Page 19 - An Indispensible Resource for Being a Credible Activist

CHAPTER 1

WHY CREDIBLE ACTIVISM?

HOUSTON FIRM TO PAY $21 MILLION

IN IMMIGRATION CASE

OSHA FINES BP $21 MILLION FOR
FATAL TEXAS CITY, TX EXPLOSION

Sidley Austin Law Firm to Pay $27.5 Million
to Resolve Landmark Age Discrimination Case

When you read these recent headlines from across the United States, ask yourself: Can my
company afford risking convictions in civil court, criminal court, and/or the court of public
opinion? Which employees and internal processes might be putting my company at risk? A
2007 article in the CPA Journal cites these statistics from the Association of Certified Fraud
Examiners’ 2006 “Report to the Nation on Occupational Fraud and Abuse”:

● More than $600 billion in annual losses is attributed to fraud.
● Tips from employees, customers, vendors, and anonymous sources account for:
° 34 percent of the detection of all fraudulent activity
° 34 percent of the detection of fraudulent activity for not-for-profit companies
° 39.7 percent of the detection of fraudulent activity for government agencies
° 48 percent of the detection of owner/executive fraud schemes
● Anonymous reporting mechanisms are the antifraud measure with the greatest impact
on reducing losses:
° Companies with anonymous reporting mechanisms reported median losses of
$100,000, while those without these mechanisms reported median losses of
$200,000. 1
° BNET Business Network reports that shareholder litigation accounts for 47 percent
of all directors’ and officers’ liability cases filed against executives of for-profit

2