The Ladder of Lies

In today’s world of commerce, the competition for success has become inevitable and ever so fast. There are more than eight thousand start-ups aiming for the top position in India itself. But many of these, as a shortcut or perhaps in an attempt to achieve faster growth and recognition, resort to some ways that lands them up in legal trouble, firing back like a boomerang aimed at themselves.

One such organization was Iconix, an apparel licensing company; these companies make agreements for a fixed period of time to produce and distribute merchandise. Neil Cole, the company’s former CEO was brought to court over a series of fraudulent transactions. From the last quarter of 2013 to the end of the year 2014, Cole and the ex-CEO, Seth Horowitz committed fraudulent transactions showing inflation in their shares via exchanging money with an undisclosed partner from Asia. Even though the SEC investigation proved them guilty, the company has neither denied nor accepted the authenticity of these transactions in their statement. This shows that not only do companies try to protect their reputation but somewhere have knowledge of such activities taking place within.

This was just one of many cases that have been happening around the world recently and the case of money laundering to show increase in the values of shares is a classic repertoire among these race horses. Some of these are performed by the organization for achieving a pedestal while others, like in this case, are done for personal gain. The economy is surely driven by money, but to these business moguls, money has driven their life. By finding loopholes in the legal sentences, they make an escape from something that a rookie, or a new entrepreneur could have suffered through for making a mistake of this magnitude.

This happens, in my opinion, because of loosely bound laws around business and trade. There are strict prosecutions over money laundering but the law fails at accounting and management of people. Even though there is a hierarchy followed in commercial organizations and distributed between various individuals to avoid selfish power-play, those labelled the top brass still have a mammoth amount of authority in their hands. Once they realise that they can have larger benefits if they combine their forces, they leave all purity of dedication and sincerity to chase the pot of gold; when the surface of a pond collects algae, it becomes difficult to save the water from being depleted-if the higher ranking officials start conspiring, like Cole and Horowitz did by joining forces and presenting false accounts to auditors, it can hardly let the lower levels of the company work efficiently.

If we were to change the scope of the top brass and distribute responsibilities in an interdependent manner along with increasing the frequency of audits and balance-verification, this can perhaps be avoided.