Imprisoned hedge-fund billionaire hit with big civil settlement; pharmaceutical firm to pay millions to settle charges that it issued bribes in Asia, Europe, and South America; ZDNet columnist says it?s about time Google developed an algorithm to measure ethical business
The year?s closing news about business featured several pieces touching on ethics. Among the stories:
- Hedge fund billionaire Raj Rajaratnam, now serving the longest prison term ever imposed for insider trading, also will have to pay $1.45 million to settle a civil suit brought by the U.S. Securities and Exchange Commission (SEC), reports India?s Zee News. The penalty largely pays back profits made and losses avoided after Rajaratnam acted on side information provided by a Goldman Sachs director, who was convicted earlier in a separate case. It also includes repayment of interest earned on the tainted profits.
- Pharmaceutical firm Eli Lilly has agreed to pay more than $29 million to settle charges that its subsidiary firms bribed foreign companies in Russia, Brazil, China, and Poland, reports the Wall Street Journal. The SEC charged that Eli Lilly became aware of the practices more than five years ago but did nothing to stop the bribes. ?When a parent company learns tell-tale signs of a bribery scheme involving a subsidiary, it must take immediate action,? SEC associate enforcement director Antonia Chion said in a statement, notes the Journal.
- ZDNet columnist Tom Foremski details how a new website allegedly was sabotaged by a competitor who had the upstart operation inaccurately flagged as a spam site. The case involved a car-sales company that found itself stigmatized by a new Google algorithm that can be exploited to make it appear that the site is being listed by many others as a spam or attack site. The practice, known as ?Reverse SEO,? referring to the practice of search engine optimization (SEO), is a growing problem, according to Foremski. Foremski chides Google for only responding ?to unethical behavior by others, such as labeling a competitor a scam.? Foremski notes that ?the rise in negative SEO shows how the design of the algorithm encourages unethical business practices?. Can Google design an algorithm that rewards ethical businesses? Companies competing to be more ethical than each other would be a very good thing to see.?
Sources: Zee News, Dec. 28, 2012 ? ZDNet, Dec. 25, 2012 ? Wall Street Journal, Dec. 20, 2012.
For more information, see: Related Newsline story, Dec. 17, 2012 ? Related Newsline story, Dec. 10, 2012 ? Related Newsline story, Oct. 29, 2012 ? Related Newsline story, Nov. 26, 2012 ? Related Newsline story, Nov. 19, 2012.
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