Michael J. Rigas, the former executive vice president of cable company Adelphia Communications Corp. will serve 10 months of home confinement and two years of probation. He will also pay a $2,000 fine. This is his punishment for helping to conceal fraud at the company.
Rigas faced up to three years in prison for filing a false statement with the SEC in connection with a 1999 purchase of Adelphia stock for $1.7 million. He reported that source of the money he used to purchase the shares was personal funds. He later admitted that the money actually came from Adelphia. Continue reading
Wal-Mart Stores Inc. is seeking a director of global ethics to help monitor compliance with its worldwide code of conduct. Wal-Mart currently has 1.6 million employees in 15 countries, and over 6,200 stores. The new director would oversee the Global Ethics Office, which was opened in 2004 to offer employees guidance on ethics compliance.
Read about Sequence Inc.’s employee education services.
A longstanding deal with the United Auto Workers means that U.S. auto makers pays billions for employees who don’t work. The “Jobs Bank” program sees to it that over 15,000 unneeded workers continue to earn wages and benefits that often exceed $100,000 annually per employee. The total cost of this program will be $1.4 billion to $2.0 billion this year.
This was such an interesting story in the Wall Street Journal that I’m posting the entire article here.
Detroit’s Symbol of Dysfunction: Paying Employees Not to Work
By Jeffrey McCracken
WSJ, March 1, 2006
FLINT, Mich. – In his 34 years working for General Motors Corp., one of Jerry Mellon’s toughest assignments came this January. He spent a week in what workers call the “rubber room.”
The room is a windowless old storage shed for engine parts. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.
Their job: to do nothing.
This is the “Jobs Bank,” a two-decade-old program under which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many do volunteer jobs or go back to school. The rest must clock time in the rubber room or something like it.
Huh??? It’s true. A 12 year-old on a field trip to the Detroit Institute of Arts took a wad of gum out of his mouth and stuck it on a painting worth $1.5 million, leaving a spot of residue the size of a quarter.
The abstract painting was done in 1963 by Helen Frankenthaler, and is entitled “The Bay.” The museum got the piece in 1965, and says that today it is worth approximately $1.5 million.
Museum officials are researching the chemical properties of the gum to determine the correct solvent to use on the painting.
A Legislative Audit Bureau report on the UW System’s employment practices shows that the system employed 40 felons currently under supervision this past fall. (An Associated Press report states 40 felons work for the UW System, but the truth is that the 40 are only the ones currently under supervision. There could be other felons working for the system, but not under supervision.) Continue reading
Wesley Colwell, the former head of accounting of Enron’s wholesale energy unit testified that in July 2000, he shifted $14 million from reserve accounts to pump up earnings. He also testified that neither Kenneth Lay nor Jeffrey Skilling directly told him to manipulate earnings.
Colwell testified that Enron’s wholesale unit delayed financial reports for the fourth quarter of 2000 until they were instructed on how much profit the company wanted to report. Continue reading
Anna Nicole Smith (real name Vickie Lynn Marshall) was a 26 year-old stripper when she met 89 year-old millionaire Howard Marshall. They met at Anna’s workplace, and adult club, and married in 1994.
Howard died in August 1995, 14 months after the wedding. All of his assets were held in a trust, with his son Pierce Marshall as the primary beneficiary. Anna Nicole claims that Howard created a separate trust for her benefit, but that Pierce destroyed the documentation. Continue reading
Distributed Denial of Service (DDOS) attacks have been wreaking havoc with e-commerce sites. These attacks bombard sites with so much internet traffic, that their regular customers cannot get through to do business with them. Hackers get into computers and turn them into “bots”, which are then used to attack e-commerce sites.
Symantic reported an average of 927 DDOS attacks per day in the first six months of 2005. This was up 679% from the last six months of 2004.
The tax preparation company of H&R Block Inc. has incorrectly calculated its own state taxes. A mistake in calculating its state effective income tax rate means that the company owes $32 million in back taxes that go back to 2004.
A company representative said that the error isn’t material. But it sure hurts when the company is already experiencing a slow year, which has been impacted by a technology problem that drove away 250,000 customers.
Four KPMG (and former KPMG) partners have agreed to SEC fines for their failure to detect a multi-billion dollar accounting fraud at Xerox Corp. Two of the four will pay the SEC $150,000 each, the largest fines ever imposed against individual auditors by the SEC.
From 1997 through 2000, Xerox manipulated its accounting for office equipment leases, in order to meet Wall Street’s expectations. The SEC alleges that KPMG partners overseeing the audit knew or should have known about the improper accounting practices.
To date, the SEC has won $55.2 million in penalties and disgorgement from cases related to Xerox. This includes $22.5 million in fines paid by KPMG.