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10/31/2006
Daily Caveat Makes Top Ten Resources for Corporate Lawyers
SarBox Opponents Readying Assault, SEC Chairman, Cox Gets Flack from Republican Brethern
More from Jules Kroll...On Pretexting, Databrokers, Etc.
Jules Kroll on the HP Pre-Texting Fiasco
Big News on the Horizon - Kroll Thinking Buyback?
GAO Probing SEC on Conduct During Pequot Capital Investigation
SEC Fires Another Shot Across the Bow of the Mutual Fund Industry
Unipol CEO Amongst Convicted on Insider Trading Charges
IPOC Investigation Continues in Bermuda
Victor Fleischer Essay on Options Backdating, Tax Shelters and Corporate Culture
The Tortellini, A Blog on Law, Politics, etc.
Inspire to Expect SEC Lawsuit on Disclosure of Drug Approval Failure
Report Says Backdating Costs Billions
Comverse CFO Settles on Backdating Charges
Scrutiny Continues at HP Lawfirm, Wilson Sonsini
Ridiculously Cool: Enron Emails Searchable Online
Pequot Capital / Morgan Stanley Influence Scandal Continues at SEC
How P.I.s Can Help When Employees Leave with Confidential Data
Options Scandal Validates SarBox Reforms 10/20/2006
HP Had Me Surveilled For a Year
Even More Chinese Financial Scandal, Probe of Shanghai Boss Widens
More Chinese Financial Shenanigans
The Plaintiff Bar Hotlist
Ken Lay Un-Convicted...
The Option Backdating Ousted Executive Scorecard
Whew...One More for Today - Executives Bail at KLA-Tencor on Options Irregularities
Backdating Bites United Health Group
Options Backdating Woes Evicerate the C-Suite at Sapient
19 Government Agencies Have Lost Personal Data Since 2003
Chinese Fund Corruption Probe Leads to Investor Selloffs
Burrus is Coming...
P.I., Delia Told HP Execs that Pretexting Was Legal?
The Telegraph Covers Corporate Spooks (Politely, Thanks)
Warren Buffett on Ethics - In Short, He Suggests Having Them
Dropping Like Flies - Execs Bow Out in Options Backdating Brouhaha
White Collar Crook Does Time
Run-Down Of Options Backdaing Cases to Date
Flashers and Gropers Beware - NYC Has Launched "Operation Exposure"
Three P.I.s Plead Not Guilty in HP Case, Father of One Implicated P.I. Asks for Mercy
P.I. Hired to "Dig Dirt on God"? 10/10/2006
Inside an Imploding Company, A First-Person View of Veritasiti
On Assignment
HPs Hurd Cashed in Stock Options Prior to Pretexting Revelations
FTC Settles With Pretexting Firm, Still Chasing Four Others
Much Ado About Kobi Alexander
Dunn to be Indicted in HP Flap, Hurd So Far in the Clear
Lost Season Premiere
Hurd Knew at HP? Apparently...
Enron Lessons Learned?
Blowing off the Amaranth Meltdown
Business Week Devotes Cover Story to Corporate Investigators
Hard Times for Sonsini for his Role in HP Pretexting Flap
Quest Faces $400 Million Class Action Settlement
Cingular Sues P.I. in Connection with the HP Scandal
The Economist Chimes in On Pretexting in the Corporate World
Counterfeit Goods Scandal Hits North Louisiana
In Honor of Our Recent Trip, Check our The China Lawyer Blog
Electronic Bugaboo - iPod Slurping?
Daily Caveat Makes Top Ten Resources for Corporate Lawyers
Not sure how long this has been live out there, but I just discovered that The Daily Caveat has been named a top ten resource for corporate lawyers over at TopTenSources.com. This particular list was compiled by John Palfrey of the Berkman Center for Internet & Society at Harvard Law School.
Pretty cool all around - and really nice to be featured on a list with so many great peers, virtually all of which you can find in the links section to the right of this post. TopTenSources is a pretty neat tool. Various "Top Ten"s are compiled by topic and the posts from those blogs are aggregated there on the page in date order. Definitely worth a looksee.
Oh and, Mr. Palfrey maintains his own fine blog right here.
-- MDT
Pretty cool all around - and really nice to be featured on a list with so many great peers, virtually all of which you can find in the links section to the right of this post. TopTenSources is a pretty neat tool. Various "Top Ten"s are compiled by topic and the posts from those blogs are aggregated there on the page in date order. Definitely worth a looksee.
Oh and, Mr. Palfrey maintains his own fine blog right here.
-- MDT
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SarBox Opponents Readying Assault, SEC Chairman, Cox Gets Flack from Republican Brethern
And they've got friends at the top. Apparently the President is planning to "fine tune" (read: roll back) SarBox.
Meanwhile SEC Chair Chris Cox seems to feel SarBox has gone a long way towards creating an environment where corporations are coming clean voluntarily, noting that (Kobi Alexander notwithstanding) the SEC has seen unprecedented levels of cooperation in the recent stock option backdating scandal. Republican appointee, Cox, has even incurred the wrath of NRO which as you might image takes a hyperbolic dim view of Sarbanes Oxley.
If you care to voice your opinion, the SEC will be taking comments in December. But given that the nation's top securities regulator is itself under investigation for playing favorites when it comes to enforcement, look for them to remain aggressive well into the new year.
-- MDT
Meanwhile SEC Chair Chris Cox seems to feel SarBox has gone a long way towards creating an environment where corporations are coming clean voluntarily, noting that (Kobi Alexander notwithstanding) the SEC has seen unprecedented levels of cooperation in the recent stock option backdating scandal. Republican appointee, Cox, has even incurred the wrath of NRO which as you might image takes a hyperbolic dim view of Sarbanes Oxley.
If you care to voice your opinion, the SEC will be taking comments in December. But given that the nation's top securities regulator is itself under investigation for playing favorites when it comes to enforcement, look for them to remain aggressive well into the new year.
-- MDT
Labels: Morgan Stanley, Pequot Capital
More from Jules Kroll...On Pretexting, Databrokers, Etc.
Lots of stuff from Jules the last few days. Check out his further comments on pretexting (for phone records) and the under-fire data broker industry. A snippit:
Here's The Daily Caveat's take from back in January '06 on the whole phone records issue, which has frankly been brewing for many months. Also, some more recent thoughts on the recent HP debacle. We've covered the issue extensively so search the site for a plethora of related articles.
-- MDT
10/29/2006
“Data brokers have become a very big factor in the last ten years. They are in the business of obtaining data in any way they can. They are at least three or four steps down the food chain from us. It is a business we chose not to go into,” the Kroll chairman said.I couldn't agree more...
“Those people who are legitimate investigators and have followed the rules of the road over the last ten years have been greatly disadvantaged by these brokers.”
Mr Kroll believes that the data brokers are giving his industry a bad name, luring potential customers away from mainstream companies and exposing clients to illegal activity. “I think what you should see is federal legislation against these people,” he said.
Here's The Daily Caveat's take from back in January '06 on the whole phone records issue, which has frankly been brewing for many months. Also, some more recent thoughts on the recent HP debacle. We've covered the issue extensively so search the site for a plethora of related articles.
-- MDT
Jules Kroll on the HP Pre-Texting Fiasco
Speaking of Mr. Kroll... Here's an article well worth reading where he describes how he would have suggested handling HP's investigation of high-level leaks, had his firm been involved. Here's the best bit:
Read on, here.
-- MDT
"If you read Patty Dunn’s testimony to Congress, she recommended to her general counsel that he hire Kroll,” Mr Kroll says with a grin. “But he did not do that..."Ever the showman.
Read on, here.
-- MDT
Big News on the Horizon - Kroll Thinking Buyback?
Back in 2004, Kroll, the world's most prominent corporate investigative and security firm was acquired by mega-insurer, Marsh & McLennan, for a cool $2.billion. This was ironically, just in time for MMC's own explosive financial scandals, (you know, the sort of things that fuel bread and butter work for your friendly neighborhood corporate P.I).
Just two years later, there is scuttlebut that Kroll execs may be thinking about buying back ownership of the firm founded back in 1972 by former New York assistant district attorney, Jules Kroll. Ans this isn't the only talk about divestitures at MMC. Putnam Securities is already up for sale and there is talk that Marsh will end up being further dissected.
Anything happening at Marsh is big news in the business world. And anything happening at Kroll, well thats big news for investigators. So far Jules Kroll has personally denied that a buy-back in the works, but time will tell.
-- MDT
10/27/2006
Just two years later, there is scuttlebut that Kroll execs may be thinking about buying back ownership of the firm founded back in 1972 by former New York assistant district attorney, Jules Kroll. Ans this isn't the only talk about divestitures at MMC. Putnam Securities is already up for sale and there is talk that Marsh will end up being further dissected.
Anything happening at Marsh is big news in the business world. And anything happening at Kroll, well thats big news for investigators. So far Jules Kroll has personally denied that a buy-back in the works, but time will tell.
-- MDT
Labels: Kroll
GAO Probing SEC on Conduct During Pequot Capital Investigation
You don't mess with the GAO. I love those guys.
As The Daily Caveat discussed earlier this week, whether or not the SEC gave preferential treatment to Pequot's Samberg and Morgan Stanley's Mack is quite the touchy subject. Fired SEC eforcement officer, Gary Aguirre certainly thought so and so does Senator Charles Grassley, whose requests prompted the GAO investigation. More details here.
-- MDT
10/26/2006
As The Daily Caveat discussed earlier this week, whether or not the SEC gave preferential treatment to Pequot's Samberg and Morgan Stanley's Mack is quite the touchy subject. Fired SEC eforcement officer, Gary Aguirre certainly thought so and so does Senator Charles Grassley, whose requests prompted the GAO investigation. More details here.
-- MDT
Labels: Arthur Samberg, GAO, Gary Aguirre, Morgan Stanley, Pequot Capital
SEC Fires Another Shot Across the Bow of the Mutual Fund Industry
The SEC recently launched an investigation into 27 mutual fund firms in relation to alledged improper relationships with their administrative service providers (kickbacks, to you and me). Check out further details on the investigation here.
Also, here's a run down on the other trials (pun mildly intended) and tribulations currently facing the $10 trillion dollar U.S. mutual fund industry.
--MDT
Also, here's a run down on the other trials (pun mildly intended) and tribulations currently facing the $10 trillion dollar U.S. mutual fund industry.
--MDT
Unipol CEO Amongst Convicted on Insider Trading Charges
Unipol CEO, Giovanni Consorte, former vice president Ivano Sacchetti and company financier Emilio Gnutti were convicted this week in a Milan, Italy court in relation to insider trading at the Italian insurer. The insider trading charges stemmed from a 2002 bond buyback at the firm. While appeals are expected, the trio also face separate charges relating to another transaction.
Details here.
-- MDT
Details here.
-- MDT
Labels: insider trading
IPOC Investigation Continues in Bermuda
As the investigation into IPOC, a Bermuda-based investment firm, continues, all eyes have turned to Russia, where the tangled roots of financial scandal appear to lie. The Bermuda Royal Gazette has the (voluminous) details.
-- MDT
-- MDT
Labels: KPMG
Victor Fleischer Essay on Options Backdating, Tax Shelters and Corporate Culture
Check it out over at The Conglomerate, one of my favorite stops when the daily news gets slow or I need to actually learn about something other than the daily depths people will sink to to avoid prosecution (I'm looking at YOU, Kobi Alexander).
-- MDT
-- MDT
The Tortellini, A Blog on Law, Politics, etc.
The blog of Stephanie Mencimer, who is using it to promote her book Blocking the Courthouse Door which addresses the erosion of the right to sue in America. Looks interesting and I'll be checking it out over the next few weeks to see if it warrants a permanent spot in the blogroll. Not everyone is a big fan, and I guess you wouldn't expect the folks at Overlawyered to be one, in any event, but please surf over that way if you want your grain of salt.
Tort reform and I go way back, as I spent a few years working exclusively on investigations in product liability litigation for Safetyforum.com, a consumer safety consultancy. My general feeling is that criticisms of tort actions are largely overblown and that everyone wants to second guess the jury in a trial they didn't attend and based on evidence that they didn't hear. But hey, that's just based on my experience in dealing with hundreds of cases from the inside (and admittedly, also, the plaintiff side).
-- MDT
Tort reform and I go way back, as I spent a few years working exclusively on investigations in product liability litigation for Safetyforum.com, a consumer safety consultancy. My general feeling is that criticisms of tort actions are largely overblown and that everyone wants to second guess the jury in a trial they didn't attend and based on evidence that they didn't hear. But hey, that's just based on my experience in dealing with hundreds of cases from the inside (and admittedly, also, the plaintiff side).
-- MDT
Inspire to Expect SEC Lawsuit on Disclosure of Drug Approval Failure
While the SEC isn't talking about the possibility of an investigation into drug developer, Inspire, the company admitted earlier this week that it had received notice that the securities regulator was mulling a lawsuit relating to Inspire's disclosures about a recent drug trial. Inspire first discussed the possibility of an investigation in September '05. Also expected to be targets of an SEC suit are Inspire's Chief Executive Officer Christy Shaffer and Vice President of Operations and Communications Mary Bennett
-- MDT
10/25/2006
-- MDT
Report Says Backdating Costs Billions
Ten of them, actually, over 152 companies implicated in stock option irregularities thus far. So far 44 executives and directors from 24 of these firms have resigned. That leaves what, 120 some odd firms left to go. Details here.
-- MDT
-- MDT
Comverse CFO Settles on Backdating Charges
Despite all the ink spilled on Comverse's runaway CEO, Kobi Alexander, there were other executives facing charges in that firm's stock options backdating irregularities. Former Comverse CFO, David Kreinberg has made his peace with regulators and negotiated a settlement. Along with a guilty plea, Kreinberg will no doubt receive a sentence that is more Fastow than Skilling, provided of course that he testified against Alexander when he finally makes it back to the states to stand trial.
-- MDT
-- MDT
Labels: Andy Fastow, Comverse, Kobi Alexander
Scrutiny Continues at HP Lawfirm, Wilson Sonsini
Silicon Valley's most prominent defense firm, Wilson Sonsini has been in the cross-hairs since the revelations of HP's pretexting tactics in the course of an internal leak investigation first hit the papers. Given that several WS clients have also come down with stock option problems, questions regarding how well the firm oversees the work conducted and advice given by of its attornies have continued.
-- MDT
10/24/2006
-- MDT
Labels: HP
Ridiculously Cool: Enron Emails Searchable Online
Highly appropriate based on this week's resurgence of Enron-related news --> Want a window into the disintegration of the company that perpetrated one of the great corporate frauds of all time?
Check out this amazing resource, Trampoline's Enron Explorer which contains a searchable, graphically relatable database of all the emails flitting about Enron revealed in the course of the investigation into the energy trader. You can seach globally on full text or sort by individual and then drill down or even render a web of their contacts with others (not unlike the sadly seldom updated They Rule - another site you really must visit if you have never seen it).
Found at the always entertaining (and no certainly need of link-backs from little ol' me) blogging all-star, BoingBoing.
-- MDT
10/22/2006
Check out this amazing resource, Trampoline's Enron Explorer which contains a searchable, graphically relatable database of all the emails flitting about Enron revealed in the course of the investigation into the energy trader. You can seach globally on full text or sort by individual and then drill down or even render a web of their contacts with others (not unlike the sadly seldom updated They Rule - another site you really must visit if you have never seen it).
Found at the always entertaining (and no certainly need of link-backs from little ol' me) blogging all-star, BoingBoing.
-- MDT
Labels: database, Enron, EnronExplorer
Pequot Capital / Morgan Stanley Influence Scandal Continues at SEC
It as been a while since we had an update on the insider trading allegations that continue to surround Morgan Stanley CEO, John Mack and hedge fund, Pequot Capital (details here). The SEC itself has been taking some heat relating to the case, due to the comments of former SEC enforcement officer, Gary Aguirre, who has asserted that he was disuaded (and ultimately fired by his bosses) when it came time to interview Mack.
Aguirre had named Mack as the key individual in tipping off Pequot founder and Mack personal friend Arthur Samburg regarding General Electric's acquisition of Heller Capital, the transaction to which the insider trading charges pertain. The heat on the SEC doesn't appear to have dissipated one iota, with the release of new documents detailing the process of the agency's investigation as well as their handling of Aguirre's departure. Very interesting reading.
Amongst the most disturbing revelations - Samburg uses emoticons in business correspondence. Six smiley faces? Egads.
-- MDT
Aguirre had named Mack as the key individual in tipping off Pequot founder and Mack personal friend Arthur Samburg regarding General Electric's acquisition of Heller Capital, the transaction to which the insider trading charges pertain. The heat on the SEC doesn't appear to have dissipated one iota, with the release of new documents detailing the process of the agency's investigation as well as their handling of Aguirre's departure. Very interesting reading.
Amongst the most disturbing revelations - Samburg uses emoticons in business correspondence. Six smiley faces? Egads.
-- MDT
Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital
How P.I.s Can Help When Employees Leave with Confidential Data
Follow the link for a bit of free legal advice via the New Zealand Herald where Rani Amarnathan of the law firm Phillips Fox discusses how to handle suspicions that a recently delarted employee may have taken more than their tchotchkes and family photos with them when they packed up their desk. You'll see recommended roles for P.I.s, data recover experts, your legal team and (possibly) law enforcement.
-- MDT
-- MDT
Options Scandal Validates SarBox Reforms 10/20/2006
HP Had Me Surveilled For a Year
So says financial reporter Pui Wing Tam in today's Wall Street Journal. Read it online now, before it disappears behind the webwall.
-- MDT
-- MDT
Labels: HP
Even More Chinese Financial Scandal, Probe of Shanghai Boss Widens
This story was actually breaking while I was in China just a few weeks back. More than 100 investigators are currently on task in Shanghai delving into the scandal surrounding ousted, Chen Liangyu, Shanghai's ranking Communist party official. At issue are suspected missapropriations from China's $670 pension fund to make illegal loans and investments. Scandal? For sure? Politics as usual? Why yes indeed. Read on in this Independent article to find out how all this fits into President Hu Jintao attempts to consolidate power.
-- MDT
10/19/2006
-- MDT
Labels: China
More Chinese Financial Shenanigans
Well OK, they are technically Taiwanese shenanigans - just bear with me, please...
Apparently investigators have raided the corporate offices as well as the homes of key executives of Chinatrust Financial Holdings. As issue is potentially suspect accounting relating to CFH's takover bid for Mega Holding (possible the best name ever). Several Chinatrust executives are also currently be held by authorities in relation to the investigation.
Mega Holding has a response up online regarding the ongoing investigation and you can read it here. The Chinatrust website is mum on the subject.
-- MDT
Apparently investigators have raided the corporate offices as well as the homes of key executives of Chinatrust Financial Holdings. As issue is potentially suspect accounting relating to CFH's takover bid for Mega Holding (possible the best name ever). Several Chinatrust executives are also currently be held by authorities in relation to the investigation.
Mega Holding has a response up online regarding the ongoing investigation and you can read it here. The Chinatrust website is mum on the subject.
-- MDT
The Plaintiff Bar Hotlist
Courtesy of friend of The Daily Caveat, Adam Savett, whose blog Lies, Damn Lies and Forward Looking Statements you should be reading - The Plaintiff Bar hotlist as decreed by The National Law Journal (long time readers of this space will recall that your humble spent a lot of time working with the plaintiff bar, both in the product liability arena and with regards to securities litigation).
Check out Adam's worthy annotations on the listed firms and for further details, click on through from his post to the full NLJ piece.
-- MDT
10/18/2006
Check out Adam's worthy annotations on the listed firms and for further details, click on through from his post to the full NLJ piece.
-- MDT
Ken Lay Un-Convicted...
Yes, yes... Mr. Lay is deceased and would not be able to avail himself of the full appeals process guaranteed under law. In erasing Lay's conviction, Judge Sim Lake cited a a 5th US Circuit Court of Appeals ruling from 2004 in which a defendant's death pending appeal invalidated his entire case because he had not had a full opportunity to challenge the conviction. But jeez... Is this the kind of outcome we want:
Read more here, via The Washington Post.
-- MDT
10/17/2006
"Regulators at the Securities and Exchange Commission still may pursue their civil case against Lay's estate, but their task will be more difficult because they can no longer introduce the fact of his conviction and instead must prove again, in a resource-intensive trial, that he broke the law. The SEC case has been stayed pending resolution of the status of Lay's criminal conviction. The agency's five commissioners must decide in the weeks to come whether to proceed against Lay's estate."Criminy! The law is a cruel mistress!
Read more here, via The Washington Post.
-- MDT
The Option Backdating Ousted Executive Scorecard
Whew...One More for Today - Executives Bail at KLA-Tencor on Options Irregularities
In Sapient-esq style, a founder, board member and the firm's GC were all cut loose in relation to backdating. Read it here.
--MDT
--MDT
Labels: KLA-Tencor
Backdating Bites United Health Group
United Health has announced a parting of the ways with CEO William McGuire. Accompanying McGuire in his departure are William G. Spears, a company directory who was responsible for executive compensation oversight and United Health General Counsel, David J. Lubben. The departure news comes as word gets out that option dating at UHG was likely manipulated for the benefit of certain executives.
The details, here.
-- MDT
The details, here.
-- MDT
Options Backdating Woes Evicerate the C-Suite at Sapient
CEO, Jerry Greenberg, and interim CFO, Susan Cook, have both resigned from e-services consultancy, Sapient in relation to the firm's ongoing investigation into options backdating irregularities. Co-Chair (with Greenberg) and Sapient co-founder, Stuart J. Moore also stepped down from his chairmanship.
More here.
-- MDT
More here.
-- MDT
19 Government Agencies Have Lost Personal Data Since 2003
Even though data breaches are so, like, last summer, and we've moved through hedge fund corruption and on to pretexting or options backdating as the hot button business page issues of the day, this story is worth noting. The House Government Reform Committee report released on Friday reports that since 2003, 19 U.S. Government agencies have reported at least one incident in which personal identifying information has slipped out of their possession. But - and here's the kicker - many of the agencies have reported hundreds of such incidents and the individual incidents themselves have porentially exposed millions:
-- MDT
"Taken as a whole, the agency reports outline hundreds of instances of data breaches involving sensitive personal information since January 1, 2003," the report said. "The reports show a wide range of incidents, involving employee carelessness, contractor misconduct, and third-party thefts."And the good news is....this information is still at risk with no great improvements in data security or procedures on the horizon. Check out the full story here, via Computerworld.
The number of individuals affected in each incident ranges from one to millions, but in many cases the agencies don't know what information was lost or how many individuals potentially could be affected, the report said. Only a few of these incidents have been reported publicly, and it's unclear in many cases whether affected individuals have been notified or whether remedial action has been taken, according to the report.
-- MDT
Chinese Fund Corruption Probe Leads to Investor Selloffs
It was announced today that the general manager of China's $40 billion Huaan Fund Management, Han Fanghe, was detained by Chinese law enforcement officials in relation to corruption charges. The Huaan Fund is a local partner of Lehman Brothers and a leader in the burgeoning Chinese investment market.
Han Fanghe is thought to be involved in a long-running scheme to steal money from China's social security program. Several other individuals have also been snagged by the government over the last few months in relation to the investigation.
More details here.
-- MDT
10/16/2006
Han Fanghe is thought to be involved in a long-running scheme to steal money from China's social security program. Several other individuals have also been snagged by the government over the last few months in relation to the investigation.
More details here.
-- MDT
Burrus is Coming...
James Burrus is described in a recent San Francisco Chronicle article as "the nation's top corporate crime fighter." The description is apt, considering that Burrus heads up the criminal division of the FBI and has long taken a...stern...tone regarding corporate fraud. And options backdaters? He's comin' for ya.
More on Burrus and backdating here, via the Chron.
-- MDT
More on Burrus and backdating here, via the Chron.
-- MDT
P.I., Delia Told HP Execs that Pretexting Was Legal?
The Telegraph Covers Corporate Spooks (Politely, Thanks)
Quite a good article, here, from The Telegraph - for whatever reason the UK press always takes a more educated and friendly tone when reporting on corporate P.I.s. In this case the two firms featured are Diligence and Kroll in a discussion of the new due diligence recommendation currently being drafted for London's AIM stock exchange.
I highly recommend you give it a look, for another side of the P.I. world, one that you won't get from the endless permutations of the HP scandal being turned over elsewhere in the business pages (not that Diligence or Kroll have entirely sterling choirboy-like reputations, mind you, but lets focus on the positive).
As the article makes clear, both firms have found great success in doing great and subtle work on their clients' behalf - work that falls well within the bounds of the law and adds great value to the business process by enhancing the information available for decisionmaking and ensuring transparency in business transactions.
Thomas Helsby, who heads up a bundle of Kroll's international operations describes it quite eloquently in the article:
-- MDT
10/12/2006
I highly recommend you give it a look, for another side of the P.I. world, one that you won't get from the endless permutations of the HP scandal being turned over elsewhere in the business pages (not that Diligence or Kroll have entirely sterling choirboy-like reputations, mind you, but lets focus on the positive).
As the article makes clear, both firms have found great success in doing great and subtle work on their clients' behalf - work that falls well within the bounds of the law and adds great value to the business process by enhancing the information available for decisionmaking and ensuring transparency in business transactions.
Thomas Helsby, who heads up a bundle of Kroll's international operations describes it quite eloquently in the article:
"What we do isn't secret, it is not even unique. At its most fundamental we deal with problems and opportunities, such as supporting lawyers in civil litigation cases. We investigate internal fraud and corruption. We may be working to recover assets or money obtained in a judgment..."There are only two ways information comes to you – through your ears and through your eyes. You ask, 'Who is going to know the information I am looking for and what is the basis on which he can reasonably share it with me?' Most of the time there is someone who knows who has a good reason to share it with you. It is about working out who they are, where they are, and the best way to talk to them."Read on.
-- MDT
Warren Buffett on Ethics - In Short, He Suggests Having Them
On September 27, America's most prominent investor, Warren Buffet circulated a memo on corporate ethics amongst top Berkshire Hathaway execs. Excerpts can be found here.
-- MDT
10/11/2006
-- MDT
Dropping Like Flies - Execs Bow Out in Options Backdating Brouhaha
The CEOs of McAffee, CNET and Monster.com have decided to bow out in the face of investigation into the firms' options backdating practices.
Must be getting pretting hot in the ol' kitchen.
-- MDT
Must be getting pretting hot in the ol' kitchen.
-- MDT
White Collar Crook Does Time
Ellen Podgor, one of the co-anchors of the White Collar Crime Prof. Blog, has details on the sentencing of Arthur Goodwin, the former Senior Vice President of worldwide sales at Interspeed, Inc. He's scheduled to serve two and a half years on a variety of securities and wire fraud related charges.
More on the sentencing here.
And for more information on the case against Goodwin and other former Insterspeed execs check out the SEC's case notes.
-- MDT
More on the sentencing here.
And for more information on the case against Goodwin and other former Insterspeed execs check out the SEC's case notes.
-- MDT
Run-Down Of Options Backdaing Cases to Date
The latest additions are to be found at Bruce Carton's always reliable Securities Litigation Watch.
-- MDT
-- MDT
Flashers and Gropers Beware - NYC Has Launched "Operation Exposure"
So keep your bits and busy hands to yourself or face the (no doubt unpleasant) consequences.
Via the Crime Prof Blog.
-- MDT
Via the Crime Prof Blog.
-- MDT
Three P.I.s Plead Not Guilty in HP Case, Father of One Implicated P.I. Asks for Mercy
Three investigators, Ronald DeLia of Security Outsourcing Solutions Inc., Matthew DePante of Action Research Group Inc., and Bryan Wagner of Colorado have all plead not guilty on charges relating to their role in the HP pretexting investigation. Alongside former HP chairman Patricia Dunn and former ethics chief, Kevin Hunsaker the three investiators bring the total number charged in the case to five.
Melbourne Australia-based P.I., Joseph Depante, for his part, has asked for charges to be dropped against his son Matthew, who apparently acted as a contractor in HP's "Kona II investigation" headed up by Gary DeLia of Boston-area P.I. firm Security Outsourcing Solutions. Depante suggested that his son should not be charged because he was acting under the authority of the DeLia's group. Depante also claimed no knowledge of the pretexting tactics employed by HP's agents:
-- MDT
Melbourne Australia-based P.I., Joseph Depante, for his part, has asked for charges to be dropped against his son Matthew, who apparently acted as a contractor in HP's "Kona II investigation" headed up by Gary DeLia of Boston-area P.I. firm Security Outsourcing Solutions. Depante suggested that his son should not be charged because he was acting under the authority of the DeLia's group. Depante also claimed no knowledge of the pretexting tactics employed by HP's agents:
“We had no idea Hewlett-Packard was involved in any of this,” Joseph DePante said Monday. “We were strictly working for DeLia. We are licensed private investigators, but we also provide information and skip-trace work to other companies and entities. We work with a lot of different sources, and those sources work with different investigators.”More from DePante here.
-- MDT
Labels: Bryan Wagner, HP
P.I. Hired to "Dig Dirt on God"? 10/10/2006
Inside an Imploding Company, A First-Person View of Veritasiti
For today, check out this post, My Own Private Enron at PopMatters, which details what a company (film rating firm Veritasiti) looks like from the inside, as it implodes. You can get an idea, then, why investigators usually end up with no shortage of people willing to dish on the wrong done at their old jobs...or by their old bosses.
And more Veritasiti rants, here at the delightfully salacious JobVent.
-- MDT
And more Veritasiti rants, here at the delightfully salacious JobVent.
-- MDT
Labels: Enron
On Assignment
The Daily Caveat is on assignment this week in Orlando, Florida, just a few hundred yards from the happiest place on earth. I'll be playing booth-monkey for a few days but posts here should still trickle in, morning or evening.
-- MDT
10/08/2006
-- MDT
HPs Hurd Cashed in Stock Options Prior to Pretexting Revelations
This is not exactly great news for Hewlett Packard CEO, Mark Hurd, who had thusfar skirted personal legal trouble in relation to the leak investigation and ensuing scandal that have already claimed the career of former HP Chairman of the Board Patricia Dunn. Hurd and seven other HP execs had the fortuitous timing to cash in their stock options ahead of public disclosure of Dunn's catastrauphically ill advised leak-busting tactics.
More on the story and what it might mean for Hurd, here.
-- MDT
10/06/2006
More on the story and what it might mean for Hurd, here.
-- MDT
Labels: HP
FTC Settles With Pretexting Firm, Still Chasing Four Others
The FTC has settled a May 2006 complaint against Virginia-based Integrity Security & Investigation Services Inc. relating to the firm obtaining private phone records for sale to third parties. ISIS's chief executive, Edmund Edmister was also charged with obtaining and selling financial records. Four other mentioned in the complaint are continuing to combat the FTC charges.
More here.
-- MDT
More here.
-- MDT
Much Ado About Kobi Alexander
Susan Lerner at the Jerusalem Post speaks out in defense of Comverse's Kobi Alexander (our favorite former on-the-lam accused white collar criminal), decrying the whole options scandal mess as "not nice" but "not illegal." Kobi is, by the way, out on bail. But if Lerner's point is to be taken seriously, (and she's not the only one doing rep rehab on Alexander right now) the question is not why was Alexander, among other Comverse execs, accused of wrongdoing but rather - why did he run?
Despite Dealberaker's linkbait headline, Apple's Steve Jobs is not going to do time in relation to that company's options probe, although a former CFO of the firm was asked to leave the board. So if there is a defensible - not nice but not illegal - explanation for the contuct of executives at Comverse, trial or even pre-trial is probably the best place to air that out, rather than via emails and sat-phone calls from far flung global hideaways. Dontcha think?
All that said, Alexander apparently plans a not guilty plea. No word on how allegations that he tried to bribe another Comverse exec to take the fall for him will figure in to that, if at all. Extradition, also, is not exactly going to be a quick thing. For my part, well, selfishly I hope Kobi, now that he's again walking the streets, gets the urge to stretch those legs again and head out for the endless vistas with the wind at his back, and global law enforcement on his heels.
-- MDT
10/04/2006
Despite Dealberaker's linkbait headline, Apple's Steve Jobs is not going to do time in relation to that company's options probe, although a former CFO of the firm was asked to leave the board. So if there is a defensible - not nice but not illegal - explanation for the contuct of executives at Comverse, trial or even pre-trial is probably the best place to air that out, rather than via emails and sat-phone calls from far flung global hideaways. Dontcha think?
All that said, Alexander apparently plans a not guilty plea. No word on how allegations that he tried to bribe another Comverse exec to take the fall for him will figure in to that, if at all. Extradition, also, is not exactly going to be a quick thing. For my part, well, selfishly I hope Kobi, now that he's again walking the streets, gets the urge to stretch those legs again and head out for the endless vistas with the wind at his back, and global law enforcement on his heels.
-- MDT
Labels: Comverse, Kobi Alexander
Dunn to be Indicted in HP Flap, Hurd So Far in the Clear
According to the latest from the NYT, California's Attorney General is planning charges against former board of directors chairman, Patricia Dunn for her role in the HP pretexting scandal. Four other will also reportedly face charges, although it does not appear that CEO Mark Hurd will be among them.
More here, via Reuters.
-- MDT
More here, via Reuters.
-- MDT
Labels: HP
Lost Season Premiere
Whoah! And....whah? One hour wasn't long enough.
-- MDT
-- MDT
Hurd Knew at HP? Apparently...
Enron Lessons Learned?
Many have compteted over the last few years to write the tale of Enron's legacy for America's business community and the economy at large. Andrew Weissmann, the former director of the Department of Justice's Enron Task Force and a partner in the New York office of Jenner & Block has offered the benefit of his experience at Law.com. His feeling? Compliance is catching on as good business:
-- MDT
..."good business dictates good compliance. Even the hint of scandal can send the price of a company's stock plummeting. Academic reports are showing a correlation between compliance and stock price: Corporations that perform effective checks on their internal controls actually outperform those with weak internal systems. Moreover, an effective ethics and compliance system is the best means to prevent a scandal from occurring in the first place. As a board member observed at a recent ethics and governance training session I conducted, the lesson he learned was that "managing" a major corporate scandal is an oxymoron, and consequently the best solution is preventing it from ever happening."More good here.
-- MDT
Labels: Andrew Weissmann, Enron
Blowing off the Amaranth Meltdown
These are the things you miss while on vacation... But, it looks like the whole situation hasn't made much of an impression on Wallstreet, at least according to Fortune Magazine's editor in Chief, Andrew Serwer. Check out his thoughts here, via CNN Money.
Meanwhile, John Carney at Dealbreaker has another (potentially) troubled hedge fund in his sights.
-- MDT
10/03/2006
Meanwhile, John Carney at Dealbreaker has another (potentially) troubled hedge fund in his sights.
-- MDT
Business Week Devotes Cover Story to Corporate Investigators
Haven't read it yet, but wanted to link it here.
Will get around to it this evening and comment further...
-- MDT
Will get around to it this evening and comment further...
-- MDT
Hard Times for Sonsini for his Role in HP Pretexting Flap
Larry Sonsini, Silicon Valley's go-to guy for securities defense (his firm represents nearly half of the technology companies in the valley) is facing harsh criticism for his connection to the recent HP scandal. Check out this quite interesting article from the San Francisco Chronicle which how Sonsini became one of the fathers of Silicon Valley and how Wilson Sonsini became the legal kings of the valley.
-- MDT
-- MDT
Labels: HP
Quest Faces $400 Million Class Action Settlement
The settlement was approved on Friday in a Denver court. Quest executives Joe Nacchio and Robert Blackburn were not included in the settlement and will likely pursued separately by investors.
More here.
-- MDT
10/02/2006
More here.
-- MDT
Labels: Joe Nacchio, Quest
Cingular Sues P.I. in Connection with the HP Scandal
Cingular has sued Charles Kelly and his firm, CAS Agency, Inc. of Carrolton, Georgia in connection with the HP corporate pretexting scandal. Cingular's case follows asimilar movefrom Verizon just a few days ago. Cingular and Verizon charge that agents of CAS improperly obtained customer data.
And they want it back...
More here.
-- MDT
And they want it back...
More here.
-- MDT
Labels: HP
The Economist Chimes in On Pretexting in the Corporate World
A tad dated, due to my being away for a few weeks, but still well worth reading. I'll have to get caught up on the HP situation myself, and I'm going to start by reading this, this and this.
-- MDT
-- MDT
Labels: HP
Counterfeit Goods Scandal Hits North Louisiana
And conveniece stores all over the north-eastern part of the state have been put on notice, including in The Daily Caveat's sleepy hometown of Ruston, LA. Not a lot of details in the New Star World piece, but the local U.S. Attorney has this to say:
-- MDT
U.S. Attorney Donald W. Washington said the charges included trafficking in counterfeit goods, money laundering, making false statements to a federal agent, false representations and use of a Social Security account number, operating an unlicensed money transmitting business and forfeiture.More here.
-- MDT
Labels: Louisiana, money laundering
In Honor of Our Recent Trip, Check our The China Lawyer Blog
Good stuff here, from Dr. Lee Weidong.
Makes me nostalgic for the South China Morning Post, or WSJ Asia. And Dim sum...oh yes, dim sum.
-- MDT
Makes me nostalgic for the South China Morning Post, or WSJ Asia. And Dim sum...oh yes, dim sum.
-- MDT
Labels: China
Electronic Bugaboo - iPod Slurping?
Ziff Davis has the White Paper (must provide an email address):
-- MDT
In this white paper, we explore how the uncontrolled use of portable storage devices such as iPods, USB sticks, flash drives and PDAs, coupled with data theft techniques such as ‘pod slurping,’ can lead to major security breaches.More here.
-- MDT
