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Security Vendor McAfee to Pay $50 Million Fine
goombah99 writes "RedHerring.com reports that Security Vendor McAfee has agreed to pay a fine of fifty million dollars stemming from false SEC filing. McAfee cooked its books, overstating its revenues one year by 131%, or half a billion dollars. The method employed was 'channel stuffing' in which compliant re-sellers are effectively paid to buy and hold inventory they may never sell. The shipped goods are booked as revenue and the payments disguised in the books. When it caught up with them, McAfee's stock price crashed, wiping out a billion dollars of shareholder capitalization. The story quotes an analyst saying this maybe the swan song for the once dominant vendor."
Seeing as how they (MSFT) are playing the anti-spyware role, maybe McAfee is ripe for a MSFT buyout and integration with Vista?
No wonder corporate fraud is so popular. Even if you get caught, the cost is less than the benefit.
This will continue until a lot of these people end up in prison for a few decades.
I see plenty of Norton demo expiration alerts appear on computers I fix. I think it's misleading and annoying to have virus protection expire after 90 days of use. I've seen plenty of people who see that Norton or McAfee is still on their system so they think they're protected. Of course, the responsibility of wise computer use should be that of the user, but let's face it, most users don't know much anyway and having their anti virus expire on them just confuses them more.
Dude, the whole function of the corporation as we know it is designed as such to shield individuals from direct legal action. That's why they're so popular.
Dude, you don't know what the hell you're talking about. Corporations shield their owners from bankruptcy and civil courts (to an extent). They do not shield the officers of those corporations from criminal charges. Just ask Enron Chief Accountant Richard Causey, who's serving seven years in jail for his role in the corporation's implosion. His old bosses, Ken Lay and Jeffrey Skilling, are about to get their day in court in the next few months, too. If they can find an impartial jury, that is (if they're smart, they'll try to plead out, but if they were smart they wouldn't have cooked the books in the first place...but that's another story).
I don't know where this myth of corporations protecting people who out-and-out break laws came from, but it's not in the least bit grounded in reality. The cases where corporate executives get away with murder, figuratively and literrally, have more to do with state corruption than the legal fiction behind the "corporate veil". The infamous Union-Carbide tragedy was as much an exemplar of the corruption in certain parts of the Indian government as it was the amorality of company officials.
God invented whiskey so the Irish would not rule the world.
As far as I can tell, SOX only causes pain and suffering to IT and accounting departments, and does not actually prevent executives from doing anything wrong. (IMHO as a low-level network flunky as part of a publicy-traded company)
When you get to hell -- tell 'em Itchy sent ya!
Actually, auditing is NOT fraud detection. The following wording is taken from a standard audit opinion letter:
o pinionaudit.html
g _standards.htm
http://www.dsbcpas.com/services/accounting/audit/
Notice that fraud is NOT included in the opinion. The idea of fraud is to go undetected, and you cannot audit for collusion. Therefore, unless the environment suggests fraud is taking place, fraud is discovered by the company or auditor in the normal course of operations or the audit, or if the company reports to the auditor that fraud is taking place, it is extremely difficult to audit for fraud, if not impossible.
The following link is to the auditing standards by the AICPA
http://www.aicpa.org/members/div/auditstd/auditin
See:
SAS 1 - Responsibilities and Functions of the Independent Auditor
SAS 99 - Consideration of Fraud in a Financial Statement Audit
"Extremism in the pursuit of liberty is no vice. Moderation in the pursuit of justice is no virtue." --Barry Goldwater