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Econ 050

Apr 5, 2019

Imagine you’re on the banks of a river, watching the white water rapids rage past you. You’re surrounded by a group of your closest friends who booked a rafting trip, but you’re scared. You are deathly afraid that the raft will tip over, and you’ve heard horror stories about people drowning in these waters. In theory, you could still refuse to get into the raft, but everyone else is getting in, and you don’t want to disappoint your friends. So, you get in. The raft starts moving along and gradually gains speed. The waters aren’t too wild yet, so you could still get out at this point, but it’s already a dangerous situation. You keep going and going, faster and faster, and then, the raft flips. This is how assistant professor Kristina Linke describes the process of how corporate executives find themselves gradually but inevitably crossing ethical lines professionally. In principle, they can see the danger coming from a mile away, but in practice, it can be just as scary to try and get out before certain disaster strikes. We sat down with assistant professor Linke to hear about just how easy – and common – it is for corporate staff to slide into financial fraud.