Please complete Critical Thinking Assignment #9 by responding to and uploading your paper on the Fraud Casebook on page 319 on Bristol-Myers
FRAUD CASEBOOK
Bristol-Myers Squibb
Read the following articles or other related articles regarding the Bristol-Myers case and then answer the questions below:
Sources:
Security and Exchange Commission, “$750 Million Distribution Begins for Bristol-Myers Fraud Victims,” June 8, 2006.
Gold, Jeffrey, “Bristol Myers Reaches $300 Million Settlement,” Yahoo! Finance, June 16, 2005.
Starkman, Dean, “Civil charges Follow Indictments in Bristol-Myers Case,” The Washington Post, August 23, 2005.
Masters, Brooke A., “Bristol-Myers Ousts Its Chief at Monitor’s Urging, The Washington Post, September 13, 2006.
Short Answer Questions
1. By what percentage could Bristol Myers earnings have declined in 2002 as a result of the fraud?
2. What was the first period that the SEC believed that Bristol Myers “stuffed the channels?”
3. Was channel stuffing the only scheme perpetrated by Bristol Myers? If the answer is “no,” name one other scheme.
4. What were the names of the marketing efforts that helped drive the need to channel stuff?
5. How much was the fine in the deferred prosecution agreement?
6. What was the total amount of fines and penalties levied against Bristol Myers?
Discussion Questions
1. What makes channel stuffing illegal by comparison to a car dealership that runs “mega” end-of-year sales?
2. Why are revenue recognition frauds such a frequent problem for the SEC?
3. What red flag symptoms might revenue recognition create and how might one best discover a revenue recognition fraud?
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