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Technology entrepreneur Ben Horowitz is the founder and CEO of Opswae, a data center automation software provider. One day, his Chief Financial Officer ( CFO
Technology entrepreneur Ben Horowitz is the founder and CEO of Opswae, a data center automation software provider. One day, his Chief Financial Officer CFO goes to him with an idea. She recommends that the company adopt a policy for granting stock options that was used by her previous employer, an enterprise software company. It involved setting the option prices according to the lowest level the companys stock had hit during the month, effectively increasing the stocks current value with the stroke of a pen. The CFO assured Horowitz that each of the BigFour accounting firms had approved the stock lowballing policy. Horowitz thought this plan sounded great. It meant better incentives for employees at no additional cost or risk. But a little voice in Horowitzs head said that the CFOs plan sounded too good to be true. So he asked a friend, who was an attorney, to review the idea. His friend had hippie sensibilities and operated outside the Silicon Valley bubble. He was nearly allergic to corporate politics, showmanship, or behaviors that covered the truth. The outside attorney told Horowitz that the backdating scheme was unethical and likely illegal. Hearing this, Horowitz rejected the CFOs idea. A few years later, the Securities Exchange Commission began an enforcement action against the CFO and her previous employer Mercury Interactive for the backdating scheme. Horowitz forced the CFO to leave Opsware, and the CFO eventually served over three months in a federal prison for committing fraud via the backdating scheme. Which principle in the Ethics Quick Test saved Horowitz from a criminal conviction and prison time?
Group of answer choices
Test of ventilation.
The gag test.
Test of common sense.
Test of the purified idea.
Test of the big four.
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