Adelphia is one of the most widespread cases concerning a public company. From 1998 through March 2002, Adelphia, the nation's sixth largest cable-television company, systematically and fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates. It also inflated earnings to meet Wall Street's expectations, falsified operations statistics, and concealed blatant self-dealing by the family that founded and controlled Adelphia, the Rigas Family. Six senior Adelphia officials orchestrated this widespread and multifaceted scheme: J. Rigas, Adelphia's founder, Chief Executive Officer, and Chairman; T. Rigas, J. Rigas' son and Adelphia's Chief Financial Officer, Chief Accounting Officer, Treasurer and a Director; M. Rigas, J. Rigas' son, Adelphia's Executive Vice President for Operations and Secretary; J. P. Rigas, J. Rigas' son, and Adelphia's then Executive Vice President for Strategic Planning and a Director; Brown, Adelphia's then Vice President of Finance; and Mulcahey, a Vice President of Adelphia as well as its then Assistant Treasurer.
Their fraud composed of three major actions. The first action happened during 1999 throughout 2001. Adelphia had been illegally excluding the Company's annual and quarterly consolidated financial statements, over $2.3 billion in its bank debt, by recording the liabilities in the books of unconsolidated affiliates. By doing so, Adelphia violated the Generally Accepted Accounting Principles and misled the public. Also, during these years they created fake transactions and fake documents to make it look as if they were repaying previous debts but instead were shifting the money to Rigas owned entities.
Throughout the same period Adelphia and its Defendants consistently made false statements during press releases about their earnings reports. For this particular company, Wall Street uses three basic principles that are crucial to the evaluation of the company.