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NSU Professor Publishes Article in Business and Professional Ethics Journal

Randi L. Sims, Ph.D., professor of management at the H. Wayne Huizenga School of Business and Entrepreneurship, recently published an article entitled, “Antecedents and Consequences of Collective Fraud: A Study of the United States Residential Real Estate Market Boom and Bust” which appeared in the Fall 2013 issue of Business and Professional Ethics Journal.

The paper examined the collective fraudulent behaviors that took  place during the residential real estate bubble in the United States from 2002 to 2006 and the influence of others’ choices on decision making leading to a herd mentality. While the underlying causes of human herding behavior may not be fully explained, the behavior patterns have been clearly established throughout recorded human history. Instead of making rational choices based on correct information, individuals often just do what everyone else is doing. The antecedents of collective fraud were discussed in terms of the sociological theory behind human herding and the fraudulent behaviors during the real estate bubble were examined. The findings are largely based on a qualitative analysis of US government archives summarizing millions of pages of subpoenaed organizational documents and audio, video, and written transcripts of witness testimony given by corporate executives with relevant first-hand experiences. This paper argued that without widespread collective fraud, the bubble may not have developed and the herd mentality may have dissipated without the consequences of financial disaster. Additionally, Sims’ paper fills a gap in the literature by exploring the sociological influences of human herding on collective fraud. The aim of an analysis of this nature is to offer a plausible explanation of some of the preconditions to the event under study.