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Lee and Li, attorneys-at-law and the embezzlement of NT $ 3 billion by Eddie Liu



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    Lee and Li, attorneys-at-law and the embezzlement of NT $ 3 billion by Eddie Liu

    I.              Main problem:

    The main problem here is an ethic dilemma where Lee and Li need to develop an action plan to minimize the impact of the embezzlement caused to SanDisk by one of their assistants named Eddie Liu, who was in charge of investments, mergers and acquisitions. It is vital for the company to keep almost intact the reputation gained from years of hard work and to deter clients from leaving the company.

    II.            Possible solutions:

    1)    The first proposed solution is to pay back SanDisk the $ 92 M involved in this embezzlement. It is possible that the company could face three different options:

    a.    Pay immediately with own funds, if available.

                                                              i.    Company funds

                                                            ii.    Partners funds (they share unlimited liability)

    b.    Get a loan from a bank to pay the debt in full.

    c.    Make long-term payment arrangements with SanDisk in case funds cannot be made available.

    2)    The second solution proposed is to talk with SanDisk management, and propose for them to share the responsibility and split/share the embezzled amount of $ 92 M in half. Since this problem was caused by lack of control from both sides, writing a clause in the contract where Lee and Li’s representative could talk to the brokerage house on behalf of SanDisk, which is very unusual. This clause should have been deleted and neither of the lawyers on both sides detected this error.

    3)    Do nothing and just wait for the consequences of the embezzlement. Probably Eddie Liu can be prosecuted, and part of the embezzled amount be recovered. This would considerably reduce the amount to be paid to SanDisk. The risk is that this option probably will take time and a potential massive customer defection could happen and company reputation will be fractured.

    III.           Which is the best solution and why?

    I consider that the first option is the best for many reasons. The first one is that this option demonstrates very clear that Lee and Li are committed to solve the problem caused by one of their assistants. The second reason is that this option will reduce dramatically the time this embezzlement will be unsolved. This option too will demonstrate the rest of the clients the ethic of the company.

    IV.          How we will implement the changes?:

    The changes have to be implemented and monitored all the time for the customer’s response to every action the company does. First, Lee and Li need to check funds availability. If unavailable, go to the bank to get a loan. After that, call SanDisk top management, and inform them of the situation, showing them the action plan to be executed. Sign with them, if possible, a confidentiality agreement, so this problem is kept in house. This is to avoid the usual “snow ball” in cases like this. Inform the police and Interpol about the embezzlement. The intention is to capture Eddie Liu and evaluate the possibility to recuperate some/part of the $ 92 M to reduce the monetary/financial impact on Lee and Li. That way financial pressure would be reduced and workers (lawyers) will keep their jobs. A special commission has to be created to monitor and evaluate customer’s relationships. Another department needs to be created to revise all contracts and eliminate similar problems in the future. Some type of advertizing can be considered, if necessary.

    V.           How we will measure the outcome?:

    The main outcome would be the customer loss rate. Lee and Li have more than 12,000 customers, including big international corporations. Street comments, news and other media need to be monitored closely to react immediately if the problem is ventilated in public. It is necessary to immediately stop this type of problem.

    VI.          What if it doesn’t work?:

    If for any reason Lee and Li cannot get the necessary funds to pay in full the debt to SanDisk, or if they see this payment will destroy financially the company completely, they should explore the option # 2 and try to split responsibilities with SanDisk. That way the amount of money involved would be half of the total, but probably the case will be known publicly causing some customers desertion. Probably it is a good time to re-size the company according to the new situation.

    Lee and Li, attorneys-at-law and the embezzlement of NT $ 3 billion by Eddie Liu. (2016, Dec 24). Retrieved from

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