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Ex-Autonomy CFO: HP Trying To Hide Truth
jfruh (300774) writes The fallout from HP's Autonomy acquisition keeps getting more dramatic. Autonomy's ex-CFO is trying to block the settlement of lawsuits that arsoe the botched deal, claiming that HP is trying to hide its "own destruction of Autonomy's success after the acquisition." HP hit back, saying the ex-CFO "was one of the chief architects of the massive fraud on HP that precipitated this litigation."
There are two things I'm certain of in no particular order:
1. HP are wildly incompetent.
2. Autonomy management (especially Lynch) are a bunch of crooks.
I do actually know people who have had dealings with Lynch.
SJW n. One who posts facts.
Too bad there isn't a website like groklaw that would track these things and provide some pretty nifty analysis too.
There's a line in the IT World article that really stands out at me, which is:
"Autonomy founder and CEO Mike Lynch, who was ousted from HP in 2012, has denied any wrongdoing, saying publicly that HP was aware of Autonomy's accounting practices..."
So in this case, Autonomy is making the case that they were cooking their books, but committing accounting fraud is perfectly okay because HP should've known about it... or am I missing something here?
Probably not.
I did my MBA in Entrepreneurship (yeah, I KNOW! Spare me!) and we spent quite a bit of time on financial due diligence. Some of the case studies - things that happened in real life - were just pathetic.
Remember kids, all the bullshit that businesses pull on us consumers, they do to each other ten fold and justify by saying "you should have known better".
Then if it's worth it, sue.
Autonomy was audited by Deloitte. HP hired KPMG (who subcontracted Ernst & Young) to double-check Deloitte's audit. Those are three of the four biggest accounting firms in the world. All gave the green flag.
And these (some of them at least) are the same folks who signed off on the mark-to-market figures and related matters for Goldman Sachs, BofA and the rest of the folks who caused our financial system to collapse in 2007-2008.
See a pattern?
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
If your accounting is violating all the rules it's possible to hide the real accounting information from everyone. Look at what Enron did with layers of fake companies that weren't on the books holding all the bad debt. When you go to that level of fraud the only people that are going to be able to unravel it are forensic accountants and months of fine toothed combs. The system is gameable because it operates on a system of trust, when these CEO's and accountants are willing to go to the level of full on accounting fraud the system we have doesn't work because it always assumed we had rational players that aren't two bit scammers. The degrading of ethics in business school has apparently turned that on it ear.
Maybe the answer is for these accounting firms to hire real forensic accountants to analyze companies. But if we've reached that point it's even scarier than you can imagine. What I think we need to do is be putting these CEO's and CFO's in jail, for 15-30 years and assigning high enough criminal penalties and restitution to ensure they are broke when they get out. Sarbanes-Oxley gave them the teeth to make that happen, the problem is right now Crime pays. The justice department should be investigating everyone involved.