Suit CI

“Suit accuses CEO of taking $7M”

Perry Moore, Lipscomb University
January 19, 2021
North America
Human Resources & Organizational Behavior, Ethics & Social Justice
3 pages
Reputation Risk, ponzi scheme, due diligence, low-balling, background investigations, Reputation Risk, decision matrix
Student Price: 
$4.00 (€3.69)
Average rating: 

Neely Paul was intrigued by the newspaper headline (Underwood, 2006) that accused a local business CEO of embezzling $7 million. The headline reminded Neely of his recent difficulties in using his third-party medical benefit credit card issued by that CEO’s business (1Point Solutions). As Neely investigated and read an ever-increasing supply of news reports, he came to realize that his employer had outsourced administration of the company’s medical/dependent care plans to an entity that appeared to be operating as a Ponzi Scheme. Neely pondered the sufficiency of his employer’s due diligence, the viability of 1Point’s low-ball bid, and the impact of negative events identified through due diligence.

Learning Outcomes: 
  1. Identify steps to perform due diligence to evaluate proposals from third-party service providers
  2. Demonstrate how a decision matrix can be used to assess such proposals
  3. Evaluate the impact of assessing negative events revealed through due diligence, their impact on reputational risk, and why customers might ignore negative due diligence
  4. Assess whether an apparent ‘low-ball’ proposal is, in fact, a legitimate proposal