Case Studies Flashcards
What was the Post Office Horizon scandal?
More than 900 sub postmasters wrongfully prosecuted for stealing due to incorrect information from Horizon computer systems. Post Office prosecuted 700 people 1999-2015, further 283 brought by other bodies. Many sub postmasters went to prison for false accounting and theft, several were financially ruined. 2017, 555 sub postmasters took legal action, led by Alan Bates. 2019, PO agreed to pay them £58m compensation, most of that spent on legal fees. Horizon system introduced by post office in 1999, many bugs reported and dismissed. In house lawyers should have blown whistle when they realised ysstem errors, instead claimed robustness of software.
Coop Bank scandal
Scandal over former CEO, Paul Flowers, caught purchasing drugs in 2013. Also hired male escorts for sec, previous convictions for gross indecency and drink driving. Merger with Brittania in 2009 exposed £1.5bn blacl hole in accounts, had to be rescued by bondholder bailout 2013.
HBOS fraud
One of Britains biggest banking frauds, Major fraud in early 2000s at Reading branch, 6 jailed. Board of HBOS alerted to serious fraud allegations in 2007 but repeatedly failed to investigate. 2002-2007, small business owners transferred to HBOS’ corporate division headquarters in Reading. Classified as high risk, even when never missed repayment. Lynden Scourfield Head of Impaired Asset Division would require owners to appoint consultants Quayside Corporate Services. QCS would submit inflated business cases for additional finnace and HBOS would extend funds. QCS would siphon money from companies by invoicing owners for very large fees. QCS gave Scourfield hundreds of thousands in cash, holidays, watches, drugs and prostitutes. Many busineses asset stripped by QCS, made bankrupt or sold for small amounts to companies linked to QCS owners.
BB&T bank
North Carolina. In subprime mortgage lending crisis, BB&T refused to issue these bad mortgages. As result remained profitable throughout crisis and recession. CEO ‘never do anything that is bad for clients. May make short term profits but it will come back to haunt you’.
ELO touchsystems
Relocated from Tennessee to California. Offered bonuses to employees who moved. Those who could not, helped advertise and find new jobs for them in Tennessee.
