Mid-Term Final

Which act was created as a result of the Enron Scandal?

• Sarbanes-Oxley Act

• Dodd-Frank Act

• Glass-Steagall Act

• Patriot Act

Answer explanation

The Sarbanes-Oxley Act was enacted in response to the Enron scandal to enhance corporate governance and financial disclosures, aiming to prevent accounting fraud and protect investors.

How much money did Bernie Madoff defraud from investors?

• $65 billion

• $100 million

• $1 billion

• $500 million

Answer explanation

Bernie Madoff defrauded investors of approximately $65 billion, making it one of the largest financial frauds in history. This amount reflects the total reported losses from his Ponzi scheme.

Who were the founders of Theranos involved in the scandal?

• Elizabeth Holmes and Ramesh 'Sunny' Balwani

• Bernie Madoff and Jeffrey Skilling

• Kenneth Lay and Andrew Fastow

• Martin Shkreli and John Kapoor

Answer explanation

The founders of Theranos involved in the scandal are Elizabeth Holmes and Ramesh 'Sunny' Balwani. They were central figures in the company's fraudulent claims about its blood-testing technology.

What was the impact of the Microsoft Antitrust Case?

• Microsoft was dissolved

• Microsoft was ordered to split into two companies

• Microsoft was fined $1 billion

• Microsoft was banned from selling Windows

Answer explanation

The Microsoft Antitrust Case led to a court ruling that Microsoft should be split into two separate companies to promote competition, making this the correct choice. Other options did not occur.

Who was the rogue trader responsible for the Barings Bank Collapse?

• Bernie Madoff

• Nick Leeson

• Jordan Belfort

• Richard Fuld

Answer explanation

Nick Leeson was the rogue trader whose unauthorized trading activities led to the collapse of Barings Bank in 1995, resulting in significant financial losses and the bank's eventual bankruptcy.

What was the main consequence for banks involved in the Libor Scandal?

• They were dissolved

• They were fined billions of dollars

• They were nationalized

• They were given tax breaks

Answer explanation

The main consequence for banks involved in the Libor Scandal was that they were fined billions of dollars. This was a result of their manipulation of the Libor rates, which affected global financial markets.

What was the crime type in the Microsoft Antitrust Case?

• Tax fraud

• Antitrust violations

• Environmental violations

• Insider trading

Answer explanation

The Microsoft Antitrust Case involved allegations of antitrust violations, specifically regarding monopolistic practices and unfair competition, making 'Antitrust violations' the correct answer.

What was the main issue in the Enron 401(k) Fraud?

• Mismanagement of retirement funds

• Insider trading

• Tax evasion

• Environmental violations

Answer explanation

The main issue in the Enron 401(k) Fraud was the mismanagement of retirement funds, where employees' savings were heavily invested in Enron stock, leading to significant losses when the company collapsed.

What was the main cause of the Enron scandal?

• Hacking of financial records

• Accounting fraud and hidden debts

• Illegal stock trading

• Environmental violations

Answer explanation

The Enron scandal was primarily caused by accounting fraud and hidden debts, where the company used complex financial practices to hide its true financial condition, misleading investors and regulators.

Which of the following was a key outcome of the Volkswagen emissions scandal?

• The company went bankrupt

• The company paid billions in fines and penalties

• The CEO resigned voluntarily

• It led to the complete shutdown of the company

Answer explanation

The Volkswagen emissions scandal resulted in the company paying billions in fines and penalties due to its illegal practices. This financial consequence was significant, while the other options did not accurately reflect the outcomes.