Prepare a case study analysis on Case 13: “Lennar Corporation’s Joint Venture Investments,” found in the Cases section of your digital textbook.

While the company has to deal with the damage caused by the Fraud Discovery Institute’s claims, they also have some other issues:

          The financial crisis

Mortgage defaults

Dramatic fall in house prices, particularly in some of their active markets.

Additional background:

The Fraud Discovery Institute was founded by Barry Minkow, who was a convicted felon who found religion while in prison and became a pastor. He used his church’s resources to start the Fraud Discovery Institute. Since that time he has admitted to fraud in the Lennar situation and sentenced to prison. He has also been sentenced to prison for 5 years for embezzling from the church where he was the pastor. Who do you think is right in this case, Barry Minkow (He admitted to fraud and is now a three times convicted felon.) or the Lennar Corporation?

If you only addressed the claims of the Fraud Discovery Institute (Barry Minkow) and thought that the issue was fraud on the part of Lennar, you may want to revise your analysis.

Put yourself in the position of the CEO who is having to deal with the claim from Barry Minkow, who it turns out profited from the drop in price of the Lennar stock (SHORT SELLING). The CEO also has the other issues? What are your recommendations for actions on the part of Lennar? "In finance, short selling (also known as shorting or going short) is the practice of selling securities or other financial instruments that are not currently owned, and subsequently repurchasing them ("covering"). In the event of an interim price decline, the short seller will profit, since the cost of (re)purchase will be less than the proceeds which were received upon the initial (short) sale." (Explanation from

https://en.wikipedia.org/wiki/Short_(finance)

https://en.wikipedia.org/wiki/Short_(finance)

https://en.wikipedia.org/wiki/Short_(finance)