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CA's Ex-CEO Indicted on Fraud
An anonymous reader writes "CNN is carrying a story about how Sanjay Kumar, ex-CEO of Computer Associates, was indicted on fraud charges. Prosecutors said the long-running accounting fraud scheme featured what came to be known by Computer Associates employees as a "35-day month" because company books were routinely kept open until revenues exceeded projected goals. "The defendants cooked the books by simply keeping them open beyond the end of a fiscal quarter for however long it took to meet the analysts earning estimates," said Deputy Attorney General James Comey. Comey said by the time the "house of cards" collapsed, about $2.2 Billion in revenue was booked prematurely. Good thing CA settled it's case with the DOJ."
There is a show in the US called Cops, and it is about police chases. They should make Cops with CEO's getting beat up and tortured by cops. That will be funny. A clip of this episode can be seen in Michael Moore's movie Bowling for Columbine. Anyway interestingly enough I am happy that some CEO's are showing up in the media. Wait till they start being someone's bitch in prision. I love my barbaris society. :)
Save the environment, please plant a bush in Texas.
Sanjay Kumar, while he is a Greedy Bastard, could have been worse. If he had not agreed to "cooperate" and be charged personally, the Corporation itself could have faced charges, causing CA even more problems than it is already facing.
Stupid? Yes.
Stooopid? Probably not.
If I had a real
If this guy gets prison time, he will still be better off than those who lost their jobs because of this actions.
Especialy if any of those who lost their jobs end up homeless.
He will have a roof over his head and three decent meals per day.
I do wonder, though, if the so called country club prisons are just that, or is that an exagguration? I knew of someone who had served in the one in Conneticutt and he said it was no country club.
Cleara
There is one important difference: CA is not about to implode... in fact, throughout this whole scandal, its share price has continued to rise.
Make of that what you will...
At the university I went to, ethics was a required course for computing science and engineering, but not for ANY of the business programs.
From the "Devil's Dictionary":
CORPORATION, n.
An ingenious device for obtaining individual profit without individual responsibility.
It's because stock holders don't care enough to complain. They all chase the growth stocks, which have to sustain an unrealistic growth rate to remain competitive. That pretty much requires some degree of book cooking. If investors were content with the idea of investing in a company for the long term, based on solid financials, and receiving a good sized dividend, a lot of this fraud would be stopped. And the company board would be crucified if they voted for a 30% pay raise to be given to a poorly performing CEO, since that money would have come straight out of the shareholders' pockets. For true corporate reform, reduce dividend taxes substantially to make dividends popular, then investors will make sure companies are cleaned up, since it directly affects their personal bottom line. Sometimes it really is good that people are motivated by money.
It's because stock holders don't care enough to complain.
I don't think their complaints would have any real effect.
The trouble as I see it is that a few of the largest shareholders control the board. Are they going to listen or even care? I don't think they have to. They'll just go on paying themselves large salaries.
Maybe things would change if board members could only pay themselves through dividends.
I found a post on someone's livejournal page about the time that they had spent as a technical writer working for a company that was assisting CA's training department.
s /5 80872.html
http://www.livejournal.com/users/sclerotic_ring
"Not only were we all informed that the company was in great shape, but we were told that the co-CEOs were "good friends of George W. Bush's, so he's going to get us lots of government contracts." Two days later, CA went through its first serious layoff in years, and the entire training department was laid off a week after that." (There's more on the site)
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And thats the scam. The stock market isn't supposed o work that way. The original idea is you bought a piece of the company, it would pay regular dividends, and thats how you made your money. Tats an investment- you know the apprximate dividends it will pay out, and you buy accordingly. Its an inbvestment because its a reasoned decision, and you own something tangible (a piece of the buisness).
What we have now isn't investing, its gambling. You bet on what company you think will beat a made up number by a Wall Street investor (who, incidently, has his own stock and is looking out for his interests, not yours). You can't make reasonable guesses, and you own precisely nothing, becaus the piece of the companay is so overpriced.
You also turn it from a real investment into a 0-sum game. If you invest for increases in value of stock, someone has to wiin and someone must lose. When you invest for dividends, you get a regular payoff- no loser involved. The worst part- 0-sum games are inherently unstable. You can't keep growing forever with no real value behind it. We had a partial collapse a few years ago, we have a bigger one boiling as soon as the stockholders begin to see simple math.
I still have more fans than freaks. WTF is wrong with you people?
I think this is the most interesting part:
Comey noted that for the first time in a major corporate fraud case, prosecutors decided to defer prosecution against the corporation itself.
Imagine that, now we finally have people being held accountable for their actions instead of letting them hide behind their corporate shields!
The "35 day month" used to actually be a fairly common practice in software around 10 years ago. It's purely due to accounting fictions -- monthly and quarterly sales goals and wall street guidance. Short term gain over long term wealth capacity.
.com days.
Many companies squeeze vendors for discounts and delay purchase until end of month. Of course, purchasing processes and systems are bound to mess up, so the P.O. never really gets through until the 1st to 5th of the next month...
This also was rampant back in the
CA still operates in the old model of sales, whereas most enterprise software vendors are much smarter about this sort of stuff.
disclaimer: just my personal opinions, might be b.s., ymmv
-Stu
AC: I guess the sepuku/harakiri culture ended when emperor Hirohito did not kill himself after World War II...
Wrong. The suicide is not appropriate for the imperial family. I can't think of an Emperor ever killing himself... he is a god, he is infallible. If something went wrong, it must have been the fault of a lesser, imperfect person.
Plus, consider that the whole reason Japan kept on fighting a hopeless war for 5 months was to keep going until the USA promised the Emperor's safety. (They would've surrendered long earlier if they knew Hirohito wouldn't face war crime charges)
The ones who should be willing to sepuku are the samurai warrior class that works for the emperor.
Anyway, the suicide culture continued past WWII. Yukio Mishima ended his life in proper samurai style in 1970. Even today, Japan has about the highest suicide rate in the world. After corpses kept clogging up the high-speed trains, the government declared that surviving family will be billed for any traffic blocked by a suicide.