From the e-Activity, examine ethical behavior within firms in relation to financial management. Provide two (2) examples of companies that have been guilty of ethics-based malfeasance related to financial management and determine why their comeuppance was deserved.
The two companies that I focus on in this section are Goldman Sachs company and WorldCom in the telecom world.
Goldman Sachs was charged by the securities exchange commission, with fraud because the company developed and marketed an artificial collateralized debt system. Paulson & Co had the same invested and at stake with in the equity of ABACUS as believed by ACA. In circumstance, they did not have a concern in the success. By October. 24, 2007, the investors were defrauded by omitted facts or misstatements which led to downgrading of 83% of the RMBS in the ABACUS portfolio and 17 percent were on negative watch. (SEC Charges Goldman Sachs with Fraud concerning structuring and marketing of CDO Tied to Subprime Mortgages in 2010. Goldman established to pay $550 million in a settlement (Duggan, T. 2013). The vice president of Goldman was found liable for fraud too.
The WorldCom scandal is another well-known unethical scandal. WorldCom submitted the largest bankruptcy filing in United States’ history after admitting improperly accounting for more than $3.8 billion dollars in expenses. The company used acquisitions to spurt large growth. Two of WorldCom’s acquisitions included MCI Communications and MFS Communications (UUNet). This caused WorldCom to appear more favorable on Wall Street, and many banks, brokers, and investors gave strong buy recommendations. This was not unethical; however, what investors and others were to uncover in the coming years, was.
Chief Executive Officer Bernie Ebbers led the company’s stock to increase from pennies, to more than $60 per share. Where the unethical behavior of WorldCom occurred was in financial reporting. The company would write down millions of dollars in assets it acquired.
This is unethical because it gave a false picture of how the company was truly performing for investors as well as competitors. Their practice of recording capital expenses rather than operating expenses was against the generally accepted accounting principles (GAAP) WorldCom had an adjustment of $9 billion between 1999 and the first quarter of 2002 (Moberg, 2013). After the government denied the acquisition of Sprint in 2000, WorldCom later filed for bankruptcy in July 2002
From the scenario, recommend two (2) actions that Trevose Fitness Center (TFC) could take in order to raise capital that will, in turn, enable it to reach its expansion goals. Defend your response. Support your recommendation with two (2) real-world examples of successful implementations of these actions.
It is stated in this scenario that Trevose Fitness is a corporation and therefore, the organization does not have an owner that can borrow money personally. On the other hand, a corporation has the capacity to borrow fund on its own. This means that the organization can obtain credit either through lines of credit or through traditional commercial loans.
From the scenario, Trevose Fitness Center (TFC) has the goal of expansion. TFC needs to find ways to raise capital in order to make this a reality. There are numerous ways that they can go about acquiring the funds need to expand. The following are the two examples that the company may use in acquiring the funds needed.

Using internally generated funds from the business
These include money retained from the profits of the business after paying tax and settlement of shareholders dividends. The company needs to be careful to ensure it does not divert funds meant for other business operations.
Owners’ personal credit
The second option includes the owners own personal credit. Though this is meant for small business startups, it could be used to raise funds. It may include taking a home equity loan or withdraw from an IRA.
References
Duggan, T. (2013). How Do Ethics Affect the Financial Results of a Company?
Moberg, D. (2013). WorldCom.