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PC Cooling Specialist Zalman Goes Bankrupt Due To Fraud
An anonymous reader writes Zalman's parent company Moneual's CEO Harold Park, and vice presidents Scott Park and Won Duck-yeok, have apparently spent the last five years producing fraudulent documentation relating to the sales performance of Zalman. These documents inflated sales figures and export data for Zalman's products. The reason? Bank loans. By increasing sales and exports Park and his associates were able to secure bank loans totaling $2.98 billion. Someone has finally realized what has been going on, though, triggering Zalman's shares to be suspended on the stock market and the company filing for bankruptcy protection. The questions now turn to how this practice was allowed to continue unnoticed for so long and how the banks will go about getting their near $3 billion back.
Yeah, never good to engage in fraud. That said, Zalman will be missed as a passive cooling solution for many. I wonder how their IP will be sold once this is all finalized with the banks. I'm unclear of the process.
Life is not for the lazy.
...I'm not at all surprised.
ya never know. frist
Will he be sent to the Cooler?
It's not like they actually "earn" the money, so it's more like "I make money, you get fucked".
don't get me wrong, i love their fans... but come on, it's a fan. those exec and investors are dreaming if you think that market is that large.
In these situations everyone should just chill and take it easy. Clearly we don't need to let things spin out of control. I'm sure Zalman's lawyers can take the heat.
Oh don't worry about that. Taxpayers and ATM fees will cover it. Should take about about 20 or 30 minutes.
“He’s not deformed, he’s just drunk!”
might want to check those guys out. see if they got paid off on the side for this deal.
The occurence of this sort of fraud in the 19th century led to the emergence of the role of auditors, whose responsibility is to ensure that the accounts are telling the truth; as a result this sort of fraud is rare in Western countries. The question now becomes one of who the auditors were - were they ones who should have done the job, or were the banks fooled into accepting a poor audit. In either case however the auditors will be on the hook unless they can prove that the CEO was doing a VERY good job of hiding the facts.
Banks are on the hook? Too bad for them, someone in the banks organization didn't do due diligence. Hopefully it was only JP Morgan run by the wonderkind. Lets not bail them out again on this. Couldn't happen to a nicer bunch of investors.
Why? Fraud is part of the show. It's perfectly natural.
“He’s not deformed, he’s just drunk!”
*Earning* money is for the peasants.
"When information is power, privacy is freedom" - Jah-Wren Ryel
No, dude. It's capitalism perfected.
They shouldn't be getting their $3 billion back: they took a foolish risk and need to suffer the consequences.
I had to click on several links from the link in the summary to actually get to something that details the fraud:
http://koreajoongangdaily.joins.com/news/article/Article.aspx?aid=2996835
Another blow for the Zalman fanbois.
Bank Analyst: oh god guise...this is bad...we've given billions of dollars to a company that makes personal computing chip coolers and exhaust systems...
PHB:Yeah Zalman...they do things with computers and internet, and probably clouds too its the smartest...
Analyst: no...you dont understand...you know those little fans in the back of the computer....
PHB:....mother of god.....
Good people go to bed earlier.
Umm, I'm pretty sure that if you end up in jail and/or bankrupt, you did it wrong.
Does capitalism depend on people being truthful all the time? Somehow I don't see that working. I thought the robustness of capitalism came from relying on everybody to be selfish bastards.
It's indeed "capitalism done right" if the banks don't get their money back: the people who were careless get punished automatically by the market. The nice thing about that is that the punishment is automatic and appropriate: you make a bad decision, you lose your money.
In non-capitalist systems, the people investing in fraudulent companies use other people's money, so they don't get punished automatically. Here's an example of how that works: http://en.wikipedia.org/wiki/3...
Ayn Rand taught me that if I feel good doing it, it is the right thing to do.
Classically, capitalism relies on producing goods that people want at prices people are willing to pay for them. It relies on consumers being rational actors in their own self interests. Deception throws the whole thing off; you can make rational, selfish decisions if important data needed for your purchase decisions is withheld; hence consumer protection laws.
Except that, of course, in modern capitalism banks are too big to fail and take these risks because they know it's not their own money that's at stake, but that of tax payers.
But well obfuscated.
They will try and earn fees of a halfharted effot to get out money back.
One would think that before lending $3B, banks would ask to see audited financial statements. If they didn't, then they lost this money through their own negligence. If they did, then the accounting firm the provided the audits is liable (assuming it gave clean opinions). Neither of those mean the company itself wasn't fraudulent. I wonder if it was truly banks that made these loans or venture capitalists chasing after something that was obviously too good to be true?
Does capitalism depend on people being truthful all the time?
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
SJW's don't eliminate discrimination. They just expropriate it for themselves.
Except that, of course, in modern capitalism banks are too big to fail and take these risks because they know it's not their own money that's at stake, but that of tax payers.
But well obfuscated.
More like simplified. The people whose money was lost were bank customers, the ones who lost it were bank employees. All the customer can do is choose a bank as best he can based on the bank's reputation. It is his money that is lost because the bank handed control of it's money to a bunch of morons. So the market punishes the customer not the moron who made the bad decision. It is the law that is supposed to punish the bank employee. However, in view of the fact that not a single bankster seems to have been put on trial as a result of the 2008 mortgage crisis we can rest assured that the worst that is likely to happen to the bank employee is that his bonus will be reduced that quarter and his career prospects may be dampened for a while. Now one may still criticize the customer for picking a lousy bank to do business with but let's face it, when it comes to finding a honest bank to handle your finances, the average capital owner is not exactly spoiled for choice these days. The best he can do is choose the least scummy bank. Ether that or invest his money in guns, ammo, canned goods and a heavily fortified dwelling with a built in water source.
Only to idiots, are orders laws.
-- Henning von Tresckow
Not it you stashed a good chunk of it in offshore accounts and your jail time consists of a few months in some minimum security country club.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
It also relies on there being a number of supplier so that there always is a possibility to go somewhere else, even if the first twenty you used turned out to be collaborating to keep prices high.
Once you buy something else than toothpicks and bolts there are surprisingly few fields that aren't dominated by a few large companies that avoids competing too much.
No one doing this shit ever believes they'll wind up in jail or bankrupt. It's like the Dilbert, where PHB insists that even if he winds up being wrong in the end, at least he's right at first.
Welcome to the Panopticon. Used to be a prison, now it's your home.
I'll take free market capitalism over socialsim/communism ANY DAY!
At least in a democratic form, you have the ability to do better.
Under socialism, there is no reward, for doing better, and you become
LAZY, quality of work, goods & services suck.
You mean a free market capitalist democracy where wealth steadily gathers into the hands of an elite clique of super wealthy individuals with the result that the free market capitalist democracy inevitably evolves into a plutocracy where the clique of hereditary plutocrats (aka. the 1%) step on anybody who seeks to rise by his own merit while the underclasses become steadily impoverished. This is usually followed by a revolution of the underclasses and the free market capitalist democracy is replaced by some form of more socialist order with many of the shortcomings you mentioned. Lather, rinse and repeat at nauseam.
Only to idiots, are orders laws.
-- Henning von Tresckow
What happened was that the parent company Moneual, faked sales near $3 billion, NOT get that much loans. They secured loans of about $600 million with about $300 million insured. So the banks will have a loss of less than $300 million (probably near that amount). Also even though the parent company is definitely going bankrupt, Zalman will probably get a court order to keep running after the parent company forfeits all it shares.
Does capitalism depend on people being truthful all the time? Somehow I don't see that working. I thought the robustness of capitalism came from relying on everybody to be selfish bastards.
That depends on what you mean by 'capitalism'(many people who use the term do mean something, though often not the same thing, so it's pretty rhetorically slippery).
Typically, when people say 'capitalism', they are implying 'free market' and implicitly or explicitly extolling the virtues of 'economic equilibrium'. This is where truthfulness becomes a direct requirement. The idealized model of a free market equilibrium requires rational actors, perfect information, absence of market power, and the like. Lying is about as aggressively contrary to perfect information as you can get, since it's usually a calculated attempt to ensure even more asymmetric information in the liar's favor. And the demonstrations of asymmetric information leading to market failure(both historical case studies and in theoretical models) are numerous.
So, while any real-world implementation can't rely on people to be honest, or even assume that the cheats will be caught all the time; there are good reasons to suspect that dishonesty imposes both direct costs on the victims of fraud and an overall drag on the market efficiency, so there is a strong incentive to punish, and attempt to minimize, dishonesty and fraud.
Yes, I would like to know why you all allowed this to continue!
Higher fees to customers, less interest, ATM fees, credit card fees, checking fees, yadda yadda yadda. Banks have ways to fleece people like crazy.
If you want to rob a bank, you need a gun. If you want to rob the world, you need a bank.
If telephones are outlawed, then only outlaws will have telephones.
No. You're right that if you end up in jail, you did it wrong. But if you end up bankrupt, well, that's normal and shows you're good at taking risks. Lots of entrepreneurs wind up going through several bankruptcies. When they do the bankruptcy right, they still come out rich, and have something else already lined up. I know this sounds insane, but it's really quite normal. Fiscal responsibility, the kind we normal wage earners have to maintain, is a sign of not taking risks. It's a negative attribute, as far as the VCs are concerned. (Until it's their money being lost.)
Not necessarily. Elevated prices act as a "release valve" on demand; the higher things are priced, the less consumers are willing to buy them. In the aftermath of the Katrina crisis, Americans changed their driving habits significantly to reduce the need for gasoline. Without elevating prices, shortages become complete scarcities, and this happens often in South American socialist states with centrally planned economies, such as Venezuela.
And a note about collaboration: cartels are a function of lassaiz-faire economics, not free-market capitalism; they skirt the organic supply-demand relationship of capitalism by introducing artificial price points, when price fluidity is an essential component to capitalism.
Will the CEO do some hardtime for this?
maybe some FPMITAP time
In your first statement, you make a false dichotomy. I'll take getting handed 2.5 million bucks in twenty-four Scooby-Doo lunch boxes over Germany invading Russia any day.
Your first statement is about "free market capitalism", then your second one is about something with a "democratic form" -- these two things are not related.
In your third statement, you're confusing Socialism with Communism.
That's the lesson here. They just weren't big enough.Dell did it too but got away with a pat on the wrist.
So real estate and university mills are not capitalist?
Capitalism done right.
Sorry fag, it stopped being capitalism the moment they started lying
Wait, you're saying it stopped being
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
the moment they started lying? This was very much a case of private owners doing something for profit.
I think you're confusing it with the ideal free market, which assumes well-informed decision-makers. Do please try to be accurate when you are correcting others.
Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
As long as you realize that Libertarian capitalism (i.e., no oversight of financial activity) is exactly what happened here.
One of the fundamental requirements for the proper functioning of a free market is access to accurate information. If consumers don't have information about the products and services they are contemplating for purchase, they can't be rational actors after all. When a business misrepresents its products or services in a way that isn't immediately obvious, the market fails to function correctly. So in short, yes, capitalism relies on honesty as much as Communism relies on altruism. Humans are neither, which is why both systems fail without some way to discourage selfishness and lying.
Agreed. How dare they punish this job creator!!
Spending your own money is for peasants.
Mod me down, my New Earth Global Warmingist friends!
Plus, the banks involved won't even lose out cos' the governments will declare them "Too big to fail" and bail them out from the endless pot of money that governments just pull out of their asses without any source. So it's totally a victimless crime, right? So we should all do this then everyone will have infinite money and live happy ever after...
'Don't worry' said the trees when they saw the axe coming, 'The handle is one of us.'
Would imagine there has been regulatory capture. Who did the audit?
Of course, not. A liar will be caught — and pushed into bankruptcy. The banks will be punished for not being sufficiently careful by losing their monies and their customers (not taxpayers').
The company will, likely, be sold or otherwise placed in control of new management, which might — as Mitt Romney was doing before entering politics — turn it around into making profit again, possibly even repaying the debts.
That is, indeed, how Capitalism works — or ought to, anyway — unless the company's product is something particularly dear to the government (Solindra, cough, Tesla, cough), or the banks involved are at risk of failing over the problem and the Administration decides, it can not be allowed. Then it becomes Crony Capitalism, which to the real thing is like Westboro Baptist Church to Christianity.
In Soviet Washington the swamp drains you.
Evidently, the Anonymous troll has never lived in the USSR...
In Soviet Washington the swamp drains you.
So if I play video games on a console I have to earn my money? Fucking PCMasterrace wins again. I mean there is no other definition of a peasant right?
So by your definition if I break into a house and steal everything, then sell it at my store... Thats Capitalism.
Sorry, you are wrong. What they have done is not capitalism, it is fraud and IMO Theft.
And a note about collaboration: cartels are a function of lassaiz-faire economics, not free-market capitalism
I think this is the real important point here: many fans of laissez-faire economics call that "real capitalism". According to them, you can't say capitalism is a failure, because it simply hasn't been tried yet. Any government interference makes it not really capitalism anymore. But the one gem in capitalism, the one really, truly unmitigatedly good thing about it, is the free market. But with everybody looking to dominate the market in some way, the only way to keep the market free is to regulate it in a sensible way, break up cartels and monopolies, and force some competition in places where it is clearly needed (like the broadband internet market in the US, perhaps?).
And of course the regulators need to be independent from the industries they regulate. (Again, ISPs buying laws that block competition and ban community broadband is something that shouldn't even be possible. Or car dealers lobbying to block Tesla.)
Just FYI, the "Anarcho-Capitalist" model specifically allows lying, since the model is based on freedom and therefore it's against their ethos to have a government impose rules against lying. In short, "freedom means also being free to lie".
The idea is that liars will be "self-regulated" out of the market because once they're found to be liars, nobody will ever do business with them ever again.
Obviously reality shows us this cannot possibly work, but there's nothing inherent about laissez-faire capitalism that precludes lying.
Cartels are collaborative efforts to raise prices through collusion. This only succeeds when the cost to enter a market is sufficiently high. It rarely survives long term, and crumbles horribly when the cartel breaks apart. Just watch OPEC as the US becomes the largest oil producing nation, not part of the cartel for a nice view of how cartels stop working.
The problem is, we are too fucking impatient as a people to wait for market forces to change the landscape. However, if you're aware of your surroundings, and understand that market forces eventually win out, you can take long term investments and plan accordingly, you'll end up very wealthy. The trick is to read the tea leaves well in advance.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
The real question is, how much are you charging for that straw man, there?
Gamingmuseum.com: Give your 3D accelerator a rest.
All the customer can do is choose a bank as best he can based on the bank's reputation
And that's why we have the FDIC. Because when banks go under and deposits aren't guaranteed, there is chaos all about as people lose their homes and then their jobs.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
I think you're trying to say is they haven't done good capitalism.
Literally the definition of capitalism is
an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit.
(cite for that exact phrasing: http://en.wikipedia.org/wiki/C...).
The word owned there is relevant. Theft is a subversion of ownership and thus stealing can legitimately be called anti-capitalist.
That said, the GP wasn't defining capitalism, he was saying capitalism relied on profitable manufacturing of goods. I would clarify that this is one of several things it relies on, I don't disagree that capitalism relies on that.
This is why we need MORE regulation of banks and their practices. The regular people that go to the bank will be the ones suffering in the end. Too bad there were no regulators keeping an eye on this. If it is this easy to game the system, then there is a systemic problem.
That's not capitalism; that's progressivism and financial regulation; it's what Democrats preach, and both Democrats and Republicans practice.
Hence my point: let banks eat their losses and let the market take care of this.
But well obfuscated indeed.
If my bank makes a bad loan, I don't lose any money; the amount in my account stays the same. The bank may have to reduce interest payments, but that's not a loss: I simply switch to a different bank.
If you let a bank "handle your finances" you're a bloody fool anyway; most banks don't even pay enough to cover inflation. Banks are for handling financial transactions, not for savings.
if the bank loans an entity $1,000 and that entity cannot pay, that entity is in trouble
if the bank loans an entity $2.98 billion and that entity cannot pay, the bank is in trouble
I think it's also a type of bird.
Alas, capitalism and fraud & theft are fully compatible with each other.
Regulation should not consist of anything beyond punishment of (and where possible prevention of) the act or threat of force or fraud, and restitution where reasonable. Anything else is a violation of individual rights, and the market ceases to be free.
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The requirement for "perfect information" is a straw man created by people attempting to tear down capitalism. "Perfect information" is impossible.
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Wait, what's wrong with Tesla? I though they paid back their government loan ahead of schedule.
No, its a simplified model created by 'economists' to provide a comparatively well behaved 'ideal market' that can be used as a comparison tool to study the behavior of the real market, how it is similar and different, what factors are or aren't relevant to its behavior, and so on.
It's a 'strawman' in the same painfully weak sense that ignoring friction when a physics class starts talking about parabolic motion is an attempt to tear down Newtonian mechanics. Yes, it's an abstraction that doesn't exist in the real world. Everyone knows that. However, its an abstraction that simplifies the behavior of the model and provides a starting point to analyze the real world and attempt to work out what sorts of information imperfection are at play, what types of information would be most valuable in achieving results similar to those of perfect information, and so on.
Totally.
Just compare German cars to American ones... oh wait
Rational action involves behaving in accordance with one's understanding of available information. Actors do not become irrational acting on bad information.
That's the advertising. In practice, communism is a particularly bad flavor of tyranny that relies on force and deception.
__People are individuals, and range from habitually honest to habitually dishonest.
__Capitalism is weakened, and the people living in it harmed, by dishonesty.
__If the goal of communism were to make the lives of its people better (it's not), it would fail anyway because of built-in contradictions and a misunderstanding of human nature. Communism is inherently irrational.
__Selfishness is acting in accordance with one's rational self interest, and it is a virtue . (Some will try to tell you that selfishness is excessive self-interested action, but that is not possible.) Honesty between people is rational and selfish behavior.
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You must feel good lying.
Rand heavily emphasized that emotions are not tools of cognition, and that rational action is right.
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It wasn't a $2 billion bank loan. It was was a $2,000,000,049.99 CPU cooler with a $2 billion mail-in rebate and free Eggsaver shipping
Hope they splurged for delivery confirmation
It is government that pronounced banks "too big to fail", not reality. And it's government that set up pernicious incentives, and in fact well nigh mandated, that banks act in a destructive manner. Both are to blame.
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Socialism is simply communism watered down and veiled. They share the same underpinnings.
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Long term statistical studies show that the freer the market, the less the tendency for wealth to be stable in a family. People generally and the rich particularly do a poor job instilling in their offspring the virtues that made them what they are.
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One thing that's currently regulated is "anticompetitive behavior". One example of such is lowering the price on your product enough to drive the competition out of business, absorbing the loss with your (presumably larger than theirs) cash reserves, and thereby becoming a monopoly provider.
Would you consider that behavior to be force, fraud, or okay? (Seriously, I'm curious how you would classify it. I could see arguments for each; they're pretty broad categories.)
Really bad, I have both a Moneual case I love and Zalman coolers which work great.
It was deemed too precious to fail by the government.
That's irrelevant to my argument. Not all companies helped by the government are necessary failures. The point is, there should not be any such companies.
Not to say, the Administration has failed to mishandle Tesla too:
In Soviet Washington the swamp drains you.
That's pheasant. Although, traditionally, it was fine to harass peasants, but peasants weren't allowed to hunt pheasants.
Bloody English.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
Right. It's capitalism when it's good, it's not capitalism when it inevitably becomes bad doing the exact same things.
Gotcha.
And since both government and banks in their current form are the product of unchecked capitalism doing what it does - streamlining its profits to the max while minimizing risks, this has no impact on the argument.
It's capitalism when investors bear risks, reap the rewards, and have to deal with the consequences of bad investments. Sometimes that is "good", sometimes that is "bad". It increases volatility and inequality, but it also increases wealth for everybody.
It's not capitalism when government assumes the risk of big corporations and banks through regulation or bailouts. The current administration has been particularly hypocritical in using attacks on capitalism to justify handing out money to big businesses. That kind of hypocrisy is a long-standing trait among progressives, and it is one reason progressivism is so evil.
See, the part you don't get is that you have a choice between growth and inequality on the one hand (capitalism), or corruption and poor economic performance on the other (progressivism). Anybody who promises you the benefits of capitalism without the costs is a liar and a fraud.
That's pheasant. Although, traditionally, it was fine to harass peasants, but peasants weren't allowed to hunt pheasants.
Bloody English.
The pleasant peasant presents the pheasant's presence.
English, because fuck you.
Calling someone a "hater" only means you can not rationally rebut their argument.
Right. So you separate capitalism and it's inevitable consequences, give the inevitable consequences a name that is not "capitalism", and then happily pretend you didn't just whitewash capitalism.
Gotcha.
Oh, sure, stupid people like you coming out of the woodwork trying to take us towards fascism out of their greed and ignorance is indeed an inevitable consequence of capitalism. It's just not a fault of capitalism, nor a reason to avoid it.
I doubt you'll ever figure it out; proto-fascists like you never do.
People warning about inevitable tendencies of unchecked capitalism are in fact fascist.
Excellent point.
In other news, people warning about inevitable violent tendencies of certain criminal psychopaths are in fact murderers and so on.
Not by definition, but in practice it is pretty damn close. The real difference is that you are not wealthy enough to enter that market, and you do not have corporate personhood to hide behind.
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