Unrelated to the story, there is a dead comment on this thread. It looks like it was written by a racist bot? What? Why is somebody paying money to do this?
Something Search [TempleOS] for more than you want to know. The author has a long history.
Why I Did Not Go To Jail
21–30 of 195 posts
Re: Why I Did Not Go To Jail
#22I really enjoyed reading this story. Now imagine being in this situation if you don't have a Jordan: you've got this super reputable head of finance who implemented this great option granting process at another huge company (PwC in this case) that was approved by their accounting team, how do you figure out if the process is legit? Where do you find people like Jordan?
The accounting practice was not implemented at PwC. Mercury Interactive, then a client of PwC, is the "huge company" in question. PwC simply approved of it.
Re: Why I Did Not Go To Jail
#23This might be a naive viewpoint, but I don't see how this could be viewed as legal. If I as a retail investor in equity or equity options in a company was approached by my broker and asked what day in the past I would like to use for my cost basis calculation, that would sound pretty fishy. Why should it be different for inside holders?
Re: Why I Did Not Go To Jail
#24I found more info on the CFO here: http://www.sec.gov/litigation/litreleases/2009/lr20964.htm >Abrams [the CFO in Ben's article] Also to be Barred from Serving as an Officer and Director of a Public Company I wonder what people who get caught up in these sort of things do afterwards?
Probably consultancy, there is always a need for executive consultants.
Re: Why I Did Not Go To Jail
#25First, when we started the company, Marc and I agreed that the company’s General Counsel would always report directly to me. This is different than in many technology companies where the General Counsel reports to the Chief Financial Officer. This needs to be in bold 72-point font. Corporate behaviour aligns with corporate structure, and if the General Counsel is subordinate to the Chief Financial Officer, complying…
What's the supposed rationale for the General Counsel reporting to the CFO in the first place? Isn't a General Counsel supposed to be "general" and not only concerned with financial issues?
Re: Why I Did Not Go To Jail
#26A relevant litigation release: http://www.sec.gov/litigation/litreleases/2009/lr20964.htm And a description of the practice in question: http://en.wikipedia.org/wiki/Options_backdating
From reading the first release, it sounds like the penalties imposed was for more than just the stock options thing described by Horowitz. It also describes fraudulent disclosures about backlog of sales and structuring fraudulent loans. So it's not necessarily the case that Horowitz would have had to serve jail time if he had gone along with his cfo's proposal (although he would likely have had to pay back his gains and possibly fines).
When I first read the blog, it certainly sounded like the SEC being overly harsh over a mistake made by a good CFO. But reading the release makes me think there was more to it than that. It's possible this is the reason why that excerpt wasn't published in his book.
Re: Why I Did Not Go To Jail
#27or "How I Hired a White Collar Criminal And Avoided Jail"
"On May 31, 2007, the Commission charged Abrams and three other former senior Mercury officers with perpetrating a fraudulent and deceptive scheme from 1997 to 2005 to award themselves and other Mercury employees undisclosed, secret compensation by backdating stock option grants and failing to record hundreds of millions of dollars of compensation expense. The Commission's complaint alleges that during this period certain of these executives, including Abrams, backdated stock option exercises, made fraudulent disclosures concerning Mercury's "backlog" of sales revenues to manage its reported earnings, and structured fraudulent loans for option exercises by overseas employees to avoid recording expenses." -- http://www.sec.gov/litigation/litreleases/2009/lr20964.htm
"Federal prosecutors obtained an indictment against Abrams in 2008 for income tax evasion and aiding in the preparation of false tax returns." -- http://www.reuters.com/article/2010/09/09/mercury-plea-idUSN...
Calling these "mistakes" is highly disingenuous.
Re: Why I Did Not Go To Jail
#28I really enjoyed reading this story. Now imagine being in this situation if you don't have a Jordan: you've got this super reputable head of finance who implemented this great option granting process at another huge company (PwC in this case) that was approved by their accounting team, how do you figure out if the process is legit? Where do you find people like Jordan?
[deleted]
Re: Why I Did Not Go To Jail
#29> Why I did not go to jail
Summary: I ran an accounting decision that worried me past my excellent lawyer.
This makes me wonder, as someone with little legal experience, how can we find lawyers who are truly great at what they do?
Re: Why I Did Not Go To Jail
#30Just as it's hard to tell if someone's a good coder without yourself being a good coder, it's hard to tell if an attorney or financial expert is giving you good advice without seeking for yourself a basic understanding of the legal or financial issues. A good attorney or financial expert will help you understand the issues enough for yourself to see why their evaluation makes sense. It's not good enough to just compl…
>Always do and trust own analysis (with an attorney or expert you trust when needed) instead of falling for the lure of "it's fine with these other experts so it should be fine for us." I think the problem arises when you're a CEO/Executive of a company and don't have time to do this yourself.
If someone doesn't have time to make sure the company has a legally compliant options policy, they don't have time to be the CEO.