The article focuses on the operations of corporate firms in the United States. According to the article, the corporate executives are expected to conduct themselves in a prescribed manner. Previously, the executive of various foreign firms was allowed to conduct themselves in an environment with more freedom. Due to the above mentioned freedom, the foreign firms were able to make a myriad profit as compared to the domestic firms. Reportedly, the corporate executive could easily engage in fraud or corporate misconduct, this enabled the firms to make a higher profit, since they could engage in fraudulent activities to earn illegal profit. Come July, 2013 the congress together with the senate pass a tougher enforcement on the foreign firms. Seemingly, President Bush later, July 30, 2002, appends his signature on the bill making it a law. The mentioned law was to regulate the behavior of the executive members of the foreign firms (Knoeber and Walker 24). A point to note is the fact that the absence or the devoid of laws guiding the foreign firms enabled the executive members to engage in several corporate misconducts. In July 24, 2002, John Rigas and his two sons were accused of engaging in corporate misconduct. Worse to note is the fact that John Rigas was sentenced to jail for a period of 15 years while his two sons were jailed for a period of 20 years. Adelphia Perp Walk was brought into place to regulate the behavior of executive members of foreign firms. On the other hand, the domestic firms were not affected by the new law. The mentioned law established heavy penalties on the foreign firms, making the said firms to conduct themselves in line with the new law. Following this, the net returns of the foreign firms were noted to decline drastically as compared to the net returns of the domestic firms. The article seeks to explain the effects of tougher enforcement on the foreign firms.
As a matter of fact, each and every country must come up or set laws that govern the foreign firms. A point to note is the fact that the mentioned foreign firms have a high likelihood of engaging in fraudulent activities as a way of escalating their net returns. For instance, the United States of America before the passage of the law that governs the corporate executive of foreign firms, such firms easily engage in corporate misconduct. John Rigas and his two sons Michael and Timothy were arraigned in court and arrested for 15 and 20 years respectively. World Com announced the fraud of Rigas and his two sons; this was followed by the federal authorities to arrest the mentioned culprits for committing a corporate crime. Surprisingly, not only Rigas and his two sons committed the crime but several foreign firms were also involved in a similar crime (Knoeber and Walker 33). The major point to come up with Adelphia Perp Walk was to discourage the executives of the foreign firms not to involve themselves in the illegal or fraudulent activities. Following the passage of this law, the foreign firms were exposed to heavy penalties if they attempt to engage in corporate crime. Interesting to note is the fact is the fact the discipline in the foreign firms was observed.
The article continued to emphasis on the punishment or penalties that foreign firms could bear if they engage in the corporate crime. Through this, many executive members of firms who engage in corporate crime were brought to books and sentenced to jail for several years. On the other hand, the financial loss on the net income of the foreign firms was observed, since the mentioned firms were expected to trade carefully (Knoeber and Walker 67). The worst point to note is the fact that the established law on the foreign firms leads to less foreign investment. Due to the reduced profit, many foreign firms shy away from investing due to the fear of the new law. Prevalently, the article emphasis on the foreign firms should view the new law positively and embrace it in its totality. Conversely, the executive members of the domestic firms were not affected by the law.
Work Cited
Knoeber, Charles R and Walker, Mar D. The Effect of tougher enforcement on foreign firms.USA: Elservier, 2013. Print
