A Trusted Employee of Outback Tours Was Caught in the Act

Essay

A trusted employee of Outback Tours was caught in the act of embezzling funds. He confessed to earlier embezzlements but retracted the confession on the advice of his attorney. Over the course of the most recent quarter it has been determined that $20000 was embezzled.
Outback Tours has suffered adverse publicity in the recent past because of serious injury to five tourists that occurred during a two week "Winter Wilds Adventure" tour. The company has therefore decided to avoid publicity and has agreed to drop all charges against the embezzling employee. In return the employee has agreed to a notation of "Terminated-Not to be Rehired" to be appended to his personnel file.
Required:
1. Who are the stakeholders in the decision not to prosecute?
2. Was it ethical for the company to decide not to prosecute? Explain.