Which were the key Governance-Risk Management issues?
Adelphia was a Delaware corporation headquartered in Coudersport, Pennsylvania. Adelphia was founded by John J. Rigas in 1952 in Coudersport, Pennsylvania, a small town of approximately 2,500 residents, located in the north-central part of the state. At the time it was charged by the SEC, it owned, operated, and managed cable television systems and other related telecommunications businesses. Adelphia was controlled by the Rigas family, four of whom were members of Adelphia’s top management. In total, the Rigas family controlled more than 75 percent of Adelphia’s voting shares. Moreover, Peregrine Systems, Inc. was an enterprise software company, founded in 1981, that sold enterprise asset management, change management, and ITIL-based IT service management software. Peregrine Systems was founded in 1981 in Irvine, California. The founders and employees were Chris Cole, Gary Story, Ed Beck, Kevin Keyes and Richard Diederich. Although both companies have something in common. Adelphia and Peregrine Systems marked the history of the United States and affected the American economy at large scale, committing fraud and causing millions in losses. In the Adelphia case, the responsible for the fraud and the losses of millions of dollars of the company were Rigas family. Known fraud at the company can be divided into four general categories according to SEC and SOX complaint. The first is hiding debt in unconsolidated subsidiaries. The company made further misrepresentations in public statements and filings to keep up this appearance as well as creating sham transactions and fictitious documents to prove that the debts had been repaid. The second category of fraud was the intentional misstatement of the company’s performance to meet analyst’s expectations and mislead investors that Adelphia exceed their expectations for growth. The company provided false information about the extent of cable plant upgrade and...
Please join StudyMode to read the full document