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SEC Settles Microsoft Accounting Investigation
guttentag writes "The Securities and Exchange Commission has wrapped up its two-year investigation into Microsoft's accounting practices. The investigation focused on "cookie jar" accounting practices in which a company reports that it earned less money than it actually did, secretly storing the unreported money to artificially boost earnings in the future. The SEC called off its investigation in exchange for Microsoft's promise that it will not break the rules in the future, though the company is not admitting that it broke rules in the past. Microsoft publicly states that it has $40 Billion on hand." Gates realized a long time ago that regardless of actual performance, if you "beat estimates" people will buy your stock. So, he's arranging it so that no matter what the actual performance is, Microsoft always "beats estimates". If your analyst estimate is low 61 out of 63 times, either A) you need a new analyst or B) someone is feeding the analyst bad numbers. In this case, probably both.
The only time a company has to make its numbers known publicly is in its quarterly reports to the SEC. Any whisper numbers that are passed around by analysts are simply that - whispers.
And you really answered your own question. Why does an analyst guess wrong 61 out of 63 times (in favor of better stock performance)? Because they can make more money that way.
There is something rotten, but it isn't in Redmond. The stench is coming from Wall Street.
I have been pwned because my
I'm highly preturbed! It must be an accounting glitch, nothing more.
We all know that a company such as Microsoft with its high upstanding ethical and moral values would never do anything to mislead the common investor.
Microsoft stock is worth less than 50% of its value about 2 years ago so it doesn't seem to be working anyway.
Anyone who uses an analyst's recommendations as anything other than a source of humor needs to seriously reconsider their actions. Here's another great example of how "accurate" analysts are. Merrill Lynch is one of the worst.
Just my $0.02.
Remember what Microsoft has been saying all this time regarding software piracy? Since we're talking copies they never made being sold for money they never got, along with losses they've claimed where none physically existed (If you make one million copies of software that sells out, and someone makes one million copies of their own to give away, then they haven't technically lost any money, as they never made that additional one million copies to begin with), I would have to definately say they were using the cookie jar tactic here as well...
Just because you can mod me down, doesn't mean you're right. Shoes for industry!
The real bad guys here are probably the auditors, since they are supposed to find stuff like this and make sure it doesn't happen. People in the know are aware that audited financial statements are just bullshit backed up by a promise that means just about nothing. There is still good info in there, you just need to really read between the lines and pay attention to what the company does not have on the balance sheet.
"It's not a war on drugs, it's a war on personal freedom. Keep that in mind at all times." Bill Hicks
With so much product theft how can they make profits?
:)
"Evaluation = Evolution"
"The SEC called off its investigation in exchange for Microsoft's promise that it will not break the rules in the future,"
Compare: Ok, Mr Dalhmer, we'll not look into the funny smell if you promise not to kill and eat anymore people, while keeping other parts of them for sexual "funning."
See, in the country I live in, we usually prosecute entities (people, companies) when they break the law. We don't just say, "well, don't do it again."
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
Most corporations usually don't have the luxury of beating estimates with large unreported cash reserves. In a twisted way this showcases the strength of Microsoft's business model giving them the ability to ride out the hard times. If I was a shareholder, I would approve so therefore Microsoft is doing what any good corporation should do, increase shareholder value. Obviously the risks of legal action do not outweigh the benefits for the company so in a sense this is just a good business strategy.
A promise? I'm not statisfied with that. I hope they made microsoft pinky swear they wouldn't do it in the future. Or at least say their mom will step on a crack and break her back.
In fact the $40 billion in cash puts a floor on how low the stock can go, since the stock shouldn't drop much below the breakup value of the company (what you would get if you bought the whole company, sold off the buildings, etc and took the $40 billion for yourself). Of course with a market cap of $275 billion the breakup value is a long way down.
- adam
If Microsoft stock starts to go down, and people panic and sell their stock, that $40 billion evaporates. As that $40 billion disappears, their stock will drop even faster, and more people will sell.
You do not understand how stocks work. The 40 billion really is there and has nothing to do with the stock. Stock prices can drop to zero, but that forty-bill will still be there.
If people panic then they will sell stocks to each other. Microsoft is under absolutely NO obligation to buy those stocks. If it (microsoft) wants to buy the stocks then it will make a public announcement of a buyback.
The $40B in the bank is NOT owned by the shareholders. Period. It IS owned by Microsoft, a government recognized entity.
Your argument is that since Microsoft is public, the shareholders "own" whatever Microsoft owns ... this is fallacious reasoning, since if YOU owned ... let's say $89 worth of Microsoft, you don't get a copy of Windows for free, in exchange for your shares.
What is owned by Microsoft, cannot ever, be "magically transferred" to the shareholders, just by holding stock.
Now ... lets say that Microsoft decides to throw in the towel, and close operations. The stocks would plummet, and the assets would be sold off to cover the debt. ASSUMING that there was money left over, the rest THEN would go to the shareholders, based on the amount of you have/total shares ...
Usually companies in Microsofts position pay dividends, Microsoft decided not to ... it has that right, and keep the $40B in the bank for a "rainy day" ...
BTW, the $40B doesn't "evaporate" if MS's stock goes down ... ever ... since its shielded from the stock market in banks. Kind of like money laundering. :)
Karma? Karma? I don't need no stinkin' karma.
Nothing new here, just another case of Microsoft doing something wrong and the resolution to the problem is that nothing happens to them. And when they get caught doing it again, nothing will happen then either. Funny it doesn't work that way if I get caught.
I'm an American. I love this country and the freedoms that we used to have.
Can I lie to my bank or the taxman and pay no penalty if I promise (when caught) not to do it again in future? Pleeeeeeeeease???? Just this once!!!!!!
Life must be sweet.
-b
Listen, M$ is in *NO* way like Enron. It's amazing how you zealots place blame. Enron was involved in price fixing and an artificial energy crisis. If I even hear someone say "That's just like MS," then you're too young to remember when an OS used to cost $300. Most people don't even "pay" for Windows.
.COM bust of the past few years, M$ is a blue-chip stock. Forget OSS, forget all M$'s shit... If you were sending you kids to college on their stock, you'd be a happy person...
I'm not here to argue the merits of M$ software, but I am here to point out that they *DO* create shareholder value, and as a company they perform very admirably. Compared to the stock market and the inflated
Let's put things in perspective here folks..
1) There's nothing wrong with a consistently conservative estimate.
2) If you underreport earnings you are actually undervalued. You may iron out the noise but you have sandbagged real money on the books for a quarter.
Yeah, nothing quite like it.
I have been pwned because my
He, and others, are simply hacking the economic structure. They insert an extra NOP to better the timing, they tweak their routines. Is it any surprise? Finance is a game, with a huge set of rules, and a very bugger compiler (see if you get my anology). They are not being evil, they are playing the game. As others have pointed out, this is no fault of Microsoft that they are good at it.
Somebody from the SEC ought to have asked the people who got the consent decree out of Microsoft in its first antitrust case just how reliable Microsoft is at keeping its promises. Expect another SEC investigation in a couple of years or so.
Be who you are...and be it in style!
Easy, they noticed the report was written by Arthur Andersons. Though yeah, you do have to wonder how they got caught given how big their accounting division must be. You'd think they could pull something like this off.
See http://slashdot.org/comments.pl?sid=33571&cid=3629 298 , to see the point of the post, because some people are too godd@mned stupid to use their moderation scores properly...
Just because you can mod me down, doesn't mean you're right. Shoes for industry!
For the love of god, the term is "Zero Sum Game", not gain. It comes from a section of maths known as game theory, go look it up if want more info.
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Simon
Sorry, but what the fuck? They're "agreeing" to what exactly? To obey the law? To continue doing exactly what they're doing right now (whatever that is)? What kind of "agreement" is this?
Quo custodiet ipsos custodes? I'd be very interested in knowing how many of the SEC people involved in this "investigation" have suddenly found themselves able to pay off their mortgages, or fund their kids through college. And no, I am not joking. When you're dealing with a company with $40 billion in the bank and bad accounting practices, squirreling a couple of million in a slush fund is trivial. I mean, how many people at Microsoft actually believe that they know exactly how much money Microsoft has - and how many different figures would you get if you asked all of these "authoratative" figures?
This "nothing to see here, move along" investigation is a farce. They are either innocent, in which case there's no "agreement", or they are guilty, in which case they should get reamed. This stinks.
If you were blocking sigs, you wouldn't have to read this.
let's say $89 worth of Microsoft, you don't get a copy of Windows for free, in exchange for your shares.
Sure you could. Provided that Microsoft had some mechanism to accept stock as payment for goods. Since they probably don't, most people just sell the stock and use cash.
It IS owned by Microsoft, a government recognized entity.
Which has issued n shares of stock representing ownership of the company, which are in turn owned by shareholders.
The shareholders *own* EVERYTHING. They own the money, the buildings, the IP, the trademarks, the source code, the chairs and the coffee maker.
The reason Microsoft doesn't pay dividends is because the directors haven't approved them, and the directors are elected by the shareholders. If the shareholders (of voting stock) decide they want dividends, then they shall have dividends. If the shareholders decided they wanted that $40 billion to form a picture of a GPF dialog on the floor of the Superdome, the trucks would leave Redmond the next day.
In any corporation, public or private, everything that happens is at the pleasure of the shareholders of voting stock. If one owns a majority of the voting shares, they run the company. Simple as that.
The settlement does not involve any fine, with Microsoft agreeing to accept a cease and desist order.
This means it will not engage in unspecified accounting practices that the SEC had been investigating. The agreement does not involve an admission of wrongdoing by Microsoft.
Microsoft has repeatedly settled with the DoJ by agreeing to cease and desist it's anticompetitive practices, and subsequently continued to engage in the exact practices identified in past trials. Is the SEC stupid or corrupt?
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Comment removed based on user account deletion
I have no sig, does anyone have one to spare?
I think this is the key statement in the story post. There is corruption EVERYWHERE in the finance industry. This includes the government, corporate management bodies, and the people (both in the media and the private finance industry) that make money off of reporting on companies and the government.
Enron is by far not the only company with a corrupt management that artificially inflated their numbers throughout the late '90s and early 2000's. It just happens to be the first company to get caught by the national media red-handed. Nearly every failed dot-com with a successful IPO did the same things Enron did, such as under-reporting liabilities by giving much of their compensation in stock options and B.S.-ing about projected billions of future revenues from customers that would never exist. Other more traditional companies like Xerox and Polaroid have also been caught doing the same sort book-cooking. If it had turned out that Microsoft was not engaging in such accounting tricks, Microsoft's board would clearly be in the small minority of the Fortune 500 in that regard.
The government, both under the Clinton and Bush administrations, did virtually nothing to reform regulations that were being exploited legally but unethically by corporations around the U.S. and also virtually nothing to punish those executives engaging in insider trading and other practices that have been illegal for decades. Had the government stepped in and set some reasonable rules, the boom of the late 90's would have been much more reasonable in scope (Dow 11K and Nasdaq 5K would never have happened, but the gains in stock prices would have still been substantial and, most importantly, justified) and we'd still be in very good economic situation now. Unfortunately, the watchdogs were either sleeping or put to bed (by some well-placed "bones" if you get my drift), and did not attack the biggest ripoffs since the late 1920's that the U.S. stock market has seen.
And the media and the analysts glorified everything that was going on. Back in 1998 and 1999, I was shocked at how many companies' stocks had been given "strong buy" upgrades AFTER A RISE of 20, 30, even 50 percent in the previous month or two. WTF? Any person with a modicum of experience in the market would take such a dramatic increase as an opportunity to cash in a portion of his/her holding in that stock for short-term gain or to stand pat if the holding was for a long term investment. To do as these analysts were suggesting would be essentially refusing to pay $10 for something because it's overpriced, but to buy two of that thing when its manufacture raises the prices to $20. In fact, it has been alleged that some analysts were in fact trading against their recommendations, upgrading stocks that they wanted to take profits on and downgrading stocks that they themselves had wished to accumulate.
As the saying goes, "you can fool all of the people some of the time, some of the people all of the time, but not all of the people all of the time." The "some" time in the first part of that statement began to end in the spring of 2000, and many more woke up following the Enron debacle. Only now are we beginning to understand how broken the regulatory structure necessary for a successful, mostly capitalist (but obviously not pure capitalism) was in the U.S. in the 1990's. Just like it wasn't until after 1900 Americans didn't understand why having an economy dominated by a few "Robber Barons" was bad, or not until the 1930's was it known why having a market based on uninsured banks and buying stocks on margin was bad. Many of the flaws in the U.S. financial system WILL be fixed. At some point, the American people will not accept anything but a good-faith effort to correct these problems. At first, the existing government will be given a year or two to make the required changes. After that, people will begin to demand a "New Deal" and clean house on Capitol Hill. If things don't change significantly by early 2004, the voters will bust out the brooms in November of that year.
However, it is likely that we will endure another period of economic ugliness like we did in the 70s before things brighten signficantly. It took nine years (1973-82) for the U.S. to determine a successful course of action after the end of the Vietnam War required the nation to turn away from a largely military-industrial economy to one better suited for a peacetime environment. My guess is that it will take until at least 2006 or 2007 for the U.S. economy to rationally handle the changes effected by the so-called Information Revolution and prosper again. Things won't be horrible between now and then (barring any further Sept. 11-scale or greater terrorist attacks), but they probably won't be peachy either.
People have rightly questioned the integrity of the entire financial system and are waiting for things to improve before increasing their commitments to it. As a matter of fact, the U.S. is the last major market in the world that has been challenged by investors: while Japan, Europe, and later Latin American and southeast Asia floundered, people flocked to the U.S. believing that our system was infallible. It was not, and never will be infallible, though it has been and will become much more sound than it is today. As the next couple of years unfold, people will gradually learn what the biggest reasons for the unsustainable bubble and subsequent bust were and proceed to try to correct them. After that, people will begin to regain faith in the market, they will begin to realize that current valuations of stocks are by-and-large reasonable again, and the U.S. economy will begin to poke its head out of the clouds.
The stench of corruption right now is everywhere. We're just going to have to give ourselves a while for it to subside.
The MSFT puts are neither of those things as you would know had you read their annual report. Stock splits have no effect on options, most employee stock plans eork from stock issued for that purpose.
The real purpose of the MSFT puts was as a means of fulfilling their promise to buy back MSFT shares. The way that MSFT did this was to sell in-the money puts for the shares in question. This is a highly efficient method of buying back company stock as it means that the purchase price of the stock is discounted by the option price.
This is the method used by almost all the companies that have done stock buy backs. The only time when it is a really bad idea is when a company is buying back stock using capital rather than income. RSA made a major blunder when it decided to use half its reserves to buy back stock at what turned out to be the peak of the market. Investment bankers tend not to like companies accumulating money, especially if there is a financial bubble, they would like to be the only ones left with cash at the trough so they can buy back stuff for cheap.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/
If one owns a majority of the voting shares, they run the company. Simple as that.
Well, not quite that simple; they have to run the company in a way that's at least arguably to the equal benefit of all shareholders.
You can't buy 55% of a company and then sell all of its assets to yourself for $1; that would be fraud, as well as probably breaking a bunch of other laws I don't know about. (And probably wouldn't be profitable anyway, but there are exceptions where it would be.)
Good points, but:
... it has that right, and keep the $40B in the bank for a "rainy day" ...
Usually companies in Microsofts position pay dividends, Microsoft decided not to
Actually, there is an obscure law that says corporations which have liquid assests above and beyond what they might reasonably need for business purposes must return them to the shareholders as dividends.
This law is regularly ignored; Ralph Nader was complaining about MS and this recently, but so far as I know nothing has come of that.
Why are you blaming Bush for this? This is nothing new! This type of thing happened under Clinton, Reagan, Carter, the other Bush, etc. I remember H&R Block doing this almost 15 years ago.
Karma: Professionally Doomed (mostly affected by inability to keep opinions to self)
Heh. Just thourght it was a good time to bring up good old Bill Parish who spend some time a couple of years ago looking into MS accounting pratices and claimed they don't really make money at all... Haven't been updated since November 1999 tho.
http://www.billparish.com/msftfraudfacts.html
See, in the country I live in [www.gc.ca], we usually prosecute entities (people, companies) when they break the law. We don't just say, "well, don't do it again."
So do we. The thing is, Microsoft didn't break any laws here. But they may have broken some regulations enforced by the SEC.
"And like that
Windows 2000 Professional is going for $271.88 at the first reseller I looked up.
That's close enough to $300.00 that the other guy is basically right.
Small wonder gcc's such a pain in the arse.
Eloi are stupid, throw morlocks at them!
Another popular one is a boss ordering a $100 product from India and paying $10,000 for it. The supplier gives his client the product PLUS $9,900 as a present to his own personal account in Cayman islands or whatever. If the Indian IRS tries to investigate, in that part of the world you just give the tax inspector $100 and he'll say, "Nothing to see here, move along now". As IRS controls become tightened, we're going to see more corruption to get around it, Bill Gates meeting the CEO of Sun in dark alleys, whilst a Bill Gates lookalike is at a product launch on TV or something, so that's Billy's alibi.
People won't try to fix the US banking system after Enron, they'll just blow hot air until everybody's forgotten about it just like BCCI... Ooooooh, jogged some memories did I? Forgotten about that hadn't you? The collapse of BCCI was supposed to trigger this big change, destroy corruption and make everything transparent, but it didn't - why exactly?
Read my lips - the banking system changes for nobody, you might get some token changes because the banks want to look liek they're doing something. After WTC everyone's gonna cut the banks some slack and they'll have us by the balls again after Enron blows over.
Nope. In the war against terrorism, everybody's supporting the President, nobody will care about Enron in a few months.A caveman dreams of being us, the incalculable power and riches. We dream of being Q, then what?
This may just be me but something isn't right here:
Last week the wall street journal quoted a source at the SEC as saying that MS would face charges for misrepresenting its revenues.
Now the matter is settled in return for "A promise not to do it again" essentially the same terms that the Antitrust case was settled on.
If I didn't know better I'd think somebody in the higher levels of governement was pulling some strings here. (sarcasm mode off)
Try this instead:
http://finance.yahoo.com/q?d=c IOW hard goods, and I picked 'em cuz they were the first such company that came into my head)
~REZ~ #43301. Who'd fake being me anyway?
It's a simple question that really has a simple yes or no answer. Anything else is just an deceptive excuse.
There are two categories of items in your list of evidences and organizations. Government institutions or policies to enforce a managed economy, and government itself.
SEC, FRB, farm subsidies, etc, are examples of a managed economy. In a free market the government has no role except to provide a uniform system of law. In a managed economy government attempts to use what would otherwise be a free market economy to mold and implement policy. Farm subsidies are one classic example. The government policy is that milk should have a particular price. Farm subsidies guarantee that price by paying farmers to produce more milk when the market price indicates that they should be producing less. Then when the farmers produce too much milk the government pays them to dump it down the drain.
Your other category is the government itself (congress, CIA, military). I'm not really sure what you're getting at. Are you trying to tell me that government itself was instituted to deal with free markets? How ludicrous! Certainly some policies of government have been implemented in an attempt to "fix" the market, but that's not the purpose of government.
Let's look at the military. The purpose of the military is to conduct war. Some wars have religious causes, but most are political (too many landless knights so let's start a crusade and ship them all off). But I no of no war that was started because both sides had free market economies. Not one. Wars between nations occur because one nations wants to plunder or punish another nation.
A Government Is a Body of People, Usually Notably Ungoverned
I think is an incredibly insightful comment, and I encourage you to follow up on it more.
For my part I see a couple deep problems here:
The market is meta-capitalism - that is, it's not making money through doing anything, it's more or less making money through a loan. Risky loans, as they involve to trying to put a dollar value on a very complex operation (a sizable business) involving personal and economic dynamics of negotations between entities. One don't have any problem with the captains of Solomon Bros, etc losing their silk shirts, but I don't think people really understand the risk - particularly not working-class 401k contributors who are led into bad loans by well-connected shysters (Enron), or people who invest in mutual funds who rely on shyster analysts.
Another problem is:
Making money for money's sake is fundamentally incompatible with another function of the economy, which is to deliver services to people (I'd rather not use the word consumer, because I think it doesn't leave room for economic transactions that improve quality of life - e.g. working on your neighborhood' park cleanup effort, or working on another neighboorhood's park cleanup effort). Is there any way to reestablish the ethic of doing work for its own sake?
Another thing y'all may be able to fill in is a comment a friend made to me. He said:
The market is really driven by the big investment houses: Solomon Bros, JP Morgan Chase, Morgan Stanley, etc. Index prices mostly react to the movements of huge amounts of money in these kinds of institutional transactions. Do you think this is true?
To me it reflects on a situation I think is unfortunate: the government is current afraid to assert its authority over big business because big business basically threatens to put a lot of people out of work (political death) if they don't get what they want.
The slashdot blurb focuses on Microsoft's delaying earnings to smooth out earnings reports and make sure they keep better expectations. Here is an article that explores the hypothesis that Microsoft is hiding earnings because as a monopoly they want to control the impression of success. "Well, when you're a
monopoly, churning out what some anti-capitalists believe are obscene
earnings year after year, you just might find it in your best
interests to hold back a bit, this analyst says." I think that this hypothesis is more severe than the smoothing hypothesis. Smoothing earnings is somwhat benign, your just covering up volatility. Hiding earnings over the long term to descrease the bad taste of being a monopoly is more corrupting.
That's an odd question, because there are many reasons why people do work, but whether any of these are "work for it's own sake" is open to debate. For example, if a person builds model ships because he enjoys doing it, that might be "work for its own sake," depending on your definition. A significant amount of free software is developed under this ethic. There is an important point, though, I'm not going to build my model ships and give them away to people who want them unless those people are my friends (or maybe occaisionally on a whim). If I were to start a small business where I made such ships and sold them at a small profit, it would likely be more hassle than it is worth. So, I might make a ship to give to my cousin's son, but I wouldn't give it to you, and I also won't sell it to you. (Like I said, the minute it becomes the hassle of running a business, hiring accountants , complying with regulations, it stops being fun.)
I don't really consider altruism as "work for it's own sake," but perhaps this is what you meant. I might do altruistic work for people I know, or for the local Buddhist Temple where the monks are always nice to me, but I won't do it for people I don't like. The trouble with this is that people usually don't agree on valid reasons for disliking people. Honestly, altruism works better in tightly knit societies. It's doomed to failure as a way of getting things done in diverse societies. (People might also do work for religious reasons, such as to make merit to do "well" in their next life. However, if you do altruism to gain "treasure in heaven," then isn't that a kind of selfishness? There is a "gain" involved.)
Now, you might also mean taking pride in the work you do, even if it is for a profit. That's another matter altogether. For example, I think the thing that makes people sick about doing work for money is that so many people act like it is more valid to scam someone, and do crummy substandard work and get paid through the roof for it than it is to do good, productive work and make money on that. What do you expect? If you scam people, you do better than if you are honest. You won't pay as much in taxes if you are a huckster than if you are an honest man, you won't have to comply with as many government regulations, and you won't have any politicians in your back pocket who can regulate the economy such that you become a monopoly or part of a cartel while your competitors who won't or can't afford to play ball are crushed underfoot. I've watched crummy, corrupt businesses crush decent businesses (Bleem!) under foot using the courts. I've watched the media cartels pay the government to try to force computer manufacturers to sell screwed up, crummy, substandard computers and the issue is being sold as an aid to help consumers get broadband.
So I don't have any confidence in government fixing these types of problems. How can the government which brings us the DMCA bring us regulation to end corruption in finance?
All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
we crucified enron but we're letting microsoft go?!
W T F?!
they're a known criminal who uses underhanded business tactics.
I'm a bit out of the loop, but with wallstreet looking into everyone who looks fishy, shouldn't microsoft be on top of the heap?
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Close but no cigar. It is a tax law. It is a tax on accumulated profits which are profits that are accumulated in excess of the reasonable needs of the business. This law is on the books to keep (generally)private companies from accumulating profits for the owners so they can sell the stock and pay tax at capital gains rates rather than distributing the money and having it taxed at ordinary income tax rates (approximately double the capital gains rates). See IRC sec. 531 to 536 and pertinent regs. This law makes directors distribute excess profit since if a public company were assessed this tax the directors would likely have personal liability for the amount of the tax as any fool should see the situation developing and distriute the money. But for this forum you were pretty close!
The SEC called off its investigation in exchange for Microsoft's promise that it will not break the rules in the future
You have got to be fucking kidding me. Microsoft is already a convicted criminal; calling off an investigation of them like this is no different than calling off all charges against a wanted criminal in exchange for their promise that they won't commit any more crimes in the future.
I pledge allegiance to the flag...
of the Corporate States of America...
When the market approached saturation, the American product-style system came to Britain where washing machines are designed to break down after five years ^H^H^H^H^H^H^H^H to not last longer than five years. I remember there being digust at the low reliability and build quality, the units weren't constructed by hand. The burden of disposing this number of machines was considered prohibitive. The Americans argued that as time progressed the design and efficiency of new washing machines improved, but these improvements couldn't propogate unless the old products were disposed of, thus the American system allowed technological progress. Of course the Americans won the day, my washing machine will die in 3 years. US culture ingrains into its citizen that cash is king, you are what you have, a man with a ferrari is a better man than one with a 15-year odl Lincoln towncar. However surely changing this would be killing the American dream?
A caveman dreams of being us, the incalculable power and riches. We dream of being Q, then what?
They were found guilty of breaking a federal law in court and that verdict was upheld on appeal. Why do you think they are in court now? To determine the penalty for breaking the law.
Uhhh... you are talking about the anti-trust case, whereas I and the rest of the people on this thread are talking about the SEC investigation.
"And like that
Oh contraire - "regulations" are in fact so close to law that mere mortals can't tell the difference.
;)
Who said I'm a mere mortal?
Regulations correctly issued by government agencies have "the force and effect of law" until overturned by a court of legislated out existence by Congress.
The SEC is a government body that REGULATES the exchange of stock. They can fine you or your company for breaking the SEC regulations. They can do things to your public stock. They can cause you or your company to be criminally investigated, but they themselves are not able to put people in jail.
From their site:
"While the SEC has civil enforcement authority only, it works closely with various criminal law enforcement agencies throughout the country to develop and bring criminal cases when the misconduct warrants more severe action. "
There are lots of people in jail today because they broke IRS "regulations".
Can you give me some examples of broken IRS regulations that landed people in jail? Not paying your taxes doesn't count -- you must pay federal income tax, that is a law, not a regulation. So hopefully you are talking about something else?
"And like that
"Moral - don't trust an analyst. Do your own research. And hope you don't get screwed anyway in the end."
A sincere question for you.
What if I don't have the five hours per day it will take to thoroughly understand the very complex financial system of stocks and bonds? What is I am unable to understand it even if I do have the time? It takes a lifetime of study to understand just bonds for example.
What is your advice to the average Joe on the street. It sounds like you are saying "stay out unless you understand fully" knowing full well that the average Joe can't ever understand and do their own research. Are we headed for a future in which the individual investor should stay out of the market altogether?
War is necrophilia.
In our country we almost never prosecute rich people let alone corporations.
War is necrophilia.
According to an article in the Economist from August 5, 1999 entitled " Share and share unalike."
Microsoft Financial Pyramid covers some of the issues up to Nov 1999. I can only assume that these practices have continued and that MS probably would tank if subjected to a proper audit. That's just the book keeping.Also keep in mind that not only are OpenSource/Free Software breathing down their neck with increasingly viable desktop alternatives, but Oracle, Sun, IBM as well. Plus an increasing number of governments, lately Peru, China and Germany, are getting tired of their busness practices.
Now think about the software situation. Linux, QNX and others have them beat in the embedded OS market. Windows as a server OS is beat by Solaris, Linux, *BSD. Windows as middleware is becoming decreasingly competetive with Gnome and KDE. Aqua has it beat hands down, you can even run legacy apps like Ms-Word, which is about the only thing currently holding GNU/Linux back from the general desktop. However, OpenOffice and others are filling the gaps left by Lotus-123, Borland's Quattro, WordPerfect.
Then there are indications that there is no improvment on the horizon. For example the shift from software, to marketing to legislation. The way MS is working the punishment phase of the antitrust trial it looks that their products are unable to compete in a free market. Even die-hard MS fans cannot refute EWeek's report that "[Allchin] later acknowledged that some Microsoft code was so flawed it could not be safely disclosed." Maybe coincidentally, Bill has been shifting investment money out of Microsoft. If the rest of the top execs are offloading also, (this is speculation and it would be nice to see some real figures, but where can that type of info be looked up) then it would indicate no confidence.
So with out a cash flow or at least investor confidence, all Microsoft's troubles would bite them hard. Death by a thousand small bites, plus a few medium sized ones. Perhaps the SEC backed off to avoid popping Microsoft's baloon like just another overratted dot-com.
Or would it turn out to be a collapse more like Enron's.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.