Post #1: Business Ethics & the Bre-X Scandal
One of the greatest business scandals in the history of Canada, the Bre-X scandal is a perfect example of the need for ethical business practices. In 1993, a small Canadian company by the name of Bre-X bought the rights some land in Indonesia that they claimed tested as the largest gold deposit ever found. Naturally, stocks of Bre-X shot up as investors and even the Indonesian president rushed in to acquire a piece of the Bre-X. However troubles for the company started as results came that the gold tests were faked and the lead geologist of the company had committed “suicide”. The speculation that held Bre-X stock so high collapsed and the biggest losers from the scandal, pension funds and retirement plans, lost millions of dollars. The ethical issue of faking information, inflating stocks, and duping investors is problem found all too often in business. It is my belief that a few corrupt individuals wiping out the pensions of thousands of people overnight is despicable. While I do believe in a laissez-faire governmental approach to business, I believe the inherent propensity for fraud in industry based on incentives must be held in check by strict regulations and transparency.
– Tom