That $1.45 Million House May Not Look So Great Now
June 14, 2004
You’re a public-company officer. Your company’s been having — or will soon have — financial troubles. You’ve had a hankering for a million-dollar home in Florida. You might want to think twice about buying that house. A former officer of Homestore, Inc., who is now a defendant in a variety of securities lawsuits. recently learned that his purchase of a $1.45 million home in Florida could eventually be found to constitute a sheltering of his assets from creditors, which in turn could make him ineligible to have the company advance his defense costs in various securities lawsuits. See the opinion by the Delaware Chancery Court. (Link via BNA Corporate Counsel Weekly [$])
Build Floors, Not Walls
June 14, 2004
From an on-line Q&A with NYT columnist Thomas Friedman on the subject of outsourcing:
My motto is build floors not walls. Build stronger foundations so more people can compete without walls. But putting up walls will only impoverish everyone.
Adelphia Vendors Motorola, Scientific-Atlanta Implicated in Executives’ Securites-Fraud Trial
June 9, 2004
Today’s WSJ ($) reports that, in the trial of two former Adelphia executives, an email and witness testimony have implicated Adelphia vendors Motorola and Scientific-Atlanta as “allegedly help[ing] Adelphia cook its books.”
After-the-Fact Contract Changes, Side Letter,
Lead to Federal Fraud Indictments
June 4, 2004
The Department of Justice recently announced that several former Enterasys executives had been indicted for securities fraud and wire fraud. According to the Justice Department, the accused executives altered an already-signed contract to change its terms — after the close of the quarter — so that revenue could be recognized in the quarter. One of the executives also allegedly drafted and signed a secret side letter giving a customer an exchange right, and insisted that the exchange right not be referenced in the customer’s purchase order, so that revenue could improperly be recognized.
Good News — I Guess
June 3, 2004
The Associated Press reports that today the U.S. Attorney’s office announced criminal indictments against seven former employees of Symbol Technologies for securities fraud. Symbol’s home page announced, “No Criminal Complaint Filed Against Symbol.” Imagine being a customer and seeing that on a vendor’s home page. (The Symbol home-page item is linked to this press release.)