On July 13, 1995, the executive vice president of Daiwa's New York branch, Toshihide Iguchi, wrote a thirty-page letter to the president of Daiwa Bank in Japan. In his letter, Iguchi confessed to losing $1.1 billion while dealing in U.S. Treasury bonds over the past eleven years. Daiwa filed an initial report with the Japanese Finance Ministry's Banking Bureau on August 8, 1995. The Bureau told Daiwa to investigate the accusations, and a final report was submitted one month later. On September 18, 1995, six days after receiving the findings from Daiwa, the finance minister reported the findings to the U.S. Federal Reserve. Following the conclusion of the U.S. Federal Reserve Board investigation, Daiwa was fined $340 million-a reduction from the original $1.3 billion fine-and pled guilty to sixteen federal felonies, including two counts of conspiracy to defraud the United States and the Federal Reserve Bank, one count of misprision of a felony, ten counts of falsifying bank books and records, two counts of wire fraud, and one count of obstructing a bank examination. Furthermore, the U.S. Federal Reserve Board forced Daiwa to end all U.S. operations within ninety days of the ruling. Toshihide Iguchi had been hired by Daiwa in 1977 to manage the back office of the branch's securities business.

The New York branch managed the custody of U.S. Treasury bonds, bought by customers and by the bank itself through a subcustody account held by Bankers Trust. In 1984, Iguchi was promoted to trader, but he did not relinquish his back-office duties, thus creating the first breach of internal controls. The scam began when Iguchi lost an initial $200,000 in 1984 and tried to regain his losses by selling off bonds in the Bankers Trust account. Because Iguchi was both a trader and securities manager, he was able to conceal his unauthorized transactions by falsifying the Bankers Trust account statements that he managed through the back office of Daiwa's New York branch. Unfortunately, Iguchi could not recoup the losses, and the debts began to grow even larger. When customers wanted to sell off securities or collect interest on bonds that Iguchi had already sold, he settled their accounts by selling even more securities and falsifying the records. In the course of the eleven-year scandal, Iguchi sold approximately $377 million of Daiwa's customer securities and $733 million of Daiwa's own investment securities; he purportedly forged 30,000 trading slips to cover his losses.

Interestingly enough, in the end not one Daiwa Bank customer lost money in this scandal. During the 1995 federal investigation, Iguchi revealed that two additional unnamed traders had also incurred serious losses totaling approximately $97 million between 1984 and 1987. These losses had been concealed from bank regulators by shifting the losses to Daiwa's overseas affiliates and a shelf company set up in the Cayman Islands. During the investigation, it was discovered that the bank had been operating an unauthorized trading area, which was disguised as a storage room during regulatory examinations. It was also revealed that U.S. regulatory agencies had warned Daiwa in 1993 and 1994 about their poor internal controls; one in particular was Iguchi's dual role as a trader and securities manager. Perhaps the most damning blow to Daiwa's reputation was the fact that the bank knowingly engaged in a cover-up of the situation. Upon receiving Iguchi's first letter in July 1995, Daiwa began selling off assets before reporting the fraud to authorities, and it seems as though they also attempted to transfer the losses to Japan in order to avoid U.S. scrutiny. Furthermore, U.S. officials were discontented with Japan's finance ministry for belatedly reporting the fraud to U.S. authorities despite regulations requiring immediate notification.

Iguchi pleaded guilty to misapplication of bank funds, false entries in bankbooks and records, money laundering, and conspiracy and was sentenced in New York to four years in prison and a $2.6 million fine, which he will probably never be able to pay. Iguchi requested to serve the first fifteen months in solitary confinement in Manhattan's Metropolitan Correction Center-for fear of what the other prisoners would do to him-before being transferred to a relatively plush minimum-security facility in Pennsylvania. Several of Daiwa's senior managers were forced to resign, and on September 20, 2000, five years after the initial charges, a Japanese court ruled that eleven current and former board members and top executives were to pay the bank $775 million in damages, a decision that was immediately challenged. Today, Daiwa has withdrawn from all overseas banking operations and has instead been focusing on becoming the strongest regional bank in Osaka, Japan.

Environmental laws and regulations have not kept pace with the enormous rate of growth of the cruise industry. One set of regulating guidelines is called MARPOL (International Convention for the Prevention of Pollution from Ships), a set of standards for all ships to follow regarding the discharge of certain substances and for the building and maintenance of ships and their equipment. Another law governing cruise ship operations is the Clean Water Act, which prohibits the dumping of any pollutant within three nautical miles of the United States and prohibits the discharge of oil and other hazardous substances within twelve nautical miles. The second of two multimillion-dollar criminal fines against Royal Caribbean Cruise Lines originated from direct violations of the Clean Water Act. Another of the U.S. laws instrumental in governing cruise ships is the Federal Act to Prevent Pollution from Ships, which incorporates many of the MARPOL provisions. In 2002, Carnival Cruise Lines was found to be in violation of this law for flushing clean water through sensors instead of bilge water. Two more recent regulations are Title XIV of the Labor, Health, and Human Services Appropriations Bill and the International Safety Management (ISM) Code. Title XIV, signed and passed in 2000, requires the Coast Guard to develop monitoring and reporting programs for all ship discharges and authorizes the U.S. Environmental Protection Agency (EPA) to establish “No Discharge Zones.” The ISM Code, passed in 1998, is an international standard requiring cruise ship owners and operators to establish safety management systems that include an environmental protection policy with procedures for pollution prevention. Alhough it is not responsible for criminal charges or fines directly, a ship must be certified through the ISM in order to be eligible for insurance.

Several types of pollutants are associated with cruise ships. The first is black water, the sewage from toilets and urinals aboard the ships, and it is estimated that a typical one-week voyage generates as much as 210,000 gallons of black water. Despite strict regulations about the treatment of black water, wastewater expelled from the ships into the sea has been found to contain high levels of fecal coliform bacteria.

A second type of pollutant is gray water; the waste from sinks, showers, galleys, and laundry facilities. The one million gallons of gray water generated on a one-week voyage often contain such contaminants as soaps, detergents, cleaners, oil, grease, metals, pesticides, plastics, hydrocarbons, and even large amounts of fecal wastes. This waste can legally be dumped anywhere, even though the EPA says that gray water may have adverse effects on the environment that are as great or greater than those of black-water waste.

A third type of pollutant includes paint, maintenance materials, and the hazardous waste that comes from the ship's photo-processing labs and dry-cleaning facilities. The chemicals that are produced can be extremely toxic and can have serious adverse effects on the environment. Yet another type of pollutant is solid waste, including food, plastic, paper, wood, cardboard, cans, glass, and other material typically disposed of as garbage. A one-week voyage on a typical ship generates eight tons of garbage, and ships often directly violate the strict disposal regulations by dumping the garbage at sea. One ship, the Ecstasy, was found to have dumped 16,000 pounds of garbage at sea.

A final type of pollutant is oily bilge water. The bilge is the lowest point in the ship's hull, where the seawater that seeps into the ship is collected and then pumped back out into the sea. On a typical one-week journey, a ship produces 25,000 gallons of bilge water, and oil from the ship's machinery gets into it. On many occasions, the Coast Guard has been able to prove that ships bypassed antipollution systems, falsified oil record books, and dumped oily bilge water into the ocean.

Of the eighty-seven confirmed U.S. illegal discharge cases, 93 percent (or eighty-one cases) were brought for discharging oil or oil-related chemicals, whereas the remaining six cases dealt with the illegal disposal of solid waste. Royal Caribbean pled guilty to a twenty-one felony charges in one $18-million decision in 1999, only one year after pleading guilty to other criminal charges resulting in a $9-million fine. The $18-million Carnival Cruise Line case was settled on April 19,2002, after Carnival pleaded guilty to criminal charges related to the falsifying of oil records on six of their ships. Holland America Cruises plea-bargained for a $2-million judgment in 1998 after discharging oily water in Alaska's Inside Passage. Seven other cruise lines have also faced criminal fines in the past twenty years, including Norwegian Cruise Lines ($1 million in 2002), Palm Beach Cruises ($500,000 in 1994), Princess Cruises ($500,000 in 1993), Regency Cruises ($250,000 in 1993), American Global Lines ($100,000 in 1994), Ulysses Cruises (two $75,000 fines in 1997), and Seaway Maritime ($75,000 in 1997).

The International Council of Cruise Lines (ICCL), an agency designed to keep member cruise lines in compliance with industry regulations, claims that there has been vast improvement in pollution prevention among member ships. In 2001, the ICCL announced that it had adopted mandatory environmental standards for all members, which covers, but is not limited to, gray-water and black-water discharge, hazardous chemical waste, unused pharmaceuticals, used batteries, and burned-out fluorescent or mercury vapor lamps. Ships must comply with these new standards in order to maintain or gain membership in the ICCL.

In theory, the bidding system has a secret reservation price to limit abuses by putting a ceiling on the acceptable bid price. Two facts stand out about the reservation price. First, it is set very high, allowing excessive charges to the public. Second, the winning bids come in extraordinarily close to the reservation price; one survey found that the average winning bid was 99.2 percent of the cap. One can infer that the dango consistently knows the “secret” cap and had no concern about making this obvious through their bids. How does the dango learn what the reservation price is? Senior bureaucrats in Japan generally take early retirement and are provided with a sinecure in private industry or Japan's large quasi-nongovernmental organization (QUANGO) sector. This is known as amakudari (“descent from heaven”)-a revealing phrase that shows the great respect once felt for the bureaucrats. Their primary responsibility once they “descend” is to maintain close ties with their successors. A bureaucrat who refused to leak the reservation price would put his career in jeopardy. Bureaucrats are, effectively, immune from prosecution for leaking the reservation price. The “systems capacity” limitations are not resources, but the unwillingness to prosecute senior bureaucrats (who are far more powerful than their American counterparts). The dango is a cartel, and although the conventional economic wisdom is that cartels cannot exercise effective discipline, the dango has been able to maintain nearly complete discipline for over a half century. Corruption is part of the explanation. Japan's dominant party, the Liberal Democratic Party (LDP), comprises factions are known as zoku (“tribes”). The “construction tribe” is composed of LDP leaders who get a percentage kickback from the winning construction bidders. Faction leaders gain followers by providing campaign funds. The dango kickback ensures that the government does not interfere with the cartel. The faction leaders provide the “voice of heaven” (tan no koe) when necessary to resolve disputes that might threaten the dango's discipline. In addition to entrenching the LDP in power, the dango has major indirect effects. It serves as an informal trade barrier. Foreign construction firms cannot join the dango-and if they did, they could be prosecuted in their home nations for bribery. The dango directly makes construction far more expensive and indirectly creates an inefficient and bloated industry. The kickback creates strong incentives to spend far too much in public works construction. This, in turn, has done great damage to Japan's environment.

While the dango raises prices, it does not necessarily produce excessive industry profits. Domestic entry into construction is fairly easy. Easy entry and bid rigging have led to an industry that is at least twice as large as it needs to be. Many construction firms are insolvent because of their imprudent investments during the twin bubbles.

Japan's overall economic development has been harmed by the indirect consequences of the dango in three major ways. Productivity fell for many years in the construction industry, which is so large that it, in turn, materially lowered the nation's overall productivity. Japan's “main” banks are vital to growth because of the dominant role they play in capital allocation. The collapse of the twin bubbles left the main banks crippled, and Japan covered up their condition rather than “bailing them out.” This means that the banks generally do not collect loans from financially troubled borrowers, for if they demanded payment and were not repaid, they would have to recognize the losses. But Japanese banks cannot fund growth unless their loans are repaid. Many of their worst loans are to construction firms. The political support that the dango enjoys makes it extremely difficult for the banks to demand repayment from troubled construction firms.

Finally, the dango encouraged public works that would make no sense even if the bids were not rigged. As this is written, Americans are deriding the “bridge to nowhere” in Alaska that a Senator was able to demand as part of “pork barrel” politics. Japan is the champion of high-speed rail lines to nowhere and many other “white elephants.” The public works budget became so extreme that Japan's deficit became a barrier to growth. The dango allocates capital to the least productive uses.

What are Wal Marts intentions? To answer the question on the tips of every ones tongues we have to ask the experts. According to CEO, Lee Scotts Address to the Los Angeles Town Hall, USA Today?s ?California tries to slam lid on big-boxed Wal Mart?, Dallas Morning News? ?Council gives Wal Mart the ok?, and CQ Researchers ?Is Wal Mart good for America? Pros/Cons?, the line between a consumer driven store and a corporate empire is thinning.

Some of the arguments made toward Wal Mart and how it is evil are ridiculous, like the claim that Wal Mart ?secretly collected life insurance benefits from its dead workers,? (Norman). But some of the claims made are more realistic and more valid. One of such claims comes from Wal Marts competitors. Not just other big-box stores such as target and shop-ko, but also little mom and pop shops. The argument made is when Wal Mart moves in it pushes smaller non corporate businesses out.

Sam Walton?s ideas of everyday low prices have stuck, and Wal Mart everyday lowers its prices so low that other smaller businesses can?t afford. Therefore making them, either move to another location or close its doors fo ever. Retail consultant George Whalin explains, ?There?s a reason Wal Mart is the largest retailer in the world, consumers want to buy things at lower prices,? (California). The fight against Wal Mart can be felt anywhere, but on the forefront, pushing Wal Mart back to Arkansas where it came from is California and Texas. California alone has tried to ban all super centers from taking up root in its state. They question Wal Marts intentions, asking if ?Wal Marts ultra competitive business practices -critics call them cutthroat and predatory ? are in their best interest,? (California). But how does Wal Mart get its competitive edge? I work at Wal Mart and I have learned a thing or two about price changes.

One thing you need to know is Wal Mart does price matching, which is where customers can get the lowest price on any good if they bring in an advertised price for something that is priced higher at Wal Mart. But how does Wal Mart beat the prices? They pay all of their department heads to go to other retailers to make sure the Wal Mart price is the lowest price. Also they have so called ?rollback? items. These special items go on sale and are usually marked down by a couple of dollars.

Usually, however isn't? always. Sometimes, especially in the electronics department an item is falsely marked as a rollback item. The associates show the price it originally was as the marked down price and raise the original price to show its false mark down. It doesn?t happen that often but it does happen. Which doesn?t seem to be in the consumer?s best interest, or any ones other than Wal Marts?

California legislature has gone as far as to try to ban all super centers, as of right now California has no super centers. The board of supervisors in Contra Costa ?voted to limit stores that devote more then 5% of space to groceries to 90,000 square feet,? Which with out naming Wal Mart banned super centers (California). Wal Mart wants to change all of that by placing a new super center every two months. Or as Lee Scott, CEO of Wal Mart in his address to Town Hall of Los Angeles puts it ?more then 25 towns in California where we?ll be opening new stores just this year?, added to the 3,600 facilities already just in the United States. He argues that Wal Mart brings many jobs, with good benefits, and better businesses to weakening economies. Yet when Wal Mart wiggles its way into a town most of the smaller businesses around it disappears and seems to attract other corporate machines. But to think it only effects local businesses is naive; Wal Mart also hurts other big-box stores.

Between 1997 and 2002 in Dallas, Wal Mart added 34 stores to it?s already over populated monopoly, the result? All of Winn-Dixie?s 15 stores were left alone and Winn-Dixie pulled out of Dallas completely, and that?s just one example (California). Wal Mart is disastrous to all retail.

First thing that comes to mind when talking about Wal Mart is jobs. According to Wal Mart.com, Wal Mart alone employs 1.6 million associates worldwide. When talking about jobs, some questions come to mind. First, is wages, it has been said that Wal Marts wages bring down the national average. Yet Wal Mart continues to brag about its wages saying that they are competitive to other retail organizations. ?Wal Marts average wage is around $10 an hour, nearly doubling the federal minimum wage? (Scott). What he doesn?t mention is why the average is so high.

When you first start at Wal Mart your lucky if you make more then $6.50 an hour, and after being there for a few months your pay starts to rise. You only get a raise at 90 days, at a year and then every year after that. You don?t start making money until you?ve been there for years, if you are an everyday, full-time associate at a regular Wal Mart or super center.

Now why is the average so high? Because it includes distribution centers, which starting pay is probably around $10.00 an hour in it?s self, then there is night receiving and over night stock, which gets night differential, naturally making more. It is because of these reasons why the average is so high. But most of its associates are new and only make $6.50 an hour, which doesn?t seem to compare to the average at all. Another claim made by Al Norman, founder of Sprawl-busters.com and author of ?Slam-Dunking Wal Mart: How you can stop super center sprawl in your home town.? is that Wal Mart ?was sued in 32 states for forcing its employees to ?work off the clock??.

At first I didn?t believe this, when I first started all I heard was not to work of the clock with out using a time adjustment sheet or have a manager override the clock in if you want to work early. Which is just a sheet of paper that the associate has to fill out if they worked on a break or walking out, ?you are to get paid for every minute you work?? But just this week my store got rid of the time adjustment sheets entirely, and now the associates have to log themselves on to the computer and clock themselves in if they want to come in early or on a day you weren?t scheduled, with out a mangers approval right away. Instead you clock yourself in and wait a few days after working the shift to see if you were accepted to work early or at all. Raising the question if you really get paid for those hours.

Another question raised with working at Wal Mart is the unionization of individual stores. Most recently the focus has been in Loveland. The store wanted to become a unionized store but when it came to voting the motion failed, miserably. From personal experience I can see why the motion was canceled, according to many employees from the Loveland Store the heat came down hard on those who had planned to vote to become a union. They were harassed and their jobs were threatened. Wal Mart has an ?open door? policy, which means if an associate has a problem with any member of management or another associate, the associate is supposed to feel welcome and free to talk to another member of management. But when it comes to unions, somehow the situation is different.

One night while cleaning an associate found a department manager card discussing unions and how to handle questions concerning them. It said for the manger to thank the associate for asking the question and answering them the best they could, if they couldn?t answer the question they are to tell them it was a very good question and they would get back to them after they find out the answer. But at the bottom of the card we found something strange, it instructed the department manager to tell a higher member of management as soon as possible. It seems strange that the associate is to feel welcome and shouldn?t be afraid to ask questions or talk to management about problems, but when reading cards like that it makes it clear how Wal Mart can be thought of as the evil corporation many claim it to be.

No doubt Wal Mart gives money to charities and does its part to helping out the communities. Through its Good Works initiatives and donations made throughout the year and throughout the country, Wal Mart has given over $170 million dollars. With a record like Wal Mart who can blame them for trying to smooth out the rough edges of this evil corporation. ?Wal Mart?s value can be calculated in jobs, economic growth and charitable partnerships in communities throughout the country.? If this is the case then Wal Mart?s value is based on lies, pushing and shoving and faulty motives. What else can we expect from a multi million dollar corporate machine?

Wal Mart is just another American sugar coated evil that tricks its customers and associates to be loyal and keep money in the pockets of their stock holders. CEO Lee Scott himself says, ?We believe that offering good jobs at fair wages and benefits with unparalleled opportunities for advancement while also delivering world class savings for our 270 million customers is the best way to do right by all our stakeholders.? That sounds great and grand, if that?s where that thought ended, but Scott doesn?t stop there.

If we kept our low prices and raised our average wages and benefits above today?s market levels by a few dollars an hour or so, we would sacrifice a hefty chunk of our profits ? hurting shareholders who ha?ve entrusted us with their savings.

America must be aware of Wal Mart's true intentions, which coming from the mouth of its CEO'?s, its intention is for number one, themselves. They have to watch out for themselves and their shareholders before they can truly watch out for the consumers. Even if California?s attempts seem to be a modern day story of David vs. Goliath, it is good to see that not everyone just deals with Wal Mart taking over the world. So if asked if Wal Mart is evil, my reply is simple. ?Did David slay Goliath??

It does not mean that one need to do all the work the analysts do to make a judgment about the scandal and its impact on the company. If the scandal is because of person having a high position in the company, it will impact the most. Whereas an average employee might be involved for the sake of small gains, only to slightly or not impact the whole company.

The company?s future may be affected by a scandal. But if the impact can be large then it is better to leave the stock than to hold. The bigger things will always be clear before they can hit you. As an investor you have an advantage to take the avoid losses before the company does. If it is clear that the scandal is small and it does not affect in the long term then it is better to grab the opportunity to enter into the stock as some investors would have already started selling the stock. If the company has insurance it can help the investors.