Former Nortel Execs Await Corporate Fraud Ruling 59
An anonymous reader writes "Three former Nortel executives accused of orchestrating a widespread multimillion-dollar fraud will learn their fate in Toronto on Monday, nearly a year after one of the largest criminal trials in Canada's corporate history began. Ontario Superior Court Justice Frank Marrocco is set to rule on whether ex-CEO Frank Dunn, ex-CFO Douglas Beatty and ex-controller Michael Gollogly manipulated financial statements at Nortel Networks Corp., between 2002-2003. The men, who each face two counts of fraud, are accused of participating in a book-cooking scheme designed to trigger $12.8 million in bonuses and stocks for themselves at the once powerful Canadian technology giant."
One of the execs (Score:5, Interesting)
One of the execs got rid of ALL of their stock two days before it tanked.
Now, if your daughter is going to start at an Ivy League school and you need a few hundred grand, that may just be co-incidence.
But I don't think that happened.
Re:One of the execs (Score:5, Funny)
Of course its just coincidence.
We should free these poor, innocent and, more importantly, rich men and pay them $450 million each of taxpayer money to compensate for the terrible suffering and stain of reputation that the legal system have wrought upon them.
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Re:One of the execs (Score:5, Funny)
http://www.youtube.com/watch?v=fb3uCCjH9G0 [youtube.com]
The Crimson Permanent Assurance sails again.
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You taking a page out of Mulroney's book?
Joke of the day: he got to *keep* the 30M.
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Of course its just coincidence.
We should free these poor, innocent and, more importantly, rich men and pay them $450 million each of taxpayer money to compensate for the terrible suffering and stain of reputation that the legal system have wrought upon them.
It's our (the people, through its representatives) job to show that it was not a coincidence. The onus is, as it should be, on the accuser.
And yes, if we cannot do that, we should indeed compensate them for the ten years they've gone through, whether we think they did it or not, and no matter what our loathing is for money grabbing suits. We must not allow Justitia to uncover her eyes and become biased - it's never worth it.
I hope that everyone that's guilty is found guity, and given the appropriate sente
Re:One of the execs (Score:5, Interesting)
Re:One of the execs (Score:4, Insightful)
Shame about all the people who used to work for the company who lost their pensions too because it was mostly invested in Nortel stock.
Still you should be thankful as you live out your last years in a trailer that the problem of over regulation by the government is being valiantly fought over by Fox news and the WSJ.
Unfettered wealth creation by the super rich for the super rich should never be held back!
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Re:One of the execs (Score:4, Interesting)
It's a shame for them but putting the majority of your savings into a single stock is an incredibly risky thing to do.
If you drive without your seatbelt on and someone crashes into you and you get seriously hurt, the guy may comfort himself all day long that he won't get all the blame for your injuries, but that won't let him off the hook completely anyway.
Re:One of the execs (Score:5, Insightful)
If Aaron Swarts can be threatened with 30 years and massive fines for essentially a victimless crime...
Re:One of the execs (Score:4, Insightful)
I don't know what the odds of this are in Canada, but in the U.S. the odds of corporate execs being held accountable are almost nil.
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I don't know what the odds of this are in Canada, but in the U.S. the odds of corporate execs being held accountable are almost nil.
The odds are actually worse in Canada. See: this Nortel case taking an entire decade before it even came to trial. Or the various securities and similar ombudsmen in Canada that always accept a small fine instead of going to court (which could potentially land a businessperson in jail).
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I don't know what the odds of this are in Canada, but in the U.S. the odds of corporate execs being held accountable are almost nil.
Hello from the future. They were acquitted [ctvnews.ca] of all charges.
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A bit of good ol'-fashioned jail-time would be nice too. Unfortunately other things such as flogging etc aren't allowed these days.
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A bit of good ol'-fashioned jail-time would be nice too. Unfortunately other things such as flogging etc aren't allowed these days.
Bring back the stockades [knightsedge.com]!
Re:One of the execs (Score:5, Interesting)
Canada has a prime minister, last time I checked.
The individual campaign contribution limit in Canada is $1000. Corporate and union campaign contributions are illegal, and all lobbyists must be registered as such. Transfers from trust funds etc are illegal.
Our Federal election campaigns are 6 weeks long and politicians go into debt to finance them. Campaign spending is limited by law. If you spend more than the limit, you could have your seat taken from you and a by-election called.
Re:One of the execs (Score:4, Interesting)
As an American, that sounds like the best thing ever. More and more, Canada does seem like a nice alternative in many respects.
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As an American, that sounds like the best thing ever. More and more, Canada does seem like a nice alternative in many respects.
American elections law has teeth, though. In Canada if you robocall people illegally and get caught, Elections Canada will settle for $1000 (statutory max of $1000 per incident).
In America, if you robocall people illegally and get caught, you go to court, and the judge will hit you with $100 per incident. Times tens of thousand of illegal calls equals $1,000,000.
Some American states do have corrupt governors sometimes, but once the governors are out of office they tend to end up in prison.
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As an American, that sounds like the best thing ever. More and more, Canada does seem like a nice alternative in many respects.
American elections law has teeth, though. In Canada if you robocall people illegally and get caught, Elections Canada will settle for $1000 (statutory max of $1000 per incident).
In America, if you robocall people illegally and get caught, you go to court, and the judge will hit you with $100 per incident. Times tens of thousand of illegal calls equals $1,000,000.
Some American states do have corrupt governors sometimes, but once the governors are out of office they tend to end up in prison.
Given the budget for campaigns, both punishments seem like not even a slap on the wrist. More along the lines of something they could bake into the campaign budget.
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As an American, that sounds like the best thing ever. More and more, Canada does seem like a nice alternative in many respects.
American elections law has teeth, though. In Canada if you robocall people illegally and get caught, Elections Canada will settle for $1000 (statutory max of $1000 per incident).
In America, if you robocall people illegally and get caught, you go to court, and the judge will hit you with $100 per incident. Times tens of thousand of illegal calls equals $1,000,000.
Some American states do have corrupt governors sometimes, but once the governors are out of office they tend to end up in prison.
Meh. Not always. Citation: https://en.wikipedia.org/wiki/Alaska_Public_Safety_Commissioner_dismissal [wikipedia.org]
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The individual campaign contribution limit in Canada is $1000.
Unless you engage in one of the loopholes. Donations of less than $200 don't get reported, so just donate $200 in each of the 300+ ridings across the country. That's more than $1000 (though you don't get the generous tax deduction).
and all lobbyists must be registered as such.
Except when they aren't (which is sadly too often), especially when the lobbyist is a recent politician (which is supposed to be illegal). Worst case? The relevant commissioner has them write an apology letter. Boo-hoo.
Our Federal election campaigns are 6 weeks long and politicians go into debt to finance them.
Except political parties can advertise any time they feel lik
Re:One of the execs (Score:5, Interesting)
It used to be even better than that before the Conservatives screwed things up.
To somewhat offset the contribution limits, we had a program in place that rewarded federal political parties a subsidy of around $2 for every vote cast for one of their candidates during an election. Smaller parties in particular benefited from this (though there was some minimum-vote threshold, IIRC), and it meant your vote wasn't merely symbolic, but directly aided your preferred party even if they didn't win a seat.
The Conservatives decided to kill this program, arguing that parties should only get money from fundraising efforts. This played well with the so-called fiscally responsible right-wing who complained that "their" tax dollars were being wasted. No subsidy meant a few million saved each election, right?
Except campaign contributions are tax-deductable. If you donated the maximum $1000, you got around half of it back in tax deductions, so instead of $2 every 4-5 years of tax dollars I paid into subsidizing exactly who I want, $500 every year goes to subsidizing some rich bastard's tax deduction for contributing $1000 to a party I don't support.
Political donations should not be tax-deductable at all. It should be a purely ideological choice, with zero financial incentives. And if you have enough money to waste on a political party, you obviously don't need the tax deduction.
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One of the execs got rid of ALL of their stock two days before it tanked.
Now, if your daughter is going to start at an Ivy League school and you need a few hundred grand, that may just be co-incidence.
But I don't think that happened.
Statistics tell us that it will happen by chance, every so often - depending on how many execs the company has, and how often they sell stock on average, this might be quite likely to happen by chance. For 100+ execs with an average sell-off time of ~2 years, it's more likely than not than it happens by chance to one of them right before a company tanks.
Sure, it's suspicious, but we don't convict people over that. What we need to do is prove that it was not chance.
And in far less time after the crime. Wh
When stock is rising, why sell ALL? (Score:4, Interesting)
If they'd sold 20% of their stock, then it would not be more than mildly suspicious.
But when the market is rising, who sells ALL their stock?
Nobody.
And if that is two days before the stock tanks?
It's rather like complaining "they could have died of a heart attack at the same time, so you can't label the 'shooting a gun at them' as anything more than suspicious".
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But when the market is rising, who sells ALL their stock?
Nobody.
I've done that before. I'm sure many others here have too. Sometimes you don't have the luxury of waiting, sometimes you don't want the gamble, and sometimes you have to put in your sell order well in advance.
And if that is two days before the stock tanks?
So? Not all execs were privy to information that the stock would tank. This has to be shown before conclusions can be drawn. You see the effect and can only guess at the cause unless you have evidence. And we don't (or shouldn't) put people in prison based on our ability to guess.
It's rather like complaining "they could have died of a heart attack at the same time, so you can't label the 'shooting a gun at them' as anything more than suspicious".
No, the odds are
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The way that corporate execs (as a group) are manipulating the government and not being held accountable for their fraudulent activity, it would probably be HEALTHY for some people on the streets with torches and pitchforks. The fact we see NONE of that is more concerning than any concern about "mob mentality." If you don't see the corporate malfeasance we're living with right now then you're a CEO worshiper.
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The way that corporate execs (as a group) are manipulating the government and not being held accountable for their fraudulent activity, it would probably be HEALTHY for some people on the streets with torches and pitchforks. The fact we see NONE of that is more concerning than any concern about "mob mentality." If you don't see the corporate malfeasance we're living with right now then you're a CEO worshiper.
So. MickyTheIdiot, not only do you advocate lynch mobs, but you want to pass judgment on me too?
For what it's worth, I'm a socialist, who thinks that the stock market and corporate system is inherently evil - not necessarily the individuals, but the system. If you pour blood into the bay, you get sharks. That isn't the sharks' fault, and amassing a mob to hunt them isn't going to solve the problem, only make you look like a tool.
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Executive trades are typically public and large shareholders do watch them and will respond to them.
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Executive trades also typically has to be put in a long time in advance, precisely to reduce suspicions that it was based on insider knowledge.
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References? Nortel didn't "tank" in a single day, it happened over much of 2001. If an exec was in the habit of immediately exercising, then selling options as they vested, or before they expired, it might not be unusual for them to sell "all" of their stock holdings on a regular basis.
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More significant would be "two days before xxx was announced publicly."
I was in Nortel (Score:4, Interesting)
They would not pay the staff bonuses, that would be bad for shareholders, but the bosses get their bonus, and jail time, I hope.
I await... (Score:2, Interesting)
I await roman_mir or one of his sock puppets posting outraged comments over this "travesty" of justice and affront to "freedom" to perpetrate fraud. And mob rule, etc. etc.
Sympathy (Score:4, Interesting)
They should go to jail... but...
I used to know some people in this sort of situation. They business wasn't nearly as big, but they'd run into some financial trouble and if earnings were bellow some arbitrary number, it would trigger a wave of financial ruin on the company. In the case that I was parifrialy aware of (I had a family member working there) They were getting free water, sewer, etc from the city as long as their revenue was X amount. They were short by less than a tenth of a percent. There were also loans who's interest rates would go up. The end result was, if they published the numbers they had, the company was going down. I knew a lot of the people involved and they were very torn up about the whole thing. There were around 1000 people that would lose their jobs, the entire thing would be a mess. So they lied. The company went on to make it out of their financial troubles.
I don't agree with what happened. But there's a lot more to these stories than stock options and greed. Not a single person I knew in that situation was talking about any of that. They were talking about a single earnings number destroying their business and the welfare of the people that worked for them. The moral of my story isn't that you should do this sort of thing... it's that the motives of the people behind this stuff aren't always sharks trying to score money. Some of them really care about their business and the people working there. I don't know if that's the case here, but food for thought or something.
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Don't even start to defend these guys.
These guys were responsible for 90,000 people losing their jobs and there pensions through outright illegal practices running Nortel.
These are millionaires that tried to over-inflate the value of their company to get more money, not just some hard working guys doing what it took to keep the company profitable and afloat.
Don't pull the "lets put on their other guys shoes" empathetic bullshit here. You couldn't afford the shoes these guys were putting on their feat rippi
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When the other person has a different kind of shoes, that's the best time to try them on.
It's about the circling vultures (Score:1)
It's pretty clear that this case isn't so much about the three defendants as it is about the vultures circling wanting what is left of the Nortel carcass for themselves. To gorge on that carrion someone has to be shown to be guilty. The problem is even the judge is having problems seeing guilt when the accounting practices were accepted by the auditors.
What isn't clear to me, is how all this might affect the pensioners and former employees claims. They are the ones who really got screwed by this whole mess.
They're free (Score:1)
Free, yes they're free:
http://www.ctvnews.ca/canada/former-nortel-execs-acquitted-in-multimillion-dollar-fraud-case-1.1112930
It's official: Aquitted (Score:2)
On the CBC's site [www.cbc.ca].
$12.8 million potential fraud? (Score:2)