Bankrupt companies more likely to be charged?

Financial Week notes that some of the largest companies ever to file for bankruptcy, Enron and WorldCom, were subsequently charged with massive fraud. Such cases, of course, led to the law that has become so dear to so many of us (I'm kidding). As it turns out, companies that file for bankruptcy tend to be charged with fraud at a greater rate than companies that don't file. A Deloitte study has found that of the 519 bankrupt companies with more than $100 million in revenue, 9.2 percent were charged with fraud. Of the 2,919 companies that stayed out of bankruptcy court, only 3.1 percent were charged. So the lesson? Companies in trouble need to be especially careful not to put employees or managers under undue financial pressure, lest they resort to illegal methods out of desperation.

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- here's the article

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