Livent, once the world’s premier live entertainment companies, was sold in 1998 to buyers who soon found that the value they had paid for was an illusion. Livent had thrilled audiences with performances of Phantom of the Opera, Ragtime, Kiss of the Spider Woman, Sunset Boulevard, Showboat, Joseph and the Technicolor Dreamcoat, Fosse, Candide, and Barrymore. Needless to say, Garth Drabinsky and Myron Gottlieb, the creators of Livent, were suspected of fraud, but justice was slow in coming in Canada. Whereas the U.S. Securities and Exchange Commission pursued fraud charges in 1999,1 it was not until May 2008, over ten years after their alleged manipulation of earnings, that Drabinsky and Gottlieb finally went on trial in Toronto for two counts of fraud and one of forgery. The manipulations occurred from 1993 to 1998 and were reported to be significant.

For example, according to the testimony of Gordon Eckstein, Livent’s senior vice president of finance, an internal document showed a loss of \($41\) million for the third quarter of 1997 that was reported publicly as a \($13.4\) million profit after adjustments were made by accounting staff.2 Eckstein also reported, “Just before Livent was sold, its managers wrote down the value of its assets to ‘clean up the books’ and declared a loss of \($44\) million for 1997."........

Questions:-

1. Did Maria blow the whistle at the right time? Why or why not?
2. Was her planned response appropriate?
Why or why not?
3. How would you suggest she should have dealt with the problem?
4. Should whistleblowing be encouraged?
Why or why not?