From the 32nd floor: Big business corruption continues; confidence remains low

Over the past 12 months, the stock market has plummeted, leaving many retirement funds, college savings, and portfolios empty. Investors all over the board are feeling the woes of "corporate irresponsibility." Let's look at a few of the players.

Player one: Enron. The company hid loans and overstated earnings. Days before the announcement that the company was going bankrupt, execs took millions of dollars in bonuses, which left thousands of employees jobless without severance pay. Bonuses for a job well done? This scandal prompted the SEC and congress to make stiffer consequences for corporate negligence. Last week, one of these execs pleaded guilty to criminal charges of fraud.

Perhaps the worst culprit in corporate corruption comes from WorldCom, the nation's 2nd largest long distance service provider. America frowned when financial statements were overstated by a total of almost $7 billion. Oh, and guess who wrote off on the paper work...Arthur Anderson, another sinking ship. WorldCom is America's largest bankruptcy with $107 billion in assets.

Even Martha Stewart could not stay out of the headlines. The pie baking diva got into trouble when her good friend, the CEO of ImClone, let her know a day early that the FDA did not approve ImClone's new cancer drug. So she sold the few shares of ImClone in her portfolio. Her company's stock has plummeted almost 70 percent since.

Of course there were a lot of other companies and individuals that came out of the woodwork when Enron, Arthur Anderson, and WorldCom fell. The day Johnson & Johnson announced it was being investigated for bookkeeping practices the Dow hit a 4-year low in what CNN called, "The Crash of 2002." The index fell almost 400 points.

Companies are finding there are consequences for corporate negligence. Arthur Anderson and Sotheby's have been busted. Merrill Lynch, Piper Jaffray and Xerox settled their cases. Enron, WorldCom, Qwest, Tyco, ImClone, Global Crossing, Dynegg, CMS Energy, El Paso Corporation and Halliburton Williams Cos. are all companies being investigated.

What does this all mean? It means some retired people have to go back to work. It means my dad is going to have to live with me someday, as if the last 18 plus years haven't been enough. It means banks are going to reap the benefits of scared investors because of CDs and other investments with lower rates of return.

I have to recognize the explicit opportunity this recession brings. I am an optimist, and I believe the markets, both NASDAQ and DJIA, will rebound. Consumer confidence has stayed high through much of the last 12 months. In this year's first quarter, the economy grew at a rapid pace, and the second quarter saw slowed growth. Currently in the third quarter, all signs point to more growth as we try to rebound.

In light of corporate corruption, Congresses passed laws making fraud a jailable and fineable practice. The SEC now mandates that CEOs and CFOs have to sign off on financial statements. These new mandates are to burden the CEO and CFO with the responsibility of their job. I'm sorry, I don't understand. Were they not responsible before?

In an initial showing of the new laws, five former executives of Adelphia were arrested in July for seven counts of fraud. They could get up to 95 years in prison and millions of dollars in fines.