Madoff - 1370 Words

http://www.sec.gov/answers/ponzi.htm Who is Bernie Madoff? Bernard L. Madoff, who is currently serving a 150-year sentence in federal prison, orchestrated a multi-billion dollar Ponzi scheme that swindled money from thousands of investors. Unlike the promoters of many Ponzi schemes, Madoff did not promise spectacular short-term investment returns. Instead, his investors’ phony account statements showed moderate, but consistently positive returns — even during turbulent market conditions. In December 2008, the SEC charged Bernard Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for the multi-billion dollar Ponzi scheme he perpetrated on advisory clients of his firm for many years. The†¦show more content†¦Issues in management practices, like conflict of interest, can be raised from this debacle. Madoff developed a culture of individualism and arrogance that silenced any insurgence. His communication and manipulation skills helped him generate income for himself, while keeping any suspicion of fraud away. Formal control mechanisms and transformational leadership skills may have avoided such an unethical attitude. Madoff’s scam has been impacting several charities, private investors as well as the health of the financial markets. Madoff’s low moral development stage and his well oiled reputation management skills were reasons for his long lasting success. Bernie Madoff When it comes to committing crimes, the disparity between the wealthy and the poor in the United States has never been more evident than now. Most white collar criminals get to stay out of prison on bail while other accused people are often sent right to jail to await trial. Bernie Madoff, former chairman of the NASDAQ stock exchange, accused of stealing over $50 billion from investors, should have been awaiting trial in prison rather than at home in his $7 million Manhattan apartment on the Upper East Side. The devastation of his crime has forever affected the lives of thousands. There are three reasons why Bernie Madoff should have been in jail from day one.Show MoreRelatedMadoff4022 Words   |  17 Pageswithdrawals. Though these types of schemes have happened before, the first of this caliber was documented in the 1920’s by its namesake, Charles Ponzi. In 2008, Bernard â€Å"Bernie† Madoff was exposed for running the largest Ponzi scheme to date, conning in vestors out of over $65 billion over thirty years. INTRODUCTION Bernard Madoff was responsible for the largest reported Ponzi scheme in history. How did this happen? Who else knew about it? Why did it take so long for him to be exposed? This paper willRead MoreMadoff2303 Words   |  10 PagesBernie Madoff amp; the Worst Pyramid Scheme in U.S. History It is said that we are the product of our upbringing, so it probably would not surprise you to learn that the biggest and worst financial fraud committed through a pyramid scheme in US History, was achieved by a man who was raised by parents that also commit financial frauds. Bernie Madoff was raised watching his parents Ralph and Sylvia Madoff run a business that was not successful in the financial trading world. That company wasRead MoreMadoff1255 Words   |  6 Pagesreview of the Madoff Securities case. The Madoff Securities case involved the cunning Bernard L. Madoff swindling his clients to believe that he could guarantee them high profits. Madoff is the largest Ponzi scheme in history. Madoff Securities Case Bernard L. Madoff started the investment firm Bernard L. Madoff Investment Securities (BLMIS). Bernard Madoff began trading securities from the 1960s. From as early as 1962, it is believed Madoff started hidingRead MoreBernie Madoff644 Words   |  3 PagesDiyonka Massey Magan Calhoun AIS 3710 22 February 2013 Bernie Madoff Case Study Throughout history, people have done unethical things dealing with money. In 2008, the man known for running a massive Ponzi scheme, known as Bernie Madoff, was arrested and charged with criminal securities fraud, and sentenced for a hundred and fifty years in prison. Bernie Madoff continued his scheme for thirty years because his company was the largest market maker on NASDAQ. He had an impressive rate of returnsRead MoreBernie Madoff1600 Words   |  7 Pagesâ€Å"If It Quacks Like a Duck† Assignment 2 – Bernard Lawrence â€Å"Bernie† Madoff Business Law I March 4, 2011 Bernard Madoff Abstract Unethical behavior†¦sounds bad doesn’t it? But what employee can truly say that he is completely innocent of any unethical behavior in the workplace? Some of the most common unethical business behaviors are fudging work hours, making phone calls on business lines and photo copying of personal paperwork. Simple acts such as these are highly unlikely to have anRead MoreBernie Madoff1967 Words   |  8 PagesBernie Madoff Andrea L. Nolt Strayer University Intro to Business Professor Karina Arzumanova August 21, 2011 Bernie Madoff Bernard Lawrence â€Å"Bernie Madoff† is an American former stock broker, investment adviser, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in history. (Bernard Madoff, 2011) This paper discusses the massive Ponzi scheme that Mr. Madoff created and those that were affected by it. Read MoreBernie Madoff2651 Words   |  11 PagesBernie Madoff Research Project Abronia S. Young D03202587 On March 12, 2009, Madoff pleaded guilty to 11 federal offenses, including securities fraud, wire fraud , mail fraud , money laundering, making false statements, perjury, theft from an employee benefit plan, and making false filings with the SEC. The Fraud In March 2009, Madoff admitted that since the mid-1990s he stopped trading and his returns had been fabricated. Madoffs sales pitch, an investment strategy consistedRead MoreMadoff Scandal1822 Words   |  8 PagesThe Madoff Scandal: 50 billion questions and few answers Table of Contents Abstract †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦3 Description of Events †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..4 Analysis of Scenario †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦4 Questions about Madoff †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..5 Solutions and Alternatives †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..7 Conclusion †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦...8 References †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦10 Abstract Bernie Madoff ran the biggest in the history of the world. The detailsRead MoreBernard Madoff1446 Words   |  6 PagesRunning head: BERNARD LA WRENCE BERNIE MADOFF 1 BERNARD LA WERENCE BERNIE MADOFF Naamah Pagan Augustine Weekley Business Law 1 August 21,2011 BERNARD LA WRENCE BERNIE MADOFF 2 Introduction Bernard Lawrence Bernie Madoff ran one of the largest Ponzi Schemes. A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century. The scheme is designed to convinceRead MoreBernard Madoff2362 Words   |  10 PagesMVE220   Financial   Risk       The   Madoff   Fraud       Shahin   Zarrabi   Ã¢â‚¬â€œ   9111194354    Lennart   Lundberg   Ã¢â‚¬â€œ   9106102115                      Abstract:    A   short   explanation   of   the   Ponzi   scheme   carried   out   by    Bernard   Madoff,   the   explanation   to   how   it   could   go   on   for    such   a   long   period   of   time   and   an   investigation   on   how   it    could   be   prevented

Health Promotion Essay - 1688 Words

DEMENTIA The purpose of this essay is to look at dementia in details and get a clear understanding of the level at which this condition affects the society and how it raises public health concern. According to the NHS Choices (2010), Dementia is said to be a condition that carries a group of related symptoms, associated with an ongoing decline in the performance of the brain and its abilities. This condition affects the individual’s memory, thinking, language, and understanding together with judgment abilities. Therefore this essay will be analysing concerns, targets and health promotion initiatives by the government regarding dementia. Dementia is a condition that raises public health concerns and the government is working hard to†¦show more content†¦The government is also focusing on raising the quality of care for people with dementia and giving as much support as they can to the carers according to the Department of Health (2011). By doing this, the pace of improvement in dementia care will be accelerated. The Department of health also published an implementation plan which they called Good Practice Compendium - Living well with dementia (2011). With this initiative the government aims at providing centres that will act as a hub of services to older people with chronic ill health and long term illness such as dementia that require intensive care. It is also the government’s plan to support carers by offering respite care, information and advice in local settings. The government believes that under these arrangements, they will be able to help older people mostly those with dementia to regain the ir lost skills and abilities, which will enable them to maximise their potential and be able to live in their own homes. This is done as a way of promoting dignity and independency. They also want to promote and sustain inclusion and wellbeing. As part of the government’s living with dementia program, the NHS West Kent Dementia Crisis Support services provide a 24 hours care service. This aims at providing a safe environment for individuals while carers are resting and also enables individuals to remain in their own homes and receive appropriate support. This is a useful way of treating people who get acuteShow MoreRelatedEssay on Health Promotion Teaching Plan1307 Words   |  6 Pagesï » ¿ Health Promotion Teaching Plan Anita Moore Jacksonville University School of Nursing June 17, 2012 Health Promotion Teaching Plan My emphasis in this assignment is to develop, implement, and assess a teaching plan concentrated on good nutrition and daily exercise for school age children. The early years are a critical time for founding good eating habits and attitude about food and exercise. Children who areRead MoreRole of the Nurse in Health Promotion Essay2161 Words   |  9 PagesIntroduction Health promotion includes providing activities that improve a person’s health. These activities assist patients to â€Å"maintain or enhance their present levels of health. Health promotion activities motivate people to act positively to reach more stable levels of health† (Potter Perry, 2005, p. 97). In order for nurses to assist patients in obtaining healthy lifestyles, they must first assess a patient’s perception of health. The World Health Organization defines health as a â€Å"state ofRead Morehealth promotion: concept analysis Essay examples4054 Words   |  17 Pagesï » ¿The Concept Analysis of Health Promotion Abstract Health promotion (HP) is a multi-dimensional and complex concept which the researcher is frequently used and defined in different ways. One of the nursing roles for nurses is the promoter of health; therefore it would be useful to attempt to clarify the concept. This article develops a concept analysis is to clarify the meaning of an existing concept of HP using the process developed by Pender, Murdaugh, and Parsons (2006). The method suggestedRead MoreEssay on Health Promotion1606 Words   |  7 Pagesbased study, is to Promote Health and behaviour changes within the work place, in order to sustain a healthier life style. This essay seeks to illustrate the impact of smoking on a patient that has CHD, (Coronary Heart Disease) and explore the psychological approach to altering the patients perceptions of health promotion, and interventions that are used to facilitate a better quality of health. The author will also examine public health legislation on current health and social care provisionsRead MoreHealth Promotion Essay2612 Words   |  11 PagesThis assignment is about how to plan and conduct a health promotion advice on an individual patient to improve patient’s quality of healthy life. In this essay, the author will first of all outline how the government policies, which are the National Service Framework (NSF) for Long-term Conditions and the NSF for Diabetes, were developed. The author will outline briefly all benefits are for her particular patient – Mr Smith (pseudonym name) in compliance with the NMC (2008) on confidentiality, isRead MoreHealth Promotion Essay4090 Words   |  17 Pagesof the population of many countries is enteri ng older age as a result of medical and technological advances as well as improved standards of living (Goklany, 2007, World Health Organization, 2011). This establishes a significant challenge to the population as individuals, communities and governing bodies regarding health promotion, disease prevention and quality of life. Wilhelmson, Andersson, Waern and Allebeck (2005) describe quality of life as a dynamic concept and conclude that psychosocial influencesRead MoreEssay on Health Promotion1354 Words   |  6 PagesHealth promotion and teaching are important tools for nursing. By promoting health and health teaching, nurses can help lay the foundation for a healthier future. Major Concepts and Definitions BeliefÂâ€"a statement of sense, declared or implied, that is intellectually and/or emotionally accepted as true by a person or group. AttitudeÂâ€"a relatively constant feeling, predisposition, or a set of beliefs that is directed toward an object, a person, or a situation. ValueÂâ€"a preferenceRead MoreEssay on Health Promotion1670 Words   |  7 Pages â€Å"Health is defined as a state of physical, mental and social well being and not merely the absence of disease or infirmity† (WHO). Like wise health promotion is the process of increasing the functional capacity of all people hence promote the sense of well-being. In order to accomplish this goal all health care professionals have to work hard by submitting themselves to their patients and community as a whole. Thus globalize health promotion should be the ultimate mission for all health care teamRead MoreHealth Promotion Interventions Essay1300 Words   |  6 PagesUnderstanding Health Promotion Interventions in Nursing Practice Nancy S. Hammack Grand Canyon University: Family Centered Health Promotion NRS 429V Professor Barb McGraw March 24, 2013 Understanding Health Promotion Interventions in Nursing Practice The nursing profession is one of the largest health care professions, providing important opportunities for health promotion with potential to reform health at the legislative level. Health promotion is defined by Kreuter and DevoreRead MoreHealth Promotion Plan Essay2528 Words   |  11 Pagespractice, we also have a duty to our patients to be proactive in preventing specific health-related consequences based on their risk factors and to promote their health and well being. Health promotion as it relates to nursing is about us empowering our patients to increase their control over their lives and well beings and includes: focusing on their health not just illness, empowering our patients, recognizing that health involves many dimensions and is also effected by factors outside of their control

Emaar Property Company Dubai Conflict Management

Question: Discuss about theEmaar Property Company Dubai Conflict Management. Answer: Introduction Conflict is a situation where individual disagree in team due to different ideas or interests. Conflict in an organization lead to either negative or positive effects in an organization that disrupts the smoothing running of the organization. Negative aspects reduce the effectiveness in an organization while positive aspects can be used to improve effectiveness (Rahim, 2011). Conflict is inevitable in an organization and it depends on how the situation is managed in respect to the organizations goal. Proper conflict management enables the organization to effectively and efficiently meet its goals. Emaar Properties is a leading real estate company with a great determination to lead by not compromising quality, Value, service and style. Therefore, it crucial for effective conflict management in the organization to enable the company pursues it mission. Impact of Conflict Conflict has impact on the interaction within the team itself and the interaction between one group and another. Intergroup conflict The impact of Inter-group conflict in Emaar properties are as follows; Stress and burnout: Intergroup conflict cause stress between managers in the organizational and burnout that have psychological health effects. Managers will be observed to be stressed that can lead to depression. Decreased job satisfaction: Intergroup conflicts reduce job satisfaction among managers in the company and this reduces the morale to work. Reduction in organizational performance: Intergroup conflict causes divisions in the teamwork of the company with members lacking motivation for exceptional performance (Dana, 2001). This reduces the organizational performance as a result of reduced individual performance. Time wastage: Intergroup conflicts increase time wastage in the company as members think and pursue their interest rather than the companys mission. This is caused by the feelings that they are not respected and have to be forced to perform their duties Increased distortion of perception: This lead to negative stereotype and mistrust between members in different levels in the company. Intra-group Conflict These are impacts caused by conflicts inside the one group. Late completion of task: Intra-group conflict lead to individuals lacking coordination to finish task on time. This reduce the companys efficiency since resources are underutilized Team work breakdown: Intra-group conflict causes team work breakdown making it hard for the company to have cohesion in handling tasks. Talent wastage: Intra-group conflict causes divisions among members and reduces morale for participation and exceptional performance. This leads to wastage of talented members in the group since they dont fully participate. Evaluation of Conflict Management Styles There are five styles of conflict managements. They include; Avoiding, Collaborating, Accommodating, competing and compromising (Dana, 2001). These styles are discussed below as follows; Competing: This style involves solving a conflict by seeking to achieve goals without upholding relationships between members of the team. This is a win lose style of conflict management. Compromising: This style involves giving up the goal of the group and not maintaining relationship. Compromising is a bend-bend situation where neither the goals of the team nor the relationship of conflicting parties is maintained. It lose-lose style of conflict management. Avoiding: This style involves avoiding the conflict by neither pursuing the goals nor the relationships. This approach avoids the conflict rather than solve it. Collaborating: This style involves solving the conflict and maintaining the relationships in the team. It involves upholding the goals of the group and improving the relationships of the team. It a win-win approach of managing conflict Accommodating: This style of managing conflicts emphasis on maintaining team relationships and improving them without considering the goals of the team. It a lose win approach of managing conflict. Conclusion From the evaluations of the style of managing conflicts, I will choose collaborating approach for Emaar properties. Collaboration style will enable me manage conflict by both meeting the goal of enhancing cohesiveness in the teams as well as improving the relationships between managers. This will increase organizational performance and job satisfaction in the Emaar Properties. References Dana, D. (2001). Conflict resolution: Mediation tools for everyday worklife. New York: McGraw-Hill. Grant, C.H. Kirton,M., (2007).Governance, conflict analysis and conflict resolution. Kingston; Miami : Ian Randle Publishers, Haynes, K. (2015). Diversionary conflict: Demonizing enemies or demonstrating competence?. Conflict Management And Peace Science. https://dx.doi.org/10.1177/0738894215593723 Huang, J. (2010). Unbundling task conflict and relationship conflict. International Journal Of Conflict Management, 21(3), 334-355. https://dx.doi.org/10.1108/10444061011063207 Rahim, M. A, (2011). Theory and research in conflict management. New York: Praeger. Raines,S.,(2013). Conflict management, interpersonal and personnel management: Jossey-Bass business management series. San Francisco:Jossey

To what extent is the rule contained in the Salomon v Salomon Co Ltd Essay Example

To what extent is the rule contained in the Salomon v Salomon Co Ltd Paper The company as a separate legal personality from that of its members as defined by the Companies Act 1862 was established in common law by the House of Lords in 1879 when they delivered their judgement in the case of Salomon v. Salomon Co. Ltd. Indeed, this case is now seminal, with both practitioners and students of the law referring to it as the foundation upon which modern company law is based. However, although the outcome of Salomon v Salomon Co. Ltd is now firmly embedded that is not to say it has not been prone to the effects of the occasional tremor. Since this ruling and some might argue prior to this ruling by the House of Lords questions relating to the interpretation of the act and its scope have been hotly debated. While some see this ruling as clearly interpreting the 1862 act at common law others contend that such an interpretation is too rigid and clearly open to abuse. It would be argued that a separate legal personality in conjunction with limited liability offered the nineteenth century entrepreneur the protection they desperately needed if their business ventures were to grow and expand beyond their personal resources. Others would contend that this ruling was to the detriment of the companys creditors, allowing the unscrupulous individual or individuals to set up a limited company at little expense and little or no risk to themselves. Indeed, some detractors of the outcome of the Salomon v. Salomon Co Ltd ruling have referred to such companies as a sham, a screen and a mere fraud. These, and a plethora of similar terms illustrates perfectly, as Murray A. Pickering states, the degree of uncertainty on the part of the courts on some occasions when dealing with the separate existence of the company (1). We will write a custom essay sample on To what extent is the rule contained in the Salomon v Salomon Co Ltd specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on To what extent is the rule contained in the Salomon v Salomon Co Ltd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on To what extent is the rule contained in the Salomon v Salomon Co Ltd specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The uncertainty created by the House of Lords ruling between helping the entrepreneur and protecting the creditors of the business has seen that the principles of the company as a separate legal entity with limited liability not go unchallenged. Since 1879 companies have become more complex in their design and their operation and with out any radical changes in statute to incorporate these, it has been left largely to the courts to respond to these developments. The question of abuse by one or more individuals of the privileged status of the incorporated company has frequently come before the courts since the House of Lords ruling. For instance the potential of a party or parties to operate behind a limited company and perpetrate a fraud upon the companys creditors has been recognised and in recent decades the rise, and in some instances the dominance, of the group of companies (conglomerates and multinationals) has seen the courts set down a number of exceptions to the general principle of incorporation with its inherent benefits as laid down by the Companies Act 1862 as interpreted by the Salomon case. While Salomon v. Salomon Co. Ltd might form the foundations of modern company law, over the years those foundations have been made more pliable with the courts recognising a number of instances whereby the veil of incorporation can be lifted so as to allow the courts to determine the true nature of the organisation. Before one considers the potential for abuse of the rule as contained with in the Salomon v. Salomon Co. Ltd case it would be prudent to begin by examining why the law in relation to the company needed to be changed. The background surrounding the eventual House of Lords judgement will then be reviewed before consideration is given to the actual judgement itself. From this vantage point it will then be possible to consider in some detail the potential for abuse together with practical illustrations of how the courts and statute have sought reduce the potential for abuse. Prior to the 1840s there were two routes available to someone seeking to create a company. The first required the company to be incorporated by Royal Charter which in effect gave the company monopolistic power with in its sphere of influence (as defined by the charter). Indeed, during the seventeenth and eighteenth centuries this was the vehicle that allowed the British Empire to prosper. The other route was for a company to be incorporated by Parliament. However, this route was both time-consuming and expensive and could only be justified in the case of very large undertakings such as the development of the railway. By the middle of the eighteenth century Britain was facing growing competition from its traditional European rivals (in particular France and Germany) and from the rapidly developing and industrialised United States of America. Indeed while the vast majority of Britains economic wealth rested in the hands of family run enterprises America was witnessing the creation of the conglomerate in the hands of such people as Andrew Carnegie (1835 1919) and J. P. Morgan (1837 1913). While Britain had the skills and abilities to compete, the inability for an individual or a group of individuals to raise capital to create comparable enterprises was strangling economic development. It was common practice to insert provisions within the charter of a trading corporation which allowed leviations on its members to pay the corporations debts, a factor which stifled entrepreneurial risk taking. Boyle and Bird in their book Company Law credit the legislation of the 1840s and the 1850s as being responsible for the creation of the registered company that we can recognise today and while those commentating on the Salomon v. Salomon Co. Ltd case make reference in particular to the 1862 Companies Act one could argue, persuasively, that it was the Joint Stock Companies Acts of 1856, the that provides the bedrock upon which the modern company was formed. This act consolidated and reformed previous legislation. It introduced the memorandum and articles of association while abolishing deeds of settlement and of equal importance it removed previous safeguards for limited liability. These changes in the law were in response to a particular economic reality, the need to finance growth. In conjunction with the skills of the entrepreneur and technological developments these changes helped to stimulate the economy by making it possible to raise capital for a business venture without facing the consequences of unlimited liability should the venture fail. Some thirty years later Mr Salomon, a manufacturer of boots and shoes and trading under the name A Salomon Co. sought to turn his business into a limited company. He adhered to all that was required of him under the Companies Act 1862. However, the judge suggested that the company had a right of indemnity against Mr Salomon, declaring the shareholders of the company were nominees of Mr Salomon. The counter-claim was amended accordingly. Vaughan Williams J. declared that the plaintiffs of A. Salomon Co, Limited or the liquidator were entitled to be indemnified by the defendant A. Salomon. It is interesting to note that his Lordship was attempting to lift the corporate veil, something that a number of courts have done against the backdrop of the House of Lords ruling on Salomon v. Salomon Co. Ltd in 1879. He stated that this business was Mr Salomons business and no one elses; that he chose to employ as agent a limited company; that he is bound to indemnify that agent, the company; and that his agent, the company, has a lien on the assets which overrides his claim(2) He went on to say In this case it is clear that the relationship of principal and agent existed between Mr Salomon and the company. 3) His Lordship had recognised and attempted to address what was to become one of the major exceptions (the company as an agent of an individual) to the Salomon v. Salomon Co. Ltd ruling, one which would allow future courts to legitimately lift the corporate veil. Mr Salomon appealed; but the appeal was dismissed thought the grounds for dismissal differed from those expressed by the lower court. Lindley L. J. ntimated that Mr Salomon had acted fraudulently when he said It is manifest that the other members of the company have practically no interest in it, and their names have merely been used by Mr Aron Salomon to enable him to form a company, and to use its name in order to screen himself from liability(4) His suggestion that a fraud had been perpetrated by A. Salomon was clarified when he said There are many small companies which will be quite unaffected by this decision. But there may possibly be some which, like this, are mere devices to enable a man to carry on trade with limited liability, to incur debts in the name of a registered company, and to sweep off the companys assets by means of debentures which he has caused to be issued to himself in order to defeat the claims of those who have been incautious enough to trade with the company without perceiving the trap which he has laid for them(5) While the case went to the House of Lords it is interesting to note that once again the court sought to lift the veil of incorporation in its attempt to discover a fraud which after 1879 would be considered another legitimate reason for lifting the corporate veil. The House of Lords ruling on Salomon v. Salomon Co. Ltd set the standard against which future cases would be judged. Lord Halsbury L. C. made it clear that it was not the courts role to interpret the Companies Act 1862, The sole guide must be the statute itself(6) He later went on to describe Vaughan Williams J. argument as a singular contradiction, Either the limited company was a legal entity or it was not. If it was, the business belonged to it and not to Mr Salomon. If it was not, there was no person and no thing to be an agent at all; and it is impossible to say at the same time that there is a company and there is not(7) Lord MacNaghten in addressing Vaughan Williams J. ssertion that the signatories to the memorandum of association were mere nominees of Mr Salomon said the Act requires that a memorandum of association should be signed by seven persons, who are each to take one share at least. If those conditions are complied with, what can it matter whether the signatories are relations or strangers(8) Addressing the issue of limited liability and Vaughan Williams J. comments he said If the view of the learned judge were sound, it would follow that no common law partnership could register as a company limited by shares without remaining subject to unlimited liability(9) He dismissed the Court of Appeals suggestion that Mr Salomon had acted fraudulently and went on to say It has beco me the fashion to call companies of this class one man companies. That is a taking nickname, but it does not help much in the way of argument. If it is intended to convey the meaning that a company which is under the absolute control of one person is not a company legally incorporated, although the requirements of the Act of 1862 may have been complied with, it is inaccurate and misleading(10) It was held that the appeal be allowed, and the counter-claim of the company dismissed with costs (both in this hearing and below). Both Vaughan Williams J and the court of Appeal saw it as the duty of the court to look behind the incorporation of the company. Each, for different reasons, felt that Mr Salomon was manipulating the machinery of the Companies Act, 1862 for a purpose for which it was never intended. 11) However, the House of Lords judgment firmly pulled down the veil of incorporation around the company and its members. It is telling, when Lord MacNaghten referring to Vaughan Williams J. comments on the case stated Leave out the words contrary to the true intent and meaning of the Companies Act, 1862(12) It is clear that Lord MacNaghten and his colleagues held that their role was merely to apply and not to interpret the Companies Act, 1862 and that any such interpretation by the courts was out with their jurisdiction. Nevertheless, later courts have found it necessary to lift the veil of incorporation and over the years there has been a number of exceptions to the principle laid down by the Salomon case that the corporation is a separate legal entity. Gonzalo Villalta Puig contends that the verdict reached by the House of Lords in the case of Salomon v. Salomon Co. Ltd created a double-edged sword. While the verdict helped to drive capitalism by established the company as a separate legal entity with limited liability and allowed it (the company) to enter into contracts in its own name it also helped promoted the evasion of legal obligations by allowing these benefits to be harnessed by small private enterprises. Goulding agrees with Puig but goes further by suggesting that individuals are encouraged to seek limited liability by becoming a limited company even when such a step is not necessary in their particular circumstances. These, and other criticisms have their basis in fact. In the years since the Salomon v. Salomon Co. Ltd ruling in 1879 there have been a number of instances where the strict interpretation of the law has been questioned in the courts and the courts have seen fit to look behind the corporate veil. Farrar, in his book Company Law outlines several categories under which the courts have sought to pierce the corporate veil, though he is quick to point out the courts have not done this in a systematic way. Rather than defining what is meant by the term incorporation and what it does and does not encapsulate the courts have examined this area on a case-by-case basis. As such, they have maintained the integrity of the Salomon ruling while providing a degree of flexibility but only on a case-by-case basis. It is therefore up to the individual/s who feel they might have a justifiable grievance to take that grievance to the courts and there present a persuasive argument for the corporate veil to be lifted in order that their grievance can be remedied. This in itself can prove very costly and time consuming. Believing one has a justifiable grievance might not be enough for a party to pursue their claim in court as the costs and time constraints might prove prohibitive. While this is not highlighted, by Farrar, it can nevertheless be considered a potential form of abuse.