Monthly Archives: September 2013

JPMorgan Paid $920m for Financial Fraud

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JPMorgan, the largest investment bank in US by assets, has agreed to pay $920 million in fines to US and British regulators to settle London Whale Probes. Bruno Iksil, a top manager of JPMorgan, withheld information about the extent of growing losses from the board leading to  $6.2bn of derivatives trading losses last year. This can be defined as a financial statement fraud which was resulted from failing in JPMorgan’s internal controls and in senior management. Nevertheless, right after the fraud being exposed, JPMorgan revised its valuation policies and came up with a new protocol for reporting disputes to top executives .

Jamie Dimon,CEO of JPMorgan

Apparently, the reason why Iksil urged his colleagues to deceive committees in board is external pressures such as meeting investors’ expectation or attracting further investment. It’s naive for such a sophisticated manager to suggest that their long-term fraudulent actions would not be caught. However, JPMorgan didn‘t refuse to acknowledge their mistakes as their first movement to put behind the issue for the benefit of the whole corporation. As one of the largest and most profitable bank in US, JPMorgan would be able to absorb its financial losses and rebuild the enterprise image.

 

 

 

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Blackberry Slash 4,500 jobs to Stem Loss in Sale

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Blackberry

Blackberry

Blackberry reported a loss of ＄965 million in its second quarter resulted from the poor sale of its smartphone, while apple has sold a record-breaking nine million new iPhone 5s and iPhone 5c models, just three days after the launch of the new iPhones.  As a result, Blackberry cuts 40% of its workers to release the financial burden. According to BBC News, the corporation reported sales of 1.6bn compared with $3.1bn in the same quarter of 2012, a near 50% fall.

BBRY falling shares in recent months

Under current emergent situations, Blackberry’s business plan is ready to undergo great changes, for instance, it tries to build up corporate customer base instead of focusing on individual consumers. Alternatively, Blackberry is supposed to take advantage of its point of difference, IT security technique, to survive in the market. Since the Blackberry Corporations as a whole doesn’t seem to be valuable, selling parts such as information security system might be its best option. According to BBC News, Earlier this week Blackberry agreed to be bought by a consortium led by Fairfax Financial for $4.7bn.

Video Related: BlackBerry gone sour, slashing 4,500 jobs

Reference:

“Blackberry Reports $965m Second Quarter Loss.” BBC News. BBC, 27 Sept. 2013. Web. 01 Oct. 2013. <http://www.bbc.co.uk/news/business-24302139>.

BlackBerry Gone Sour, Slashing 4,500 Jobs. CNBC. N.p., 23 Sept. 2013. Web. <http://finance.yahoo.com/video/blackberry-gone-sour-slashing-4-121700445.html>.

Blackberry. Digital image. BBC News. BBC, 27 Sept. 2013. Web. .

Business Ethics: KFC China in Poultry Scandal

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As the first quick-service restaurant chain to enter China, KFC has become the top one fast food brand in China with more than 4,400 restaurants across the country. Undoubtedly, the most popular Original Recipe Chicken and other chicken products are in large demand everyday. However, it is published that KFC chickens in China are being fed chemicals that are so toxic that it can kill the flies that buzz around it. The chemicals and additives in the feed can speed up chickens’ growth cycle to only 45 days. The matured chickens are then sold to KFC in pretty low price with a profit of 2 to 3 CNY per chicken.

A Chinese farmer working at a chicken farm in Hefei Province

A Chinese farmer working at a chicken farm in Hefei Province

No matter KFC China has realized or not the chicken they processed and sold has a serious safety problem, it should be responsible for the chicken scandal that shakes people’s confidence in the brand. In spite of the huge profit generated from the selling of fried chicken and chicken finger, KFC ought to guarantee people’s health instead of blindly supplying low-quality chicken to customers to maximize their own profits. The only good news is that after being hit by the scandal, KFC China starts to fulfill social responsibility by strictly selecting reliable food sources and its first step is dropping some of the illegal poultry suppliers.

Reference：

Chinese KFC Chicken Supplier in Feed Scandal. Digital image. The Epoch Times. N.p., 28 Nov. 2012. Web. 01 Oct. 2013. <http://www.theepochtimes.com/n2/china-news/chinese-kfc-chicken-supplier-in-feed-scandal-319725.html>.