U.S. exchanges who, “fail to comply with auditing regulations.”

    Ultimately, if this bill were to be passed it would help to weed out the bad companies from the Chinese companies who are doing the right thing. If we look at Luckin and these other malicious companies, they are only making the problem of distrust worse. Zhang Yifan, a private investor at Commando Capital had a good point that dishonest Chinese companies, “will have an impact on Chinese companies who do things properly when they try to raise capital in U.S. stocks… it will indeed lead to a very serious crisis of trust. It will take years to ease (Stevenson & Wong).” A stock that I personally invest in (NIO) was even temporarily affected and dropped 9.4% on April 2nd due to the Luckin scandal even though they had no reports of fraud (Seeking Alpha). The actions of Luckin not only affected their own investors, but other innocent and hardworking Chinese companies as well.

(Timeline of events)

    Looking at the issues regarding Luckin Coffee, ethical theory can prove useful in analysis. Individualism, Utilitarianism, Kantian Theory, and Virtue Theory in particular can all show how Luckin’s actions were unnaceptable, and lead to the conclusion of what they should have done differently. The stakeholders(those affected by the scandal) involved in the analysis are investors, CEO Jenny Zhiya Qian, former COO Jian Liu, co-founder and chairman Charles Zhengyao, and Chinese companies in general.

Individualism

    Individualism theory’s main idea is that one should try to maximize profit, but do so within the law. Under Indivualism the actions of Luckin are not ethical, this is because they failed to maximize profit and they broke the law.

    When they were reporting inflated sales numbers they were proffiting and providing profit to their shareholders, but this didn’t last for long. By tricking their investors they made profit but at the cost of breaking the law. By going against China’s “SOX,” which could be compared to the Sarbanes Oxley Act in the United States, they failed in respect to being ethical. Yu Lu and Diandian Ma explain in their journal, ““China SOX” What Is It and Why Was It Introduced?,” that SOX was established to promote internal control. This, “internal control is to reasonably assure that management and operations are legal, the assets are safe, financial report and relative information are true and complete, the effectiveness and efficiency of operation are improved and development strategy is realized.” By reporting inflated numbers they violated SOX, because the numbers were untrue and incomplete which made it illegal.

The profit that they made was short-lived and after the scandal went public they lost a massive amount of money when their stock dropped, along with their investors. When this happened they destroyed their reputation through their own actions which set them up for their own finacnial demise. They failed to maximize profit, and they failed to do so within the law. 

Utilitarianism

 When it comes to Utilitarianism, in order to be ethical the goal of a company’s actions must aim to maximize happiness for all stakeholders. When breaking down all of the stakeholders, Luckin fails being ethical under Utilitarianism.

Starting with the investors, it can be argued that the investors who rode the stock up and sold for a profit were happy and saw tremendous returns. However, we need to look at the group as a whole. Some may have profited, but as a whole, millions of dollars were lost from holding Luckin’s stock. After the scandal broke out and the price dropped, those who held the stock lost basically all of their money. Just before the announcement the price was around $25 and dropped to around $1.50, so if one owned 100 shares at an average of $25 a share during this time, the drop would have cost them -$2,350 (1566.67% loss), with their initial investment being $2,500. This example puts the sheer loss into perspective, and shows how those who invested well over $2,500 lost a lot more if you input a larger number. For example, if one had invested $1 million at the same price, their 40,000 shares would be worth $60,000 at $1.50 leaving them with a loss of $940,000.

The COO, CEO, and co-founder would have all been happy while profiting off lies, but after the scandal was publicized, they were not happy. They not only lost money, but their stock was delisted off the Nasdaq. Amongst the associated firms there were also $9 million in fines, which they definitely were not happy about (France-Presse).

Lastly, as mentioned before, Chinese companies were affected in general by the stigma of all Chinese companies being fraudulent. This is an even larger problem, because it affects the relationship between investors in the U.S. and the hardworking companies in China who are honest about their operations. Although there are multiple companies who take advantage of differences in reporting standards, this issue still needs to be addressed. The bill that I had mentioned may help separate the bad companies from the good. For now, the other companies affected would be unhappy as a result of Luckin’s actions too.

Kantianism

The third theory is Kantianism, which is based on the Formula of Humanity. This means that to be ethical under Kantianism the company must treat others as both a means and an end, instead of as a mere means. An example of failure would be to treat people as though they don’t matter, and only use them to achieve a goal. Also, in Kantianism it is important to not manipulate, or deceive others in pursuit of a goal. Lastly it is important to allow others to make their own decision, and have a say, without manipulation.

Luckin fails again under this third theory because they are treating their investors as a mere means. By lying to them and manipulating them to believe that their sales were much higher than they actually were, they were in pursuit of profit without thinking of how it would affect their investors. They also took away the investors ability to make a well-rounded and smart decision to purchase the stock because they were fed inaccurate financial information. The investors were clearly manipulated and used as a mere means to an end in this case.

Additionally, Luckin took advantage of the loophole within the financial reporting standards in China and the United States. By doing this they used their own country as a means and not an end. By doing this they not only made themselves look bad, but made China look bad and added to the distrust that already exists between our countries. They deceived everyone by twisting the rules in their favor to profit off investors.

Virtue Theory

The last theory, Virtue theory consists of four key virtues. These virtues are courage, honesty, self-control, and justice. To be ethical, a company must follow each of these key virtues as guidelines to improve their image and relationships within the business world. By doing this they can become successful financially, as well as make a positive difference on society. Unfortunately, Luckin has done the opposite in this case, but before I get into the analysis, I’ll explain each key virtue in more detail.

Courage is about setting hard goals, that require hard work, and always following them through to the end. Honesty is about not lying, even if it is easier to lie. Self-control is about being in control of our actions and doing the right thing even when its harder to do it. Lastly, justice is about doing what is fair for everyone.

They failed to act courageous by being the opposite; cowardly. They reported fake numbers in order to look better, when in reality they were struggling. They started with a courageous goal to compete with Starbucks, a company that is well-known and respected, but did not follow through with courageous actions in their business plan. Secondly, they failed by being dishonest. By fabricating their sales, they lied to the world about who they were as a company, which ultimately showed their true self. Additionally, Luckin did not demonstrate self-control because they could have done the right thing. Even though doing the right thing (being honest about their struggle in sales) would have been the harder thing to do, it would have been better for them in the long term. Virtue theory is about doing the right thing even in these circumstances. Lastly, they failed the key virtue of justice. It was unjust for them to lie because it was not fair to the investors, and other Chinese companies affected.

Justified Ethics Evaluation

            Personally, I feel that the actions of Luckin coffee were unacceptable and completely unethical. Looking further into their business model, and simply the amount of people who actually drink coffee in China, they set themselves up to fail. They compared themselves to Starbucks, who was successful in China for reasons other than just selling coffee, and put themselves out there as a “tech company” by making an app that users had to order their coffee on.

Seeing as how they were lying about their sales, even before they listed on the Nasdaq, listing their shares in the United States almost seemed like a ploy to manipulate investors in the Western world and scam them of their money. The fact that they were dishonest before even listing their shares goes to show they knew exactly what they were doing was wrong, and their decision was made out of pure greed.

Although I could find no information about higher ups profiting off selling shares when they were boosted so high, their net worth still increased as the price went up and their ownership in the company was worth more. Whether or not they cashed out at the right time simply does not even matter. They still deceived so many people into thinking that Luckin Coffee was something it was not, which further damaged themselves and others.

Action Plan

Luckin’s problem boils down to their lies at the end of the day. The first thing that they need to do in order to overcome the situation is to admit to them and to apologize. By doing this they can start to rebuild the trust that they initially broke amongst investors and firms. Additionally, it would be wise for them to agree to Western auditing and financial reporting standards. Although they are not required to do this as a Chinese company, if they ever want to gain the trust of investors, they are going to have to make a change. Also, they should make a promise to not lie and be completely up front, even if they are not performing as well as they would like to be. By doing this, they will not blindside anyone again. It is easy to make a promise, but on top of this they should take the promise very seriously. Instead of simply telling people what they want to hear, they need to follow through with the promise as well.

Luckin Coffee’s new mission statement should be, “our mission is to provide affordable coffee by people you can trust. Through the change in technology and our app, we will provide a positive experience in addition to what’s in your cup.” Their current mission statement is, “our mission is to be part of everyone's everyday life, starting with coffee. We are China's second largest and fastest-growing coffee network, in terms of number of stores and cups of coffee sold,” which can be found on public document F-1 from the SEC for Luckin Coffee. I feel as though their mission statement is too directly shoving growth in the face of the investors. Instead of basing the company on pure growth to make it an attractive investment, Luckin needs to focus more on the consumer. By doing this they will grow in a more steady and organic manner and establish their brand with the consumer, which will eventually attract investors.

They should also establish some new core values to integrate in their business plan. The first should be borrowed from virtue theory being honesty. This is because they have lost a lot of trust and need to earn it back. In order to do this, they must be completely transparent and answer every question with complete honesty. Secondly, they should value hard work. I think this would be beneficial, instead of cheating their way to the top like they did before. By promising to work hard to strategize and achieve their goals they will go much further. Additionally, Luckin must value customer relationships. Like I mentioned before, if Luckin focuses on the consumer they will be able to establish their brand to promote growth. Lastly, they should focus on app functionality. To make their business model work for them they should work on making their app the best it can be. By doing this, consumers will enjoy using the app’s features and it will make ordering their coffee easy and free of frustration.

Luckin should also establish a zero-tolerance policy involving any sort of corruption like they saw before. In addition, there should be regular investigations into processes within the business, and all red flags should be looked into. By doing this they can efficiently solve any problems, and fire anyone who is involved in fraudulent behavior.

This new plan will help repair the trust problem between investors and Luckin, boost profitability, and prevent more fraud from happening within the company. By marketing their brand in a more consumer friendly manner, they will sacrifice their aggressive marketing approach towards investors, which will make the company’s growth safer and steadier.

Conclusion

            Ultimately, Luckin made some big mistakes and at the end of the day every company isn’t perfect. We are all human and can make mistakes, learn from them, and try to make things right. Whether the world of investors decide to trust Luckin again is their own decision, but Luckin will have to put fourth the effort if they want to continue growing as a company. By keeping the ethical theories Individualism, Utilitarianism, Kantianism, and Virtue Theory in mind, they may be able to pull it off. They could also benefit from a new action plan which may give them hope in achieving the dream the founders originally had for Luckin Coffee.

-Jacob Neal

Works Cited

·       France-Presse, Agence. “Luckin Coffee, Associated Firms Fined $9M Over Scandal.” CNS, 22 Sept. 2020, www.courthousenews.com/luckin-coffee-associated-firms-fined-9m-over-scandal/.

Hope, Blaise. “Lu Zhengyao, the Billionaire behind Luckin Coffee's 'Burning Money' Strategy.” South China Morning Post, 23 Apr. 2020, www.scmp.com/magazines/style/news-trends/article/3081256/luckin-coffee-mastermind-lu-zhengyao-how-chinese.

·       La Monica, Paul R. “Chinese Coffee Company Luckin Will Be Delisted after Defrauding Investors.” CNN, Cable News Network, 26 June 2020, www.cnn.com/2020/06/26/investing/luckin-coffee-delisted/index.html.

·       Lu, Yu, and Ma, Diandian. “‘China SOX’: What Is It and Why Was It Introduced?” Wseas Transactions On Business And Economics, World Scientific and Engineering Academy and Society, 2017, www.wseas.org/multimedia/journals/economics/2017/a925907-035.php.

·       Lucas, Amelia. “Luckin Coffee Says Independent Probe into Sales Fraud Is 'Substantially' Complete.” CNBC, CNBC, 1 July 2020, www.cnbc.com/2020/07/01/luckin-coffee-says-probe-into-sales-fraud-is-substantially-complete.html.

·       Poletti, Therese. “Luckin Coffee Shows How Risky Chinese IPOs Can Be, but Investors Are Just Not Listening.” MarketWatch, MarketWatch, 20 May 2020, www.marketwatch.com/story/chinese-ipos-are-risky-but-theyre-not-going-away-anytime-soon-2020-05-12.

·       Stevenson, Alexandra, and Wong, Edward. “Chinese Coffee Chain's Scandal Renews U.S. Calls for Oversight.” The New York Times, The New York Times, 30 Apr. 2020, www.nytimes.com/2020/04/30/business/luckin-coffee-china-fraud-wall-street.html.

“Stock Picks, Stock Market Investing.” SeekingAlpha, seekingalpha.com/news/3557916-nio-lower-after-luckin-coffee-flameout.

Wang, Jennifer. “Chinese Starbucks Competitor's IPO Briefly Makes Its Female Founder A Billionaire.” Forbes, Forbes Magazine, 17 May 2019, www.forbes.com/sites/jenniferwang/2019/05/17/chinese-starbucks-competitors-ipo-briefly-makes-its-female-founder-a-billionaire/?sh=689e64a6137e.

·       Wang, Selina, and Campbell, Matthew. “Luckin Scandal Is Bad Timing for U.S.-Listed Chinese Companies.” Bloomberg.com, Bloomberg, 29 July 2020, www.bloomberg.com/news/features/2020-07-29/luckin-coffee-fraud-behind-starbucks-competitor-s-scandal.

·       Weizent. “Fraud at China's Luckin Is a 'Great Morality Tale' for Investors, Says Analyst.” CNBC, CNBC, 7 July 2020, www.cnbc.com/2020/07/06/investing-fraud-at-china-luckin-coffee-fraud-case-warning-for-investors.html.