Rigas

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“One of the most extensive financial frauds ever to take place at a public company” (SEC.gov). This is just one phrase that flawlessly describes the situation that had been taking place in July of 2002. After (a known) three years of committing some of the worst corporate crimes; Adelphia Communications Corporation founder John Rigas was finally facing a judge and jury, at a Manhattan court house. His three sons Timothy, Michael and James, as well as two other Adelphia executives were right behind Rigas; their fate rested in the hands of complete strangers. In 1972, John Rigas and his brother founded Adelphia Communications. It was headquartered in Coudersport Pennsylvania, INCORPORATED in Delaware; and the company’s services stretched …show more content…
They were only acting for themselves, and even harmed the company in order to do so. While the hiding of figures was certainly a problem, people surrounding this case could not ignore the “eye-popping personal luxury that has marked other white-collar trials” (Corporate Scandals, NBC News). This self-dealing was the prime example of a violation of their duty of loyalty, and the Rigas’ desire to live in the lap of luxury backfired. Their own decisions created a domino effect and lead to the demise of their …show more content…
This was done in order to create a line between when shareholders are liable and when they are not. There are a variety of circumstances where this will take place, three of which Adelphia and its officers and directors violated. First, the company decided against certain actions that are required of professional corporations. They did this by lying on their annual filings to the SEC, and choosing to not file their 2001 10-k form. They also COMMINGLED ASSETS by not only using company money to pay personal and family debts; but Adelphia also combined their assets with “Adelphia subsidiaries and Rigas entities” (SEC.gov). Some of these Rigas entities mentioned by the SEC were not even related to the cable industry at all, yet they all deposited, withdrew, and transferred funds between other participants involved with Adelphia’s cash management
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