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."

Comments

Cops with CEO's

[a3217055]

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.

Not as greedy as he looks

[SpamKu]

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.

Re:Not as greedy as he looks

[Motherfucking Shit]

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.

The Corporation should be facing charges. It ought to be fucking disbanded. The real problem these days is that the Corporations have rights of Persons, but do not face the same liability as Persons.

If I, as an individual, cheat you out of millions of dollars, I'll probably spend 20 years in prison. If I, as the CEO of a Corporation, cheat my shareholders or some other Corporation out of millions of dollars, I'll probably have to resign as CEO, take a 5 million dollar golden parachute, and retire to South Beach. If I'm stupid enough to lie to federal agents during the ensuing investigation, I might do 5 months' time in Club Martha. If I'm a major contributor to the President's political party, I won't even be indicted.

This is the problem, the Corporate Veil is the problem. I have nothing against limited liability; if you incorporate and your company fucks up, there's no reason it should bankrupt you personally for eternity. But when Corporations are given many of the same rights as Persons, they must also be held accountable as Persons would be in similar situations.

We are in dire need of a Corporate Death Penalty. Enron, WorldCom, and others should not be able to simply file for bankruptcy and erupt as phoenixes from their own ashes to repeat their sins.

Re:Not as greedy as he looks

[Anonymous Coward]

I like the idea of a corporate death penalty. To expand a bit upon the idea, I think the following would be more fair than the current situation.

1) Taking current bankruptcy proceedings a bit further, once a "CDP" is declared, the corporation must immediately sell all existing assets at market value or as close to market value as possible to complete a fast sale. Supposing "Renron's" corporate HQ building is worth 20 million dollars, a 15 million dollar bid for that building by anyone should be considered reasonable, accepted, and that money should go into a "corporate funeral fund." Same with all of the rest of the company's assets.

2) The corporation must dissolve and may never operate in business again, no matter who's supposedly in charge. Regardless of who purchases the assets, no one who was an executive at the failed company may be allowed to work for any company who acquires any part of the failed corporation. If Lenny Kay was CEO at Renron, and Renron's assets are bought up by Ding-Dong Corporation, Lenny Kay cannot go to work for Ding-Dong Corporation in any capacity.

3) Individual, non-corporate investors in the failed company _must_ be compensated first. This means that Joe Average who bought 500 shares of Renron must be given his fair share of the "funeral fund" long before BigBank or AngelVenture get any of their loan money back. Same goes for all of the retirement funds who, on behalf of Joe Averages, invested in Renron. If BigBank or AngelVenture loses out, boo hoo. Maybe next time around, they'll be a bit more responsible with the blank checkbooks loaning a few billion here and a few billion there.

4) With a corporation given a "CDP," the executives should have to pay back into the process. CEO got a 10 million dollar bonus last year? Fine him 10 million dollars and put it into the "funeral fund." Any inappropriate spoils should be returned to the death fund of the company, to be recompensed to its shareholders, individuals first.

With some tweaks like these, corporations might become responsible again.

Your vote matters.

Re:A Call For Responsibility

[temojen]

At the university I went to, ethics was a required course for computing science and engineering, but not for ANY of the business programs.

Re:A Call For Responsibility

[baywulf]

From the "Devil's Dictionary":

CORPORATION, n.
An ingenious device for obtaining individual profit without individual responsibility.

CA training support anecdote

[certron]

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.

http://www.livejournal.com/users/sclerotic_rings /5 80872.html

"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)