Course:MGMT405 2021W2/Case-2iii

What Happened?

Sunbeam is an American home appliance producer and was founded in 1897. In the mid 1990’s Sunbeam’s Chief Executive Albert J Dunlap and four other members of his management team fraudulently created the illusion of a successful turnaround for the company . These tactics inflated the company’s share price, allowing them to gain millions off of stock profits.

Industry	Electric Home Appliances
Founded	1897
CEO	Andrew C. Hill
Products	Blenders, Mixers, Coffee MakersDeep Fryers, Breadmakers
Website	https://www.sunbeam.ca/
Social Media	https://www.facebook.com/SunbeamCanada

Setting the Stage for “Chainsaw Al Massacre”:

After several years of undesirable sales and profits numbers, the primary equity holder of Sunbeam, Japonica Partners, hired Al Dunlap as the CEO of Sunbeam in July, 1996 . The intended goal was for Sunbeam to make a quick turnaround and increase stock prices in order to sell the company for a higher profit. Prior to his time at Sunbeam, Dunlap had earned the reputation as “Chainsaw Al” as he was known for his quick turnarounds of companies through aggressive cost cutting tactics. Investors were definitely keen on his new position as CEO as Sunbeam stock prices increased by 50% just one day after he was hired .

Dunlap was quick to fire most executives and replace them with a new team that was more compliant with his approach. A key player in this scandal was Russell A. Kersh, the newly appointed CFO who had also worked with Dunlap at Lily-tulip and Scott Paper. Dunlap knew that he could rely on Kersh to meet numbers and quotas that he wanted with the use of Kersh’s “ditty bag”. Top executives and managers were incentivized by the 250-300 stock options awarded to them by Dunlap. The stock options had a vesting period of three years which would encourage the management team to stay with the company for three years, tolerate Dunlap’s abusive behavior, and continue facilitating the rapid increases in the company’s stock price. Managers willing to follow Dunlap's plan would reap millions through the increase of their stock option values.

Next Dunlap, with the help of Donald Burnett and twenty other Coopers and Lybrand (C&L) consultants, proposed a restructure to cut costs by immense margins. The proposed plan included eliminating 87% of Sunbeam’s products and 6000 employees and in the end 12 000 employees had been fired. Many departments were reduced to such staffing levels that goals and quotas were impossible to attain.

Summary of Fraudulent Activities:

Now that the “Fraud Triangle” (1. Incentives/Pressure, 2. Rationalization, 3. Opportunity) was complete, Dunlap and his team implemented the “Cookie Jar Reserve” in 1996. Managers were given unrealistic and impossible numbers to reach, pressuring them to commit fraud. The “Cookie Jar Reserve” was used to mislead investors by overstating liabilities and expenses and understating assets and revenues. An illusion of higher profitability in certain periods would be created by shifting/recording profits from past periods in future periods. By artificially lowering profits in 1996 and then suddenly inflating profits in 1997 it gives the appearance that the company has grown immensely which in turn drives up stock prices.

The “Cookie Jar” was only the beginning of the fraudulent activities. On top of overstating their 1997 net income, the company engaged in a multitude of fraudulent activities including channel stuffing and recording supplier rebates in wrong accounts and periods. Channel stuffing techniques that Sunbeam used included non-disclosure of early-buy incentives, contingent sales, and “Bill and Hold” strategies. The early buy incentives are not illegal as long as they are disclosed to the public, however Sunbeam did not notify the public and therefore misled investors by having higher first quarter sales increases which tamper with the expectations that investors have of sales in later quarters . Sunbeam also engaged in a fraudulent “sale” of 1.5 million dollars as they sold barbeques to a customer before the end of a quarter and then had the customer return it after the quarter was over. This fraudulent sale allowed Sunbeam to record increased sales and decreased inventory of 1.5 million . Finally, their “Bill and Hold” strategy would have customers order products before necessary but not deliver any products yet. These sales should not yet be recorded until the delivery of the products however Sunbeam would fraudulently record these sales to boost their sales in the second quarter of 1997.

Who Were the Key Players?

Albert J. Dunlap

An Introduction to Chainsaw Al

Albert J. Dunlap was brought into Sunbeam in 1996 by the primary equity holder in Sunbeam (Japonica Partners) to turnaround the company after the two previous CEOs were unable to improve the sales and profits of the company. Dunlap was known for his quick corporate turnarounds that resulted in dramatic increases in share value. His management philosophy centered around maximizing shareholder wealth while cutting down costs at all levels of the company. He was not afraid to fire employees and rearrange the company to fit his end goal, no matter what casualties resulted. He was the opposite of the past CEO, Robert Schipke. Dunlap was intense and self promotional. He was so sure of himself and the success he would have in turning Sunbeam around that he invested $5 million of his own money in his first 8 months at the company .

Al's Corporate Restructuring of Sunbeam

Dunlap promptly fired most top executives at the company and brought in his own team. With his team established, Dunlap awarded 250-300 of the top executives, managers and officers significant stock options . With a 3 year vesting period, these options worked as motivation for the team to stay with the company for 3 years, tolerate Dunlap's abusive management style and aid him in his goal to rapidly increase the stock price.

Dunlap turned to senior partner at Coopers and Lybrand, Donald Burnett, to help him figure out where to cut costs within Sunbeam. With Burnett’s help, Dunlap eliminated 87% of Sunbeam’s products and fired 12,000 employees . Many departments had such reduced staff levels that it was impossible for them to get the work done that was expected of them. This caused major issues in the company such as not being able to bill customers and losing track of shipments. Eventually the company had to hire independent contractors to complete the work, which cost much more than what it would have to keep the laid off employees.

Sunbeam's Stock Price Under Al

In 1996, Dunlap's first year at the company, he declared that he would not be able to turn around the year for Sunbeam because the damage Schipke had done was too extensive but he promised that with his restructuring plan Sunbeam would have a dramatic turn around in 1997. His predictions came true and in 1997 the stock price climbed steadily and it became the highest in the industry. In 1998 Sunbeam acquired Coleman, Mr. Coffee and First alert but in the first quarter their earnings fell below predictions. Dunlap stated that his attention had been temporarily diverted by the acquisitions and the stock would climb back up in 1999 but he never made it that far.

Al's Contribution To The Fraud

The fraud began when Dunlap and his CFO (Russell A. Kersh) employed a “Cookie Jar Reserve” technique where the company used accounting timing techniques to shift profits from one year into a future year . This was done by overstating liabilities and expenses and understating assets and revenues. This technique is not valid accounting and is used to mislead investors. When Dunlap and Kersh arrived at Sunbeam they reported very high restructuring costs. Although it is acceptable for companies to expense restructuring costs when they occur, Dunlap and his team used these costs to make 1996 profits appear lower creating a reserve to overstate 1997 profit. When Dunlap arrived at Sunbeam in 1996, he suggested that he was unable to improve Sunbeam’s financials in 1996 because of how bad the previous CEO had messed them up. By understating the profits in 1996 he was able to display a huge increase in profit from 1996 to 199, making it look like he was able to turn the company around. This caused trouble later because Dunlap used all the reserves in 1997 and couldn’t repeat the technique in 1998.

Dunlap went on trying to utilize more financial gimmicks but in 1998 the plan continued to unravel. Throughout 1998 the stock price continued to fall and on June 13th, 1998, Al Dunlap was fired by Sunbeam’s board of directors. He was charged with devising illegal accounting maneuvers to mask Sunbeam’s financial troubles and in 2002 he paid a $500,000 penalty to settle his SEC charges.

Japonica Partners

Japonica partners took over Sunbeam in 1990 and over the next several years made incremental improvements to the company. In 1996 they wanted to sell Sunbeam stock in an IPO but first wanted to create more value so they could sell the stock at a higher price. This is when they brought in Albert Dunlap, they had hopes that with his history of quick corporate turnaround he would be able to increase Sunbeam’s share price and prepare the company for sale. They looked at Dunlap’s history with rose colored glasses, only able to see the effect he could have on their share price without looking at his history of weakening companies, demoralizing work forces and manipulating financial statements. As the board of directors had a huge personal stake in the company and were at risk of losing so much of their own money, their motivation to come out on top of their investment clouded their vision.

Russell A. Kersh

When Al Dunlap became CEO at Sunbeam, he quickly fired most executives and replaced them with his own management. This new team included Russell Kersh as CFO. He had worked with Dunlap on two of his prior corporate turnarounds and Dunlap knew he could rely on Kersh to do anything he needed to do to improve a companies’ Financials. Based on his past success in turning companies around and the financial reward that came along with it, Kersh rationalized the fraud as a key to financial success in corporate turnarounds.

Kersh was Dunlap’s right-hand man and instrumental in the Sunbeam fraud. He was in charge of Sunbeam’s finances and employed various fraudulent techniques to inflate share price and create a false image of company turnaround .

Arthur Andersen

Arthur Andersen was in charge of Sunbeam’s external audit at the time of the fraud. Phillip E. Harlow, a partner at the firm, aided the scheme of fraud by signing off on false financial statements. He called out Sunbeam for their falsified financial statements but instead of deciding not to sign off on them he only made them reduce the unallowed profits to an immaterial value and then signed off. In November 1998, Harlow ordered audit staff to destroy any audit working papers for 1996 and 1997 that didn’t agree with the conclusion of the audit. The disclosure was made in a sealed deposition and went largely unnoticed by the public.

Eventually Arthur Andersen agreed to pay $110 million to settle a civil suit brought forward by Sunbeam investors. A lawyer for Harlow stated that the SEC’s allegations against his client “reflected professional disagreements about application of sophisticated accounting standards,” not fraud. There were no significant consequences for the firm at the time, but their eventual demise was caused by a similar action by the firm.

Robert J. Gluck, Lee Griffith and Donald R. Uzzi

Gluck, Griffith and Uzzi were all other top executives at Sunbeam. Gluck was the financial controller and Uzzi and Griffith were the former vice presidents. They were all part of the management team Dunlap brought in when he was named CEO of Sunbeam.  All 3 were named in the SEC's case against Sunbeam. They aided Dunlap and Kersh in the scheme of restructuring Sunbeam to facilitate a sale of the company at an inflated price. Gluck aided Kersh in creating the cookie jar accounting reserves that were used to inflate income in 1997.

Deidra DenDanto

Deidra DenDanto was a young internal auditor at Sunbeam. She began noticing problems in the companies’ books in 1997 and these problems only grew through the year into 1998. She began to question the effectiveness of internal controls and correctness of product returns and bill-and-hold transactions. She found management was not responsive to her concerns and she questioned the role of the internal audit department if not to catch these errors. She drafted a memo on March 12, 1998, to executive management and the board of directors. She commented on the lack of ethical behavior and the violations of accounting standards. She took the memo to her supervisor (Thomas Hartshorne) who discouraged her from sending it and after a call with him and Kersh she decided not too. She was young and frightened to cross Kersh but if she had sent the memo maybe she would have been able to uncover and report the fraud earlier then it was eventually discovered reducing the harm done to shareholders.

Who Was Most Responsible for the Governance Failure?

Our team felt as though Al Dunlap was most responsible for the Sunbeam accounting fraud. Dunlap had a reputation for quick corporate turnarounds before coming to Sunbeam but he also had a prior accusation of accounting fraud by his former employer from the 1970s. With a more thorough background check Sunbeam could have possible avoided "The Chainsaw Al Massacre", but he most likely would have gone on and done what he did at Sunbeam at a different company.

Dunlap had so much experience with prior success and rewards that he was able to rationalize the fraud. He was hired by Sunbeam to do what he had done at past companies and therefore felt like his actions were validated as long as he reached his end goal. Dunlap hired his own team of individuals who he felt like he could trust to do what needed to be done in order to increase share price, whether it was legal or not. By firing so many employees and aggressively cutting down on costs, Dunlap left the remaining employees overworked and managers with overly high expectations for success . Even though many managers and employees were not aware of the fraud, Dunlap created pressure and incentive to be passive participants in his scheme.

Overall Dunlap had an attitude that the end justifies the means. His greed and craving for success in conjunction with his creative strategies allowed him to obtain/achieve whatever he desired.

Who Were the Key Stakeholders?

Shareholders and Investors

Sunbeam’s shareholders and investors suffered from a huge decline in stock price after the scam was revealed in 1998. For the purpose of increasing the stock price, Dunlap was hired. Just like what the board of directors of Sunbeam had been expecting, the stock price of Sunbeam consistently rose through 1997. Even on the day Dunlap was hired to run the company, the stock price increased by 50%. Lowering the 1996 reported net income and inflating the 1997 reported net income made the profit of Sunbeam appeared to increase drastically, which, contributed to a rapid rise in stock price in the following year. Dunlap’s radical move to cut product lines and close plants as well cut down jobs excited the analysts and pushed the stock price even higher in 1997.

The first turning point of the stock price appeared as Dunlap announced the plan to hire investment bankers to explore the possibility of merger, sale and acquisition. Though the initial plan for Dunlap was to sell sunbeam, the high stock price made the deal impossible for most acquirers. In April 1998, the acquisition of Coleman, First Alert and Signature brands helped the company to recover from the decreasing stock price. Soon after, the stock price of sunbeam reached a historical high of $53. However, the management team of Sunbeam could no longer keep the illusion of growth or stability of the company’s financial situation. The first warning that sunbeam would miss its revenue targets put an end to sunbeam’s high stock price. The stock price decreased to more than a half when Dunlap was fired. The end of the fraud period did not prevent the drop of stock price. In January 2001, the New York Stock Exchange delisted the company’s stock. Shortly after, Sunbeam announced to file for Chapter 11 bankruptcy protection in February 2001. The stock price of Sunbeam was only traded at 51 cent the week before Sunbeam was delisted.

Employees

Within the case of Sunbeam’s fraud, employees and some of the management team suffered not only from the bankruptcy of the  company but also the strategies taken by Dunlap and his executive team from 1996 to 1998. The old executive team were quickly fired after Dunlap was hired and he built a new team that supported his strategy. To initiate his cost-cutting strategy, Donald Burnett, the senior partner at Coopers & Lybrand proposed a plan to Dunlap that included eliminating 87% of Sunbeam’s product line and around 6,000 employees with the help of more than 20 consults. A total of around 12,000 employees were fired.

Management team

Though many managers were not aware of the fraud, the executives and the top managers had the incentive for fraud. Dunlap gave significant stock options to the executives, top managers and officers for tolerating his behavior, staying in the company and aiding for rising stock price. Some of them were sued for fraud.

Internal Audit team

The internal audit team at Sunbeam consisted of only two people. The young auditor Deidra DenDanto noticed discrepancies in the company's financials throughout 1997 and into 1998. She had drafted a memo and commented the unethical behavior in the memo. Her boss Thomas Hartshorne was recruited by Kersh, and this close relationship might have resulted in non-objectivity. Though she wanted to present the memo to shareholders, she eventually did not send the memo after discouragement from her boss and a following conference call with Kersh.

External Auditor  

Arthur Andersen

Arthur Andersen was the auditor for Sunbeam during the fraud. Phillip E. Harlow, the partner of Arthur Andersen who was in charge of Sunbeam’s audit, concluded that the reported profit in 1997 was not allowed under the accounting standard. However, this issue had not been taken seriously after Sunbeam cut $3 million profit. He decided the remaining profit was not material and according to the audit opinion, profits were “presented fairly, in all material respects'' in terms of the company financial position. He was soon after accused of aiding the Sunbeam fraud by signing off the report. Arthur Andersen eventually agreed to pay $110 million to settle the accounting-fraud lawsuit.

Creditor

Three banks held around $1.7 Billion in secured loans of Sunbeam when the company filed the bankruptcy. Its biggest secured creditors, Morgan Stanley Senior Funding Inc.was owed $665 million, followed by First Union National Bank and Bank of America, each owed $499 million. These three banks supported the bankruptcy of Sunbeam through converting most of its debt into other forms of debt and equity and issuing an additional $285 million credit.

Concluded Lawsuits

In administrative proceedings File No. 3-10481, Securities and Exchange commission settled the case against Sunbeam Corporation by imposing a Cease-and-Desist order. This injunction notifies the accused party of the violations and prohibits any

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future illegal activities. This type of order serves as a warning to the violator to deter activities deemed suspicious and if activities are continued then legal action may be pursued.

Violations

1) Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act

An issuer of securities and its management breach the "anti-fraud" provisions stated in Section 10(b), by knowingly making misleading fillings with the commission. These false actions are a reckless disregard for the truth and harm the business environment. The organization intentionally breached Section 17(a) of the Securities Act when it offered and sold Zero Coupon Bonds by making false and misleading fillings and public statements. In Sunbeam's offering memorandum for the bonds, the organization knowingly misrepresented it's operating revenues due to non-compliance with GAAP. Management played a reckless role by not knowing that the company's results and disclosures were unfaithful and materially false. As such, Sunbeam has provided enough evidence of violating Section 17(a) of the Securities Act and Section 10(b) of the exchange act.

2) Section 13(a) of the Exchange Act

An issuer of securities is required by Section 13(a) of the Exchange Act to file accurate, quarterly and annual reports. The act also requires that all information presented in reports is sufficient to conclude that statements are not misleading. Furthermore, the act requires compliance with GAAP when reporting. Considering these facts, Sunbeam failed to adhere to Section 13(a) and disclosed materially false financial statements and did not meet the standards of disclosure for business operations affecting future business outlook. As a result, it was in clear violation of Section 13(a) by breaching the trust of stakeholders through misleading statements and inaccurate quarterly and annual financial statements.

3) Section 13(b) of the Exchange Act

This section of the Exchange Act, requires mandatory internal controls which protect the integrity of financial records not including maintaining books, records, accounts of transactions related to disposition of assets. It also requires the issuer of securities to abide by GAAP when reporting interim financial statements. The administrative proceedings disclose that Sunbeam failed to report accurate information several times over a period of time and thus indicating that they lacked adequate internal controls. The proceedings also accuse the defendant of deleting records from their computer therein violating Section 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act.

Court Orders

Cease-and Desist Earnings Management Accounting Policies

The order against Sunbeam corporation restricts it from employing earnings management techniques to increase the stock price and mask it’s deteriorating financial position. The order specifically prohibits Sun Beam from reserving income into the following accounting cycle, and discontinue fraudulent use of non- GAAP, bill and hold recognition to accelerate sales. Furthermore, Sunbeam corporation is barred from misleading investors and analysts in Press Releases and Annual statements about the company’s performance. An example of the violation can be observed in the press release of its fiscal 1997 results, when Sunbeam claimed a record income of $189 million USD and asserted that the sales increase was a clear indication of a successful strategy.

Compliance with GAAP

After audits, it was actually revealed that $62 million USD of income recognition did not comply with GAAP principles. In addition, the auditors noted that 16% of income came from items that were due for adjustment and deemed the recognition improper. As such the court ordered to cease and desist incompliance with GAAP reporting.

Judgement against Arthur Andersen Audit Partner and Sunbeam Executives

Philip E. Harlow (Audit Partner, Arthur Andersen)

Audit Partner of Sunbeam, responsible for conducting financial statement audits

In SEC v. Albert Dunlap et al., Civil Action No. 01-8437-CIVthe defendant Philip E. Harlow (Audit Partner of Arthur Andersen) auditing Sunbeam's 1996-1997 financial statements settled with the security exchange commission by consenting to the order which restricted Philip E. Harlow to practice accountancy with a right to appeal after three years. In exchange the complaint was withdrawn by the plaintiff and thus dismissed by the district court. In the order, the commission found that Philip E. Harlow failed to practice professional judgement while conducting auditing procedures. By not taking due professional care, the audit partner failed to recognize audit risks, and by including transactions that did not conform to GAAP caused a material impact on the financial statements. For instance, the lack of professional care is evident when the 1997 year-end audit ignored revenue that was improperly recognized despite clear violation of Generally Accepted Accounting Principles. Since, Philip E. Harlow failed to exercise due diligence while conducting audit, the audit report was inaccurate and thus the commission ruled that Philip E. Harlow engaged in "Improper professional conduct".

Robert J. Gluck (Controller and Chief Accounting Officer, Sunbeam)

The Honorable Judge Donald Middlebrooks found Sunbeam's Chief Accounting Officer, Robert J. Gluck guilty of violating Section 17(a) of the Securities Act and Sections 13(a) and 13(b) of the Securities Exchange Act, thereunder;

i) Permanent prohibition from violating or aiding and abetting violations of anti fraud, internal controls and reporting standards of the commission.

ii) Ban from serving as an officer or director of public company for a period of five years

iii) Civil Fine of $100,000 USD

Donald R. Uzzi (Vice-President of Sales, Sunbeam)

The Honorable Judge Donald Middlebrooks found Donald R. Uzzi guilty of violating Section 17(a) of the Securities Act and Sections 13(a) and 13(b) of the Securities Exchange Act, thereunder;

i) Permanent prohibition from violating or aiding and abetting violations of antifraud, internal controls and reporting standards of the commission.

ii) Civil Fine of $100,000 USD

Russell Kersh (Chief Financial Officer, Sunbeam)

The Honorable Judge Donald Middlebrooks signed the final judgement on September 4, 2002 and the lawsuit was settled

i) Permanent prohibition from violating or aiding and abetting violations of anti fraud, internal controls and reporting standards of the commission.

ii) Ban from serving as an officer or director of public company for a period of five years.

iii) Civil Fine of $200,000 USD

Albert Dunlap (Chairperson and CEO, Sunbeam)

The acting chairperson settled on September 4, 2022 and thus concluding the investigation.

i) Permanent prohibition from violating or aiding and abetting violations of anti fraud, internal controls and reporting standards of the commission.

ii) Ban from serving as an officer or director of public company for a period of five years.

iii) Civil Fine of $500,000 USD

Where Are The Key Players Now?

Sunbeam

Even after years of unethical and fraudulent practices, Sunbeam tried to come back from the ashes but the casualties were too severe. After trying to hire new management teams, Sunbeam filed for bankruptcy protection in 2001. Sunbeam emerged from bankruptcy in 2002 but all common stock was canceled and the stockholders received nothing . Even after changing its name to American Household, it could not survive its one last effort at recovery. Ultimately,  the Jarden Corporation purchased American Household, INC., making Sunbeam products part of its branch . Even though Sunbeam-Oster is no longer a company, many of its products can still be found and are still recognizable.

Sunbeam BOD

Many deemed the entire executive team of Sunbeam to be responsible for the unethical practices that went on and in fact, SEC asked the court to fine all the defendants and bar Dunlap and three of the former officials from serving as officers or directors of public companies . The scandal showcased what these individuals were capable of and how detrimental it could be for a company.

Al Dunlap

Considering Al Dunlap, his previous fraudulent behavior caught up to him when the New York Times discovered that he had engaged in similar fraud 20 years earlier in a position he never included in his resume . This position was at Nitec Paper Company who later filed for bankruptcy due to Dunlap’s activities. Dunlap had committed several misinterpretations from missing expenses, to nonexistent sales which caused many of Nitec’s senior management to threaten to quit if Dunlap continued to be in charge. After Sunbeam had filed for bankruptcy, the scandal continued to follow him when he and other Sunbeam executives paid $15 million to settle a shareholder lawsuit . This lawsuit accused Dunlap and others of using the inflated stock prices to push company purchases of other organization such as Coleman. Later on, Dunlap also settled a civil suit from the Securities and Exchange Commission that accused him of several counts of accounting fraud . The outcome of this suit included a $500,000 fine and an agreement to be barred from serving as an officer or director of another company. Even though all these allegations were brought against Dunlap, he never admitted nor denied it. Unfortunately, he has now passed away and along with him, his truth and motive for practicing such unethical behavior.

Russel A Kersh

Both Dunlap and Kersh were alleged to be the main players in the fraudulent scheme to create the illusion of a successful restructuring of Sunbeam to `facilitate a sale of the company at an inflated price' . Since Dunlap placed Kersh into the role of CFO, it was no surprise that the illegal activity was prevalent between the two of them and even more so on their own agendas. After the suit, Kersh agreed to pay $250,000 to settle the shareholder suit and $200,000 to settle charges by the S.E.C. . According to a New York Times report from 2002, Kersh had agreed to testify at trial but did not agree to cooperate, and denied any wrong doings. As far as where Russell A. Kersh is now, not much can be found on the internet, but it is safe to assume that he is living his latter half of his life with the scandal still hanging over his head.

Arthur Anderson

Arthur Anderson was the accounting firm that Sunbeam hired to act as the lead auditor but unfortunately, aided the scheme by signing off on false financial statements. Due to Anderson’s failure to account for fraudulent accounting activities, they had to pay $110 million to settle a civil suit from investors at Sunbeam. Similarly, to the other key players, Anderson also denies any wrongdoing but claims it decided to settle for business reasons. Due to its involvement with Sunbeam, the notorious Enron case, and other company scandals, Arthur Anderson ended its role as auditor of public companies in 2002.

Robert J. Gluck, Lee Griffith, and Donald R. Uzzi

These three were the rest of the powerhouse executive team that Dunlap hired in order to turn Sunbeam around. It worked perfectly, as Sunbeam seemingly found the solution to its problems and Dunlap was able to hire the perfect team to commit the fraud that would make it seem that Sunbeam had turned around. Gluck, Griffith, and Uzzi all agreed to judgments laid out but similar to other counterparts, never admitted or denied the allegations made against them. Not much can be found on these three after the scandal at Sunbeam, but it is safe to say that they too are reaping the consequences of their actions.

Deidra DenDanto

DenDanto was one of the few key people mentioned who resisted against the unethical and fraudulent behaviors sprouting from other high-level executives during her time at Sunbeam. She even approached a top Sunbeam salesman that the company’s accounting treatment was not legitimate since the sales were not complete or substantially correct. Despite her efforts to unveil what was truly going on, she was ignored whenever she voiced her concerns about the questionable accounting at the company. DenDanto finally had enough and quit her job at Sunbeam but has now found success in other big name companies. Most notably, she is now the current senior manager at Deloitte but has experience at Robert Half and Ernst & Young.