LAW 101 Lecture Notes - Lecture 10: Bear Stearns, Social Forces
Document Summary
2009 after gov"t officials discovered that its plant was the source of products that used peanut corporation"s product as their base. Company"s name & image got so damaged that it could not cont. to. Business ethics and business regulation: public policy, law, and ethics. When business behavior results in complaints from employees, investors, or customers, laws or regulations are often used to change the behavior: ex: the bankruptcy of the lehman brothers, the near-collapse of bear. Stearns, & the losses at merrill lynch & aig in 2008-2009 all resulted from the subprime mortgage financial derivative investment market - a market that had previously been a relatively regulation-free environment. The companies had billions of dollars of exposure b/c of their sales & purchases of financial instruments that were tied to the subprime mortgage market that ultimately resulted in high rates of foreclosure.