Essay on Adelphia Scandal - 2340 Words

The Adelphia Scandal The Dawn of Adelphia Adelphia was founded in 1952 by John Rigas and his brother Gus Rigas in Coudersport, Pennsylvania with the purchase of their first cable franchise for $300. After 20 years, the Rigas brothers incorporated their company under the name Adelphia which derived its name from a Greek word which means brothers, an apt corporate title for a business that would employ generations of the Rigas family. Adelphia was a cable television company and built its success on a strong commitment to customer care; and because of this commitment, a glorious growth spree would follow. By 1998, Adelphia passed the two million-customer milestone and served approximately 5.6 million cable television†¦show more content†¦Cohen was astounded to see the footnote disclosure and pressed Tim Rigas for details at the end of a conference call that day. Things in Coudersport quickly spun out of control as shareholders asked for clarity and transparency. The revelations and the investigati on that followed sent the company spiraling deeper and deeper into a scandal that the Securities and Exchange Commission (SEC) eventually called, one of the most extensive financial frauds ever to take place at a public company . The stock continued to fall and on May 15, 2002 John Rigas resigned as chairman and CEO. In the Securities and Exchange Commission v Adelphia Communications Corporation 2002, the SEC charged Adelphia of three specific acts. First, executives fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them in off-balance sheet affiliates. Adelphia management kept this liability off the books by allocating the co-borrowing loans among its unconsolidated subsidiaries. Debt of the subsidiary was increased and Adelphias bank debt was reduced by the same amount. It gave investors the false impression that the company was leveraging and paying off debts. The company made additional misrepresentations in public stat ements and filings to keep up this appearance as well as creating bogus transactions and fictitious documents to prove that theShow MoreRelatedAdelphia Communications Scandal Revealed Essay782 Words   |  4 PagesADELPHIA COMMUNICATIONS SCANDAL REVEALED ________________________________________ The Adelphia Communications Scandal Created Controversy. The Fraudster Got Sympathy From the Judge and Received a Light Sentence for Stealing From Old Folks. ________________________________________ The Adelphia Communications scandal broke in 2002 when a footnote in a routine quarterly earnings statement revealed that the Rigas family had borrowed more than $2 billion from the company. But they didnt pay it backRead MoreThe Adelphia Scandal Essay1114 Words   |  5 PagesThe Adelphia Scandal In 1952, John Rigas purchased his own cable company. 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As the events surrounding the Adelphia scandal unfolded in full view of the publicRead MoreThe Adelphia Communications scandal Essay1882 Words   |  8 PagesIntroduction The Adelphia Communications scandal occurred in March, 2002 when three of the original founding family members which included the father John Rigas, and two of his sons Michael and Timothy, along with two other company executives were arrested for improperly taking assets from the nation’s sixth-largest cable television company. The scam involved one of the biggest financial frauds faced by a publically held company. In the end stakeholders were forced to absorb massive losses asRead MoreThe Adelphia Communications Scandal John Rigas started Adelphia Communcations in 1952 with the800 Words   |  4 Pages The Adelphia Communications Scandal John Rigas started Adelphia Communcations in 1952 with the help of two partners, but soon bought it out. The company was taken public in 1986 and as a result would have to abide by the regulations of the SEC. By the early 2000s, Adelphia was one of the top cable companies in the United States. This was the peak of a corporation that would begin a downward spiral over the first half of 2002 as a result of fraudulent use of the company’s assets at its’ shareholdersRead MoreAnalysis Of The Book The Adelphia Debacle 1418 Words   |  6 PagesAldo Toomepuu 1 November 2015 ACG 6936 The Adelphia Debacle Some have been ensnared in the net of excessive debt. The net of interest holds them fast, requiring them to sell their time and energies to meet the demands of creditors. They surrender their freedom, becoming slaves to their own extravagance. ~Joseph B. Wirthlin Background At first glance this appears to be to another post-Enron big corporation fraud scandal. It was one of the first big cases tried after Enron. However, thereRead MoreAdelphia Communications1101 Words   |  5 PagesFirstname Lastname Instructor’s Name Course Number 20 July 2015 Adelphia Communications Adelphia is the 6th biggest cable television provider in the United States and, with various subsidiaries, gives services of cable television and local telephone service to customers in 32 states and Puerto Rico. Adelphia means brothers in Greek. It used to be one of Americas largest cable companies. John Rigas established the company and served as CEO and chairman. Johns son Tim was CFO, and Tims brothersRead MoreAccounting Ethics1315 Words   |  6 Pagesenvironment is more conducive to ethical behavior. The ethical breaches in recent times, Weygandt, Kimel, Kieso( 2012) researched that â€Å"financial press open full articles and documents facts about financial scandals at Enron, WorldCom, HealthSouth, AIG, Adelphia Communication and Cable and more. As the scandal came to light people did not play the stock market if they believe that the stock prices were rigged.† Weygandt, Kimel, Kieso (2012) researched that; â€Å"the United States government regulators and lawmakers