Tag Archive for ‘Fraud’
Two leading consultants say companies must create lower risk environments for fraud. To do so, they argue, organizations first must understand their own corporate ecology — the interrelations between people and their workplace — and tailor controls to the nature of those systems.
The economic crisis, increased rules and regulations, and heightened scrutiny of boards’ roles have “corporate directors feeling pressure to be more effective in the boardroom,” according to an annual survey of directors of large companies by PricewaterhouseCoopers. Key concerns include executive compensation, risk management, strategy, succession planning, information technology security and fraud.
Whistle-blowers, truth-tellers and fraud-spotters pay a miserable price on Wall Street. They are vilified. They are fired. Sometimes they are even sued. Instead of being sought after, they become persona non grata. Pulitzer Prize winner Jesse Eisinger reports on the case of David Maris, a one-time star analyst for Bank of America.
The U.S. Justice Department said it filed a complaint under the False Claims Act against Oracle Corporation alleging that company defrauded the federal government on a General Services Administration (GSA) software contract that was in effect from 1998 to 2006 and “involved hundreds of millions of dollars in sales.”
The SEC charged that Dell and its founder, Michael Dell, and several former executives did not disclose to investors large “exclusivity payments” the company received from Intel Corporation to not use central processing units manufactured by Intel’s main rival, Advanced Micro Devices Inc. At their peak in the first quarter of 2007, those payments constituted 76 percent of Dell’s operating income.
In a decision with far-reaching implications for the prosecution of corruption and fraud cases in the United States, the U.S. Supreme Court ruled that the federal government’s “honest services” law could be constitutionally applied only to cases involving bribery and kickbacks. The decision was a partial victory for two high-profile executives – Jeffrey Skilling, former CEO of Enron, and Conrad Black, former chairman of Hollinger International.
Dell Inc. said the company and its Chairman and CEO, Michael Dell, are in negotiations with the Securities and Exchange Commission to settle charges related to past dealings with chip-maker Intel. The company revised its earnings to include a $100 million liability to cover the cost of an anticipated settlement by the company with the SEC.
The Federal Trade Commission said that when homeowners fell behind on payments and were in default on loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property. But rather than hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors, often marking up prices charged by 100 percent or more.
When Bernard Madoff pleaded guilty to running the biggest Ponzi scheme in history, he insisted he was the lone perpetrator. But an investigation by ProPublica finds an alternate narrative is now emerging from the pile of Madoff-related litigation – one in which a small circle of men played knowing, integral roles in the scheme, in some cases benefiting more from it than even Madoff himself.
The maker of ATMs, bank security systems and voting machines was charged by the U.S. Securities and Exchange Commission with manipulating earnings over a five-year period, misstating the company’s reported pre-tax earnings by at least $127 million.