Equity Funding
Encyclopedia
Equity Funding Corporation of America was a Los Angeles
-based U.S. financial conglomerate
that marketed a package of mutual funds and life insurance
to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after ex-employee Ronald Secrist and securities analyst Ray Dirks blew the whistle on massive accounting fraud
, including a computer system dedicated exclusively to creating and maintaining fictitious insurance policies. Investigation found that from 1964 onward, as many as 100 company employees had engaged in organized deception of investors, auditors, reinsurers
and regulatory authorities.
An important sidelight was the filing of insider trading
charges against whistleblower
Dirks. The ensuing case of Raymond L. Dirks v. Securities and Exchange Commission went all the way to the U.S. Supreme Court where Dirks was finally acquitted. The case has been termed historic in helping to define insider trading, as well as the treatment of whistleblowers, analysts and the press.
in the role of the actuary
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
-based U.S. financial conglomerate
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...
that marketed a package of mutual funds and life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after ex-employee Ronald Secrist and securities analyst Ray Dirks blew the whistle on massive accounting fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, including a computer system dedicated exclusively to creating and maintaining fictitious insurance policies. Investigation found that from 1964 onward, as many as 100 company employees had engaged in organized deception of investors, auditors, reinsurers
Reinsurance
Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
and regulatory authorities.
An important sidelight was the filing of insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
charges against whistleblower
Whistleblower
A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department, a public or private organization, or a company...
Dirks. The ensuing case of Raymond L. Dirks v. Securities and Exchange Commission went all the way to the U.S. Supreme Court where Dirks was finally acquitted. The case has been termed historic in helping to define insider trading, as well as the treatment of whistleblowers, analysts and the press.
External links
— the Equity Funding scandal retold in the form of a movie starring James WoodsJames Woods
James Howard Woods is an American film, stage and television actor. Woods is known for starring in critically acclaimed films such as Once Upon a Time in America, Salvador, Nixon, Ghosts of Mississippi, Casino, and in the television legal drama Shark. He has won three Emmy Awards, and has gained...
in the role of the actuary