06-12-2007, 07:44 AM
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CC Member
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Join Date: Jan 2004
Location: Tropics as often as possible,
FL
Cobra Make, Engine: ERA #2097 -289FIA . 351W. PSE Torq Thrust 17" Ds. All Black.
Posts: 1,190
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Not Ranked
They make most of their money in mainframe software. The scheme involved bonuses paid to the chief executives for keeping the stock prices above $60/share for 6 consecutive quarters (as I recall, the CEO got $350 million). Problem was that to keep the stock at that price, they inflated (by $1.7 billion) how much money they were earning (they had help, some of it from Federal Government Contracting Officers who received large price discounts in return). The FBI and the SEC were both aware that it was going on as early as 1999 but waited until 2003 to take any action (only when the Press and the stockholders started hounding them).
Once the bonuses were paid in 2000, the Company restated it's earnings and the stock fell from $60+ to $8/share.
The CFO just went to jail, the papers say the CEO might be next.
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