Dow Corning, Drexel Burnham Lambert and government contractors have all recently found themselves embroiled in various ethical dilemmas which have had very real financial consequences. In the case of Dow Corning, millions of women who underwent breast augmentation using the company's silicon implant technology are now complaining of ill health effects and, in some instances, significant diseases and even death. The ethical issue arises from whether or not the company knew of the health risks and whether the company chose to market a technology which it knew posed potential health problems.
Drexel Burnham Lambert suffered from its employment of Michael Milken, who quickly became known as the king of junk bonds. Milken perfected the art of bringing together investors and companies, particularly for commercial paper which would have been difficult to place elsewhere. Junk bonds (called high-yield bonds by Drexel) are bonds which offer high return in exchange for high risk. In some cases, the bonds were formerly investment grade, but have suffered a downturn in fortune due to a lack of confidence in the issuing company. Milken brought together companies willing to invest in junk bonds, and created a highly complex web of investors and investing companies. By the time the investigation was concluded, Drexel was implicated in insider trades, access to proprietary information, and fraudulent billing (with relation to Ivan Boesky). Milken and Boesky paid high sums in fines and both served prison terms, and Drexel eventually went out of business as a result of the investigation, which put it in a financial position from which it could not recover in a sagging economy.
Pentagate, as the media dubbed the problems with the Pentagon's procurement procedure, involves contractors who offer consulting services to companies trying to win contracts with the military. In most cases, these consultants formerly worked within the military the...