One of the benefits of the forensic accounting program is the opportunity to listen to different speakers who have been exposed to fraudulent schemes or unethical situations. In my financial statement fraud class, Kevin Stoklasa from First Niagara spoke about his experiences at AIG Financial Products.
AIG Financial Products, a subsidiary of AIG, found itself in trouble in the early 2000s. Kevin was hired to help develop their accounting policy and to turn things around. He had prior experience working developing accounting policies at the Financial Accounting Standards Board.
Kevin immediately had trouble when he arrived at his job. His boss, Joe Cassano (CEO), didn’t like accountants and had been set on doing things his way for a long time. Plus he and many of the other employees made millions of dollars in bonuses. This top executive had a lot of influence over the employees and set the tone of the company.
The executives thought that Kevin would have the same way of thinking and allow them to continue. However, Kevin stood his ground and demanded the transactions be recorded correct. He often fought with the CEO who went against him on everything. The best piece of advice he gave us was to not give in to the pressure from executives when you know something is wrong.
No amount of money will ever be worth losing your family, your reputation, your friends and your life. Kevin never stayed at AIG Financial Products and got out when he could. It was a great lesson on how corporate culture and tone at the top can influence employees and bring a company down. AIG eventually collapsed as a result of the unethical decisions at AIG financial products.