Integrity, Objectivity, and Ethics in Business Loan Loss WoesDuring the economic crisis of 2008, many of the largest U.S. banks were accused ofhaving provided mortgages to marginally qualified borrowers. Such loans, called"sub-prime" and "Alt-A" loans, were made to earn mortgage fees. When theborrowers were unable to pay their mortgages, the banks incurred large losses ondefaulted loans. These losses were so large that the U.S. government had to providemoney (TARP funds) to many banks to bail them out of their financial distress.During the middle of the crisis, the FASB voted to provide banks more flexibility in applying fair valueaccounting for bank assets, such as defaulted loans. These FASB rule changes allowed banks tominimize the impact of their defaulted loan write-downs and improve their earnings. Some criticizedthe FASB as succumbing to political pressure and reducing overall financial statement fairness.Source: lan Katz, "FASB Eases Fair-Value Rules Amid Lawmaker Pressure," Bloomberg, April 2, 2009.

The 2008 economic crisis, often referred to as the Great Recession, stands as one of the most…

Answered: During the economic crisis of 2008,…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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1) In the years that the Crazy Eddie story occurred, a large amount of retail transactions were conducted by cash or check, whereas today these retail sales would primarily be paid by debit or credit card. Also, during the Crazy Eddie years, internet shopping was not available. Explain why the Crazy Eddie story would be unlikely today. 2) Consider the difference between asset misappropriation crimes and financial statement fraud. List at least 6 different fraud schemes conducted at the Crazy Eddie business and identify whether each one is either asset misappropriation, financial statement fraud, or other fraud types. 3) Identify by year ranges three different time periods when the Crazy Eddie primary fraud strategy changed. A) What was the primary fraud strategy for each period you have identified. B) List whether the company was public (traded on a stock exchange) or private during each of the three periods you have identified. C) Describe the strategy employed when the “skim” was…
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