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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."
Where's my movie deal?
A late bubble bursting? A lot of innocent people are going to suffer for this: lost jobs, lost opportunity, lost credibility.
Seriously, can't the tech industry rise above this Enron-ish nonsense?
You seem to think that the IT industry has some eerie ethics that govern all. That is not the case. The IT industry is just another industry with shares, stockholders, filings, profits and losses. Money is what counts. The size of the profits and payouts of high ranking executives are just numbers on a scoresheet those people play like a game. Trouble is, real people get hurt and those assholes get a slap on the wrist at the white-collar country club jail for a while.
If you or I were to walk into a bank with a note that said "I have a gun." and walked away with a few $K, once caught we'd be in jail longer than the white collar criminals that steal tens or hundreds of millions of dollars.
Trolling is a art,
I'm in Canada. If I were to walk into a bank with a note that said "I have a gun" the teller would tell me to "fuck off" then proceed to throw rolls of pennies at my head.
Trolling is a art,
At the university I went to, ethics was a required course for computing science and engineering, but not for ANY of the business programs.
which brings us back to the beginning of the argument... that if the focus was more on dividends and less on share value going up and up and up, the incentive to cook books would not be as large.
Making the share price go up only requires BELIEF that the stock is worth more... paying more dividends requires actual profits... I think that was the point.
Nobody is arguing that it's not an investment.. it is.. but the inherent value of that investment is, or should be, based on what the company can actually produce.. in reality, it's now based largely on hype.
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.