One poisoned water bottle: Paul O’Neill explains the subprime mortgage crisis
March 28, 2008
From the March 30 NY Times Magazine’s interview with Paul O’Neill, former secretary of the Treasury:
[NYT:] It’s so hard to understand how the subprime mortgage crisis has triggered a financial crisis of global proportions. [Paul O'Neill:] If you have 10 bottles of water, and one bottle had poison in it, and you didn’t know which one, you probably wouldn’t drink out of any of the 10 bottles; that’s basically what we’ve got there.
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.)
Alone, Unarmed (maybe), and Uninsured
October 31, 2003
Here’s a story about a software vendor that found out — in probably the worst possible way — that its general-liability insurance policy did not have the specific coverage that was probably the most crucial for the vendor’s software business. Not a good day for the vendor’s risk-management people.
Backdated Sales Contracts Resurface Years Later
October 9, 2003
The CFO of software giant Computer Associates was forced to resign, along with two other senior financial executives of the company — and who knows what else now lies in store for those folks — because several years ago the company “held the books open” to recognize revenue for sales contracts signed after the quarter had ended.
According to CA’s press release of yesterday, in the fiscal year ended March 31, 2000, the company took sales into revenue in Quarter X even though the contracts weren’t signed until after the end of the quarter. See also these stories from Reuters, the AP, and Dow Jones.
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