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Nortel Executives Found Not Guilty On Fraud Charges

Unknown Lamer posted about a year and a half ago | from the on-to-the-next-job dept.

Businesses 151

Following up on the earlier story about Nortel execs waiting for a ruling in their corporate fraud case, new submitter Unknown1337 writes "Something doesn't add up when a multi-billion dollar corporation loses it's value so quickly, but the courts have decided it wasn't intentional fraud by the executives that caused it."

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Right, so... (0)

Anonymous Coward | about a year and a half ago | (#42589339)

"Something doesn't add up when a multi-billion dollar corporation loses it's value so quickly, but the courts have decided it wasn't intentional fraud by the executives that caused it."

You don't remember the dotcom bubble?

Malice (5, Interesting)

RenHoek (101570) | about a year and a half ago | (#42589341)

"Do not attribute to malice, what can be adequately explained by stupidity."

Still, this does not pass the smell test..

Re:Malice (4, Insightful)

Mitreya (579078) | about a year and a half ago | (#42589353)

"Do not attribute to malice, what can be adequately explained by stupidity."

I don't know that someone triggering a $12.8 million bonus payout for themselves can be adequately explained by stupidity. I don't know of a lot of Mr. Bean-like millionaires that just stupidly stumbled into wealth

...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.

Re:Malice (4, Insightful)

telchine (719345) | about a year and a half ago | (#42590097)

I don't know of a lot of Mr. Bean-like millionaires that just stupidly stumbled into wealth

GW Bush comes to mind.

Re:Malice (4, Insightful)

Charliemopps (1157495) | about a year and a half ago | (#42590455)

I don't know of a lot of Mr. Bean-like millionaires that just stupidly stumbled into wealth

GW Bush comes to mind.

Seriously, you still believe this propoganda? His staff has flat out admitted they intentionally tried to make him look dumb and "Country-boyish" to appeal to his core constiuency. The guy graduated from one of the best schools in the country, lead the entire quite well (allthough you may disagree with the direction) and won 2 terms to office in what's considered to be 2 of the toughest elections in modern history. The boy ain't dumb, he was just fake'n.

Re:Malice (0)

Anonymous Coward | about a year and a half ago | (#42590891)

Obviously you never heard him speak.

Re:Malice (0)

Anonymous Coward | about a year and a half ago | (#42590969)

nukular

Re:Malice (1, Interesting)

TheLink (130905) | about a year and a half ago | (#42590985)

While no super genius he didn't sound that dumb when he thought the microphone was off:
http://en.wikisource.org/wiki/Bush_and_Blair_conversation [wikisource.org]

And he's smarter than the average US voter since he got voted in for a second term.

Re:Malice (0)

schnell (163007) | about a year and a half ago | (#42590953)

The boy ain't dumb, he was just fake'n.

Stupid is as stupid does... and I would counterargue that launching a war on false premises that cost tens of thousands of lives and hundreds of billions of dollars - with no real plan to "win the peace" - does not put you in Brainiac territory. Throw on top of that a well-intentioned but badly misguided "ownership society" set of policies that fueled the housing and accompanying banking meltdowns, and and you are left with a less than intellectually stellar legacy. Also, in my mind, getting accepted and graduating from Ivy League schools tends to mean far more when you are not the scion of a wealthy and politically connected alumnus.

I will certainly agree with you that GW Bush was smarter than a lot of people want to believe - his enemies portrayed him as a softheaded rube controlled by Dick Cheney, which he wasn't. But I really don't believe that you can make a case that Bush was even of adequate intelligence when it came to exercising intellect when being "the decider" on most of the big issues in his presidency.

Re:Malice (1)

Anonymous Coward | about a year and a half ago | (#42591111)

But I really don't believe that you can make a case that Bush was even of adequate intelligence when it came to exercising intellect when being "the decider" on most of the big issues in his presidency.

You just described every president I can think of in recent memory, regardless of party affiliation. In US politics, the President is controlled by his cabinet. He's just a talking head. Been that way for a long time now.

Re:Malice (0)

Anonymous Coward | about a year and a half ago | (#42591141)

It wasn't a dumb move from his perspective. It was a calculated move. While you and I didn't benefit from that move and it looked really dumb (and it was from our perspective) it benefits him. It might have cost billions of dollars although he probably made million from it- or at least "good friends" which will benefit him later (probably financially).

Re:Malice (0)

Anonymous Coward | about a year and a half ago | (#42591323)

Seriously, you still believe this propoganda?

Apparently you do, dumbfuck. Yeah he was faking it. Good one.

Re:Malice (1)

Zontar_Thing_From_Ve (949321) | about a year and a half ago | (#42590273)

I don't know that someone triggering a $12.8 million bonus payout for themselves can be adequately explained by stupidity. I don't know of a lot of Mr. Bean-like millionaires that just stupidly stumbled into wealth

In general this is true, but the ones who just stupidly stumbled into wealth seem to buy professional sports teams in the USA. Each of the four major sports leagues (MLB, NFL, NBA and NHL) has owners who make you scratch your head and ask "How on earth could somebody that stupid be so rich?" In some cases it's simply that dad was a genius and rich and junior just inherited his money.

Intelligence: Asset or Hindrance? (2)

rmdingler (1955220) | about a year and a half ago | (#42590477)

I like to think upper end of the spectrum intelligence is a required attribute in many of our science, engineering, mathematics, and problem-solving vocations. There are positions in industry, however, that are seemingly best suited to those with no moral compass at all. It is not that these two conditions are mutually exclusive, merely that a complete lack of ethics is the most decisive trait in determining who will Captain our industry. Very often intelligence is burdened with that pesky human condition known as empathy, and that will slow your roll at Goldman Sachs faster than a bestiality addiction.

Two Tier Justice system (5, Insightful)

FriendlyLurker (50431) | about a year and a half ago | (#42589441)

Just another example of the two tiered justice system [salon.com] we now enjoy around the world.

two-tiered justice system — the way in which political and financial elites now enjoy virtually full-scale legal immunity for even the most egregious lawbreaking, while ordinary Americans, especially the poor and racial and ethnic minorities, are subjected to exactly the opposite treatment: the world’s largest prison state and most merciless justice system.

In Financial Crisis, No Prosecutions of Top Figure (2)

FriendlyLurker (50431) | about a year and a half ago | (#42589455)

Quoted from here [salon.com] :

In Financial Crisis, No Prosecutions of Top Figures.” It asks: “why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?” And it recounts that not only have no high-level culprits been indicted (or even subjected to meaningful criminal investigations), but few have suffered any financial repercussions in the form of civil enforcements or other lawsuits. The evidence of rampant criminality that led to the 2008 financial crisis is overwhelming [nakedcapitalism.com] , but perhaps the clearest and most compelling such evidence comes from long-time Wall-Street-servant Alan Greenspan; even he was forced to acknowledge [steadfastfinances.com] that much of the precipitating conduct was “certainly illegal and clearly criminaland that [huffingtonpost.com]a lot of that stuff was just plain fraud.

Re:In Financial Crisis, No Prosecutions of Top Fig (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42589673)

And yet,

so many people who were 'against' the occupy movement and everyone still believes in trickle down economics.
Really if you think about it. Trickle up makes a lot more sense.
Why should millionaires who get another few million really spend any of it? Just add it to the pile.

I think Michael Moore did it best, he went into the Wall street buildings and tried to make some citizens arrests. That's what should've happened en mass.

Re:In Financial Crisis, No Prosecutions of Top Fig (5, Insightful)

daem0n1x (748565) | about a year and a half ago | (#42589727)

And yet,

so many people who were 'against' the occupy movement and everyone still believes in trickle down economics. Really if you think about it. Trickle up makes a lot more sense.

If you succeed in destroying someone's deeply entrenched beliefs using facts and logic, that person won't change his mind but will hate your guts forever.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

johnjaydk (584895) | about a year and a half ago | (#42589967)

If you succeed in destroying someone's deeply entrenched beliefs using facts and logic, that person won't change his mind but will hate your guts forever.

Best line I've heard in a long time. I'm so going to steal it.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

murdocj (543661) | about a year and a half ago | (#42590103)

I have a deeply entrenched belief that people are people, and that people who gravitate to power and wealth often do so by unethical means, and that the people in the Occupy movement would be just as bad if they came into power. If someone has some amazing way to ensure justice and decent treatment for all of us, I'm all for it, but in the absence of that, the current system is as good as it gets.

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

daem0n1x (748565) | about a year and a half ago | (#42590133)

Let me analyse your logic. I hear this type of non-sequitur a lot:

  1. People currently in power are bad;
  2. If OWS people went to power, they'd be bad;
  3. So, the bad people currently in power are better than the OWS people, if they were in power.

You got Aristotle turning in his grave.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

murdocj (543661) | about a year and a half ago | (#42590149)

Did you actually bother to read what I wrote?

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42590249)

Of course he didn't. He's another example of the line quoted above:

If you succeed in destroying someone's deeply entrenched beliefs using facts and logic, that person won't change his mind but will hate your guts forever.

The funny thing is people think this only applies to other people.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

daem0n1x (748565) | about a year and a half ago | (#42590281)

Yes, but maybe I misunderstood it.

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42590733)

I read it as; easy way to power = unethical means, if a OWS supporter suddenly came to power easily it could also be by unethical means.

Anyone using unethical means would be bad, whatever regime they claimed to support in the first place.

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42591013)

You got Aristotle turning in his grave.

Perpetual motion! Someone quick get a patent!

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42591021)

The Occupy people want the other evil power in the equation (the government) to redistribute wealth. To tell folks what is and isn't "acceptable" amounts of money to make, and so forth.

Sure... the OWS people are the 'good' guys. How is their logic any different than the corporate raiders they revile?

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

Stolpskott (2422670) | about a year and a half ago | (#42590527)

If you work on the basis that people trying to get into a position of power are doing so for one of two reasons:
1. Personal gain, money, power, influence, and the chance to live the high life; or
2. A genuine desire to help people and with the conviction that they are able to improve the lot of all people,

then when the people get into power, one of three things will happen.
Those who go in for reason 1 (and who are not dumb enough to get caught) will line their pockets. Those who go in for reason 2 will be offered the inducements that the "reason 1" people get. They will probably be tempted, and if they give in to temptation they will turn into more "reason 1" people, possibly without really realizing it. If the reason 2 group are tempted but resist, stay true to their ideals, and see everyone around them behaving like pigs at the feeding bucket, they will probably be tempted to expose the problems and educate the masses about what is going on. At that point, the "reason 1" people, with a collective will borne out of self-preservation instincts, will do everything they can to neutralize, silence, or otherwise discredit/eject the honest people from their sphere of influence.

If my (rather low) opinions of the people who seek power and influence is correct, then the honest types who could make a positive difference become ineffective, while the rest just do whatever they can to keep the gravy train rolling.

The only way to prevent that is to have oversight of those in power. The only way to prevent the corruption of those responsible for the oversight of the people in power is for the oversight to be performed by the broader community, not by specific individuals. That way, the cost of bribery/corruption becomes too high, and while human nature makes a group individually lazy, it also makes the group generally more honest as there is more scrutiny and less possibility of corruption.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

Hatta (162192) | about a year and a half ago | (#42591049)

Because nothing is perfect we should never try to be better than we are? Really?

trickle? (1)

junkgoof (607894) | about a year and a half ago | (#42591067)

It's not trickle up it's flow or flood up. Then off to the Cayman Islands.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

lxs (131946) | about a year and a half ago | (#42589947)

The Occupy movement was like a safety valve, a way for the little guy to blow off steam before the whole thing blows up so the status quo can be maintained, not a movement that proposed realistic plans for reform.

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42590343)

100% correct analysis. It is always very funny how freedom of speech and freedom of assembly is badmouthed when it affects the rich and powerful.

The alternative to peaceful protest would be voting Adolf Cromwell into office. We should be thankful to these people, and the bankers should be, too. If OWS cannot facilitate reform, Cromwell's revolution will eat quite a few of the current elite.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

LordLimecat (1103839) | about a year and a half ago | (#42590727)

Why should millionaires who get another few million really spend any of it?

Because if they dont their employees will find a job that actually pays them.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

nedlohs (1335013) | about a year and a half ago | (#42591145)

They both make sense. Trickle down is supply side. Trickle up is demand side.

"Add it to the pile" is the desired outcome of "trickle down", since adding it to the pile mean investing it. That investment ends up funding businesses and the economy grows.

Trickle up would increase spending and hence demand which businesses will hopefully then meet by expanding.

Trickle down has problems of course. The most obvious being that not all investment goes to businesses - the US government, for example, also borrows a fairly large amount of money - that comes from the pool of investment and is going to the government rather than to businesses.

Trickle up has problems too. Increased demand can be satisifed by foreign producers and hence the economic benefits of more jobs and more production end up happening elsewhere.

Of course those investments can be made overseas, and increased spending can be directed to bidding up the price of things like real estate - so both those example problems cut both ways.

Re:In Financial Crisis, No Prosecutions of Top Fig (0)

Anonymous Coward | about a year and a half ago | (#42592387)

Trickle down has problems of course. The most obvious being that not all investment goes to businesses - the US government, for example, also borrows a fairly large amount of money - that comes from the pool of investment and is going to the government rather than to businesses.

The most obvious being it ends up on $exotic_paradise or trying to game markets. (both not beneficial to the people)
And government getting part of the investment isn't a problem in itself, it's a feature that will allow it to provide the logistics for an expanding economy. And the feature/problem is also applicable to trickle up, unless you buy everything in the airports tax free zone.
If the government is very bad at doing useful things with that money, that is a separate problem.

Trickle up has problems too. Increased demand can be satisifed by foreign producers and hence the economic benefits of more jobs and more production end up happening elsewhere.

Yes,while true, you can be sure the gross expense will happen in the country, paying for at least shop assistants and logistics. As a bonus many people get extra useful stuff in contrast to few people getting more expensive useless stuff.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

cusco (717999) | about a year and a half ago | (#42592595)

Trickle down has problems of course. The most obvious being that...

The most obvious being that it doesn't work and has never worked anywhere in the dozens of countries that it has been implemented. Ever. Anywhere. The historical reality is that giving the rich and powerful more riches and more power just means that they will grab an ever-larger share of everything for themselves at the expense of the less-rich and less-powerful. This has been the outcome of every case of trickle-down economics that I have ever seen. Even David Stockman now admits that it's bunk, and that he knew it was a fraud when he was pushing for it. When a program's main evangelist admits that it's fake you really should abandon it altogether.

Re:In Financial Crisis, No Prosecutions of Top Fig (1)

tlhIngan (30335) | about a year and a half ago | (#42592181)

I've come to believe that it's down to appearances in the end.

Take a wall street exec for example - they dress nice, they may be a bit extravagant, but are otherwise "normal" in the eyes of society. They "obey" the rules (for the most part), generally follow the norms of society, wash regularly and look presentable. Prosecutors know if you want to charge them, you really need an airtight case, otherwise they'll just pull out the charm card of how they help starving children, blah blah blah and are otherwise upstanding citizens.

Take an OWS protestor - as a whole, most are unkempt, "hippies", and while some generally are presentable, the others clad in the tie-dyes and masks/balaclavas and torn jeans, not so much. It's much easier to cast these people as "lazy bums who could work but choose not to" in the eyes of society, and thus, if you were prosecuting them, easier to find a jury who will view them in the same way. They're basically "yucky", and once cast in that light, the defense needs to prove that they are upstanding citizens.

In the tragic case of Aaron Schwartz, I think a similar thing happened - the prosecutor sees a teenaged rebel intent on causing havok in "civilized" society, and they know all they have to do is cast him as someone society really doesn't want (despite all the good he does).

And I suspect even people like RMS run into similar issues - they can preach all they want, but the unkempt hair, potential odours etc., just give everyone a negative first impression.

Or perhaps why the typical stereotype of a scammer generally is one of a street hoodlum - when in reality they tend to be very appropriately dressed for the occasion (even sharply dressed), so people are instantly disarmed.

I suppose TL;DR - people judge books by their cover, and if you're a reasonably dressed person, you can get away with quite a lot. But if you're not up to what society expects in general hygiene, attire or behavior, it's a lot easier to convince others you're a detriment despite all the good.

Hence OWS arrests, while Wall Street looks on after plundering all the money. Or the prosecutor dumping over the top charges on Aaron. They know they can get away with it because they can portray them as people society doesn't want based on looks and behavior alone. And you know juries will form their first opinions (he LOOKS guilty!) the moment they step into the courtroom.

Re:Two Tier Justice system (4, Insightful)

daem0n1x (748565) | about a year and a half ago | (#42589699)

Fortunately we don't live in a Communist system. Remember how in the former Soviet Block the members of the Intelligentsia used to commit crimes with total impunity while the common people had to obey the law and dissidents were convicted based on bogus accusations?

I'm so happy we live in Western Capitalist Democracy where none of those things happen.

Re:Two Tier Justice system (0)

Anonymous Coward | about a year and a half ago | (#42589791)

You could quite possibly happy to live in the Weimar Republic 2.0, if things continue this way.

Prepare yourself for the grace of the Lord Protector.

Re:Two Tier Justice system (0)

Anonymous Coward | about a year and a half ago | (#42589809)

You surely meant "members of the Party". "Intelligentsia" consisted of artists, teachers, scientists and so on, and was mainly hated (by the ordinary people too) and oppressed by government. BTW, one of the bonuses of late Communism was that almost no one believed in official propaganda. Compare it to the modern Western World.

Re:Two Tier Justice system (1)

daem0n1x (748565) | about a year and a half ago | (#42590055)

You surely meant "members of the Party". "Intelligentsia" consisted of artists, teachers, scientists and so on,

Yeah, you're right.

one of the bonuses of late Communism was that almost no one believed in official propaganda. Compare it to the modern Western World.

We'll get there eventually. There's only so much bullshit people can take.

Every time I see our politicians and pundits puking their bullshit on TV I remember that scene in "Mars Attacks" when aliens were walking in the middle of destroyed city streets killing every human without the slightest hesitation. While doing that, they were talking all the time. One of them was carrying the "translation machine" that translated what they were saying: "Don't run, we are your friends, we come in peace".

Re:Two Tier Justice system (1)

G-Man (79561) | about a year and a half ago | (#42591305)

Yeah, a closer description would be the 'Nomenklatura': http://en.wikipedia.org/wiki/Nomenklatura [wikipedia.org]

Re:Two Tier Justice system (0)

Anonymous Coward | about a year and a half ago | (#42589869)

I agree. It's great that no sitting US politician would shoot someone in the face [wikipedia.org] and then have the guy who was shot apologize to the shooter.

Re:Two Tier Justice system (0)

Anonymous Coward | about a year and a half ago | (#42590267)

You people are so funny. You can't get over the fact that Bush and Cheney defeated your perfect politician, Gore the Robot.

Re: Two Tier Justice system (0)

Anonymous Coward | about a year and a half ago | (#42590439)

Canada

Re:Two Tier Justice system (1)

steelfood (895457) | about a year and a half ago | (#42591827)

No, they allowed the DOJ install wiretaps on their boxes, so they call in a favor and get a pass.

On the other hand, Joseph Nacchio, who did not allow the Feds to act with impunity, got convicted of insider trading.

Something is rotten in the state of Denmark.

Re:Malice (1)

stephanruby (542433) | about a year and a half ago | (#42589663)

...the courts have decided it wasn't intentional fraud by the executives that caused it

That's not exactly true. This is what was said by the judge. Notice how very careful the judge is with his words.

Ontario Superior Court Justice Frank Marrocco dismissed fraud charges against former Nortel chief executive Frank Dunn, former chief financial officer Douglas Beatty and ex-controller Michael Gollogly, saying the Crown had failed to meet “the high standard of proof” in a criminal case.

“I am not satisfied beyond a reasonable doubt that Frank A. Dunn, Douglas C. Beatty and Michael J. Gollogly deliberately misrepresented the financial results of Nortel Networks Corporation,” Justice Marrocco said in his ruling.

He noted, however, that the case is separate from civil actions brought by securities regulators and a mediation process resuming in Toronto this week aimed at divvying up about $9 billion in insolvent Nortel’s remaining assets.

Re:Malicious stupidy (0)

Anonymous Coward | about a year and a half ago | (#42590201)

"Do not attribute to malice, what can be adequately explained by malicious stupidity."

Re:Malice (0)

Anonymous Coward | about a year and a half ago | (#42590737)

"You get what you pay for."

Re:Malice (1)

jbeaupre (752124) | about a year and a half ago | (#42590873)

I recently asked a former prosecutor this question: "People demand that Wall Street bankers be prosecuted. What offenses could they be charged with?" His short answer was nothing. His explanation was very enlightening.

The long answer is they could be charged with all sorts of stuff, but proving it is difficult. There are two things that need to be proven: Guilty hand and guilty mind. The guilty hand is easy to see. With financial disasters, it's easy to prove that somebody is guilty of screwing the pooch.

However, he went on to explain guilty mind is incredibly difficult to prove. You have to prove that they intended to screw the pooch. All they have to do is claim "I thought it would work." As in "I thought we'd make money from the deal." Without hard evidence of their state of mind, they get to plead stupidity as a defense.

Which means that

"Do not attribute to malice, what can be adequately explained by stupidity."

is somewhat enshrined in law.

Nortel collapsed (0)

Anonymous Coward | about a year and a half ago | (#42589363)

Nortel simply collapsed because it was overindebted, like so many telco-bubble companies. The end. That's the short version.

Shows how good they were at creative accounting (4, Informative)

flyingfsck (986395) | about a year and a half ago | (#42589373)

That shows how good they were at cooking the books, if malpractise can't be proven. They should open a school for Creative Accounting.

Re:Shows how good they were at creative accounting (1)

Pieroxy (222434) | about a year and a half ago | (#42591023)

That shows how good they were at cooking the books, if malpractise can't be proven.

They should open a school for Creative Accounting.

What for? The guy is already a millionaire several dozen times over?

Even if not guilty, they lose (4, Insightful)

jimicus (737525) | about a year and a half ago | (#42589453)

This is one of those cases where the defendant can't possibly win.

If guilty: they dishonestly re-jigged a companies accounts so as to pay themselves a massive bonus. Fraudsters of the highest order.

If not guilty: Not the point. They were in charge of Nortel. If they (totally innocently) re-jigged the accounts thinking it would do the company good, gave themselves a massive bonus as a big pat on the back and then found the company collapsing around their ears, they're still responsible. Only instead of being fraudsters, they're dangerously incompetent.

Never work again. (4, Informative)

Rande (255599) | about a year and a half ago | (#42589535)

Oh gee, how will they ever survive on the mere millions they've got in the bank? They might have to cut back right down to the bone, where they can no longer afford a new car every month, have to give up 3 of their 5 mistresses, and settle for only a gold swimming pool instead of the platinum one they set their little hearts on.

What's worse (3, Insightful)

DarthVain (724186) | about a year and a half ago | (#42591803)

What's worse is this is one of those cases where the corporation dipped into or underfunded the pension plan, so when they went under they took all their past and current employees with them.

Just imagine how you might feel having worked your whole life, retire on a fixed pension, then hear about these execs that get 12million bonus OVER their salary, and stock, to tank the company (perhaps illegally cooking books in process), which btw ends up reducing your pension income by 33% or whatever.

I'm just suprised these sort of jerks (Nortel isn't the only one) arn't beaten to death by walkers and canes from cheated pensioners.

Re:Even if not guilty, they lose (2)

oodaloop (1229816) | about a year and a half ago | (#42589687)

Yeah, I guess they'll have nothing but the millions of dollars they swindled to cover up the shame of having swindled money. The fuck? They got away with murder, plain and simple.

Re:Even if not guilty, they lose (0)

Anonymous Coward | about a year and a half ago | (#42589761)

incompetence is rarely illegal.

Re:Even if not guilty, they lose (0)

Anonymous Coward | about a year and a half ago | (#42589829)

This is one of those cases where the defendant can't possibly win.

This is one of the cases where the defendant can't possibly lose. They already won 12.8 Million dollars.

Re:Even if not guilty, they lose (0)

Anonymous Coward | about a year and a half ago | (#42590755)

This is one of those cases where the defendant can't possibly win.

If guilty: they dishonestly re-jigged a companies accounts so as to pay themselves a massive bonus. Fraudsters of the highest order.

If not guilty: Not the point. They were in charge of Nortel. If they (totally innocently) re-jigged the accounts thinking it would do the company good, gave themselves a massive bonus as a big pat on the back and then found the company collapsing around their ears, they're still responsible. Only instead of being fraudsters, they're dangerously incompetent.

Is there a third interpretation, though?

To illustrate the pack that the defendants were running with; the last CEO of Nortel, Zavirovski, decided to fold the company in 2009, then proceeded to sue as a creditor for some few millions in compensation from the company. Roth, Dunn's predecessor, filed a claim as creditor for $1 billion. It's pretty clear they were operating on the "get paid" principle, regardless of it's impact on the business. The fact that the case against Dunn, et al, didn't reach the level of legal proof doesn't mean that the whole event doesn't stink to high heaven.

In any case, they really did fail to do their job correctly, as evidenced by the fate of the company. C level executives are supposed to protect the business, not loot it.

Where was the coercive plea bargain offer? (4, Insightful)

Anonymous Coward | about a year and a half ago | (#42589497)

Download academic articles? Go to prison and be tortured for decades.

Falsify records, ruin a company for your own personal enrichment, and defraud hundreds of thousands of shareholders along the way? No fucking problem.

America is winning a worldwide race to the bottom.

Re:Where was the coercive plea bargain offer? (0)

Anonymous Coward | about a year and a half ago | (#42589519)

Nortel is canadian, and Swartz wasn't realistically facing "decades of torture" anywhere other than in the overactive imagination of slashdotters.

Re:Where was the coercive plea bargain offer? (0)

Anonymous Coward | about a year and a half ago | (#42589545)

I would call being imprisoned for those crimes a form of torture. Its not just about physical torture.

Re:Where was the coercive plea bargain offer? (0)

Anonymous Coward | about a year and a half ago | (#42589531)

America is winning a worldwide race to the bottom.

This happened in Canada, dumbass.

America has many problems, including the fact that many of its citizens believe it to be the center of the Universe—if not the entirety of it.

Re:Where was the coercive plea bargain offer? (1)

fvbommel (795367) | about a year and a half ago | (#42589755)

America is winning a worldwide race to the bottom.

This happened in Canada, dumbass.

America has many problems, including the fact that many of its citizens believe it to be the center of the Universe—if not the entirety of it.

Canada lies in (North-)America, dumbass.

The United States of America have many problems, including the fact that many of its citizens believe it to be the center of America [wikipedia.org] —if not the entirety of it.

Note the first link on that Wikipedia page.

Of course, there are also a more [merriam-webster.com] authorative [reference.com] sources [oxforddictionaries.com]

Re:Where was the coercive plea bargain offer? (1)

Ogive17 (691899) | about a year and a half ago | (#42590393)

Oh please, the United States is commonly refered to 'America' around the world.

Re:Where was the coercive plea bargain offer? (1)

fvbommel (795367) | about a year and a half ago | (#42590681)

Roses are also commonly referred to as "flowers" around the world (or their local translations). This does not mean a rose is meant whenever the word "flower" is used.
Similarly, simply because the United States are commonly referred to as America does not mean every mention of America refers to them. As my links above show, it's a word with multiple meanings.

Re:Where was the coercive plea bargain offer? (0)

Anonymous Coward | about a year and a half ago | (#42589597)

The race to the bottom is likely won by the ignorance in your statement.

Re:Where was the coercive plea bargain offer? (1)

Sulphur (1548251) | about a year and a half ago | (#42589915)

The race to the bottom is likely won by the ignorance in your statement.

The race to the bottom is likely won by steroids.

Nortel: victim of industrial espionage? (4, Informative)

beckett (27524) | about a year and a half ago | (#42589599)

Nortel was subject to an organized [www.cbc.ca] , sustained industrial espionage effort conducted by Chinese companies. Huawei [www.cbc.ca] was specifically named by Brian Shields [theglobeandmail.com] , Systems Security Advisor for Nortel at the time of the attacks (at the time Huawei supposedly were even copying Nortel's instruction manuals). Shields petitioned Royal Canadian Mounted Police [cdfai.org] in 2004, because even the CEO's computer had been compromised.

the rootkits employed on Nortel hardware were sophisticated enough to survive formatting [canada.com] . it wasn't until recently that Canadian Security and Intelligence Service became interested in the role Huawei had in Nortel's demise [cantechletter.com]

I suggest the story of Nortel's demise has not been fully revealed. Nortel presented with a sudden, public exanguination and it has been a mystery in Canadian IT industry. This is not just another "golden parachutes" story.

Re:Nortel: victim of industrial espionage? (1)

Maow (620678) | about a year and a half ago | (#42589693)

Nortel was subject to an organized [www.cbc.ca] , sustained industrial espionage effort conducted by Chinese companies. Huawei [www.cbc.ca] was specifically named by Brian Shields [theglobeandmail.com] , Systems Security Advisor for Nortel at the time of the attacks (at the time Huawei supposedly were even copying Nortel's instruction manuals). Shields petitioned Royal Canadian Mounted Police [cdfai.org] in 2004, because even the CEO's computer had been compromised.

The rootkits employed on Nortel hardware were sophisticated enough to survive formatting [canada.com] . it wasn't until recently that Canadian Security and Intelligence Service became interested in the role Huawei had in Nortel's demise [cantechletter.com]

I suggest the story of Nortel's demise has not been fully revealed. Nortel presented with a sudden, public exanguination and it has been a mystery in Canadian IT industry. This is not just another "golden parachutes" story.

Thank you for posting these links in one convenient location. I'm working my way through them and ... just ... "Wow".

I was vaguely aware of some of the allegations previously, but not the extent of them.

I've considered us to be engaged in a "cyber-war" for quite a while, but still there's more I have to do to lock down my systems.

Re:Nortel: victim of industrial espionage? (0)

Anonymous Coward | about a year and a half ago | (#42589919)

I'm sorry, but the info in the links doesn't really convince me. "hackers had free rein inside Nortel's network for more than a decade before the company went bankrupt in 2009". Even correlation doesn't imply causation, but in this case, we don't even have correlation - they had hackers in the network for 10 years, and they went bankrupt. But did they go bankrupt BECAUSE of the hacking?? The article is full of similar inferences.
Thus, "sophisticated enough to survive formatting" was inferred from "Brian would wipe the hard drive of one of the machines and re-image it, then we did a second memory image within five minutes," - is it clear that this is sophisticated malware, and not incompetent wiping? You can infer sophistication when you see and analyse the malware, or you can really prove you're working in a clean room environment. Nothing is said about where the "reinfection" came from. Was the machine still on the network? Then it doesn't seem really sophisticated. Was it in the boot sector? Also not that sophisticated, and fairly incompetent wiping. Was it in the computer's BIOS? Then that pretty sophisticated. But until we know how it happened, we know nothing about the "sophistication".
"The attackers were "clearly recent graduates of a Chinese polytechnic" who were "heavily in debt," yet by 2009 seemed to have "more money than they ever imagined,", yes, maybe because they managed to distribute malware through porn sites or steal money from grandmas? This whole statement is also strange.

A correlation like "the CEO dumped all the Nortel stock two days before the company went down" is much more convincing....

Re:Nortel: victim of industrial espionage? (0)

Anonymous Coward | about a year and a half ago | (#42590507)

Your post is disingenious and focused on What Matters To Beancounters ("trace the money").

I DO think it IS plausible to blame horrible IT and network security for the death of a corporation. This is a site where IT folks, software engineers and so on meet. If a major opponent really had (more or less) full access to Nortel's computers, they could easily outfox Nortel on each and every sales engagement. Very much the same as if you knew the command&control messages of your military enemy. See Engima and U-Boot sinking statistics.

If you know all the internal documents of a competitor, you get weakness analysis of competing products from the horse's mouth (internal corporate sales docs normally also tells salespeople in which aspects own products are weak). You can then order your sales people to hit exactly these weak points of competition when talking to potential customers. Maybe Huawei and ZTE did exactly this.

Now, do we have proof Nortel's security was so horribly bad ? I think we currently have some hints towards that. Do we know the intruders were working to the benefit of Huawei ? That is very much conjecture.

Can the Nortel case be used to drum up support for PROPER security practices ? Yes, I do think so.

Will it result in criminal convictions ? Only if they can prove neglect on the part of senior management. If enough IT personell came forward, it could happen.

Re:Nortel: victim of industrial espionage? (0)

Anonymous Coward | about a year and a half ago | (#42592001)

No, I don't think it is disingenuous. I was trying to point out that very serious accusations were made on what seems to
be very flimsy facts.

This is a very serious intrusion, with "very sophisticated" malware. Where is the "styxnet" of that intrusion?
Is there a serious site that analyses the intrusion beyond "brian shields, a senior security exec at Nortel says"?

Re:Nortel: victim of industrial espionage? (2, Interesting)

Anonymous Coward | about a year and a half ago | (#42589735)

I was an employee of Nortel, and I do not buy this completely. It might have happened - for sure, but Nortel was so slow that even otherwise, its demise was on the cards. Once I was part of a big project - which was supposed to be 50+ people for 9 months - which in the end ballooned to 150+ people and was not over even after 2 years. Not that these sort of overruns doesnt happen in other companies - but the project itself was to implement one existing specification in their system 2 years after all their competitors. Also, the whole thing shouldnt have taken 9 months and 50+ people itself, but their language and architecture was so old that it was very non-agile and we could straightaway see it struggling with its monolithic architecture against the COTS system provided by the competitors.

For me, Nortel failed because they (1) did not innovate enough in the later years and (2) their software architecture did not move with the times. Other factors like espionage might have been a major cause, but they were still struggling a lot otherwise also.

Please note that I was a small time developer in one area, so in other areas they might have been much better. But our area was one of their lucrative ones though - so cant say either ways.

Re:Nortel: victim of industrial espionage? (2)

terjeber (856226) | about a year and a half ago | (#42591815)

Please note that I was a small time developer in one area, so in other areas they might have been much better

They were not. I think remember the management software side of Nortel had a couple of thousand people in it at one point in time. They produced less than tiny startups with skills did, and were utterly incapable of taking advice. At least until about 2005-6 or so. At that time they were open to advice, but it was too late.

Re:Nortel: victim of industrial espionage? (-1)

Anonymous Coward | about a year and a half ago | (#42589743)

So a telecom equipment vendor could not defend it's CEO's PC ? Pathetic.

Re:Nortel: victim of industrial espionage? (1)

alcourt (198386) | about a year and a half ago | (#42590215)

Well, yes. Telecom vendors are not exactly celebrated for their competence, especially in security.

A more accurate statement might be that if I see a product from any major telecom vendor, I go in assuming that it will be riddled with security holes that were well documented ten years ago. Usually I can't even meet those low expectations and am disappointed -- again.

So (0)

Anonymous Coward | about a year and a half ago | (#42590387)

..they died a well-deserved death, it seems.

Now, if that could be spun into an "example of a large corporation being bankrupted because of bad security", this whole thing could push the PHBs into demanding real security. Working for a super-corpo at the moment, I am not truely optimistic, though.

Re:Nortel: victim of industrial espionage? (0)

Anonymous Coward | about a year and a half ago | (#42590231)

OK, perhaps they were hacked to death. But that article clinches the case for executive incompetence. If the CEO doesn't want to know about widespread hacking, he's incompetent. If any large company doesn't have a suitably expert security staff to keep external hacking under control, their leadership team is incompetent.

Re:Nortel: victim of industrial espionage? (2)

terjeber (856226) | about a year and a half ago | (#42591731)

Come on, those things were not part of the Nortel demise. Nortel's demise started long before Huawei was a serious player outside of the poorest third world countries. Huawei has also gone after CISCO's market far more than Nortel's market. Nortel collapsed due to incompetence. For example:

A small company called Xros (X as in the Greek letter Chi) was started by some guys who wanted to create a laser printer using mems technologies. The VC said "no, forget about laser printer, her is a ton of cash, go and create me an all optical switch". OK the dudes said, we'll do that, and they started working. They got some prototype stuff running. They made some in-roads into creating a sixteen channel switch etc. In 2000, they did not have much of a product, but quite a bit of prototype stuff. They were acquired by Nortel for a whopping $3.25B. A company with a handful of employees and no products.

That's how you kill a company.

Re:Nortel: victim of industrial espionage? (1)

terjeber (856226) | about a year and a half ago | (#42591763)

Oh, and I should mention, about a year or two later, all activities related to the Xros acquisition was halted. Nortel wanted to play cool with the likes of CISCO, but had none of the (management and sales) talent.

One Word (0)

Anonymous Coward | about a year and a half ago | (#42589665)

Huawei.

If it werent for the french government, Alactel/Lucent would be dead, too.

Wealth (3, Insightful)

DaMattster (977781) | about a year and a half ago | (#42589689)

It would seem that - with isolated exceptions - having wealth is a get out of responsibility free card. Society generally is more forgiving of the transgressions of the wealthy than of the working class. I wonder why this is because these transgressions can be just as serious yet we more readily forgive them. Look at past political figures and scandal: they often make comebacks. It is difficult for the working class person to make any kind of comeback after scandal. It is an interesting double standard.

Re:Wealth (1)

paiute (550198) | about a year and a half ago | (#42589795)

It would seem that - with isolated exceptions - having wealth is a get out of responsibility free card. Society generally is more forgiving of the transgressions of the wealthy than of the working class.

This has been the way of the world since... well, forever.

Re:Wealth (0)

Anonymous Coward | about a year and a half ago | (#42591697)

That is incorrect. In the classical world, a scandal usually meant the leaders will be executed or murdered, whether it was their fault or not.

Re:Wealth (1)

nebosuke (1012041) | about a year and a half ago | (#42592341)

In the interest of being pedantic (this is /. after all), I would argue that Society is not necessarily more forgiving, but that the punishment is effectively negligible or trivial to people with sufficient resources.

It is difficult for a working class person to make a comeback simply because a large enough scandal will ruin him/her to the point that all of their attention is focused on scraping together the basic necessities of life, whereas someone with sufficient funds in the bank can focus their time on rehabilitating their public image. The punishment is the same, but their ability to cope with the punishment is dramatically different.

As another example, the average college kid hit with multiple $3k settlement offers for illegally downloading The Hurt Locker may have their life ruined or seriously altered because they are forced to drop out of school as a consequence of the additional financial burden, whereas it is possibly a minor annoyance (maybe increased frequency of disapproving looks from the folks at thanksgiving?) for a rich kid in the same situation. Again, equal punishment but vastly unequal outcomes due to ability to cope with the punishment.

The above are simply natural consequences of the fact that our system of justice is based on, for the most part, equality of punishments for transgressions rather than equality of outcomes.

Bullshit (2)

Dynamoo (527749) | about a year and a half ago | (#42589713)

What a load of bullshit.. Nortel's infamous "return to profitability" is almost a textbook example of a dying company fiddling the books. I hope that the Canadian government takes this to appeal, else it looks like Canadian corporations can get away with whatever they like if they blow enough cash on lawyers..

Re:Bullshit (2)

SeaFox (739806) | about a year and a half ago | (#42589793)

Why would the Canadian government appeal the case when their country suddenly took a step up in the list of best places to incorporate your business? Still a long way from Ireland, but an improvement that might bring in more investors.

Re:Bullshit (0)

Anonymous Coward | about a year and a half ago | (#42590071)

Yes I agree, let's allow corporations and the super wealthy in general to run riot and commit all the fraud they please. As if they aren't on enough of a pedestal already.

It's Pro Business (TM).

Re:Bullshit (1)

Dynamoo (527749) | about a year and a half ago | (#42590229)

Well, I suppose putting a sign up saying "Fraudsters Welcome" might attract business. Actually, isn't that what Delaware has been doing for years?

Blame the prosecution (2)

hyades1 (1149581) | about a year and a half ago | (#42590247)

I just heard an interview with a forensic accountant who served as an expert witness for the plaintiffs. He said he was surprised the prosecution tried to make its case on the most difficult, least provable grounds possible. He also suggested other lines of attack that would have been much more likely to get a conviction.

For anybody interested, the interview was on the CBC Radio show Metro Morning.

Nortel's cash cow was analog phone switches (0)

Anonymous Coward | about a year and a half ago | (#42590293)

They were the big supplier for the baby bells and many other telecoms worldwide. What is the demand for those boxen these days? Pretty close to zero.

Re:Nortel's cash cow was analog phone switches (1)

WolfWithoutAClause (162946) | about a year and a half ago | (#42590479)

They also had a line in SDH and SONET equipment. That's been or is being replaced with IP/Ethernet protocol equipment. Basically, all their old core markets evaporated, and they weren't able to adapt in time.

I figured out the mystery (2)

slashmydots (2189826) | about a year and a half ago | (#42591035)

"Something doesn't add up when a multi-billion dollar corporation loses it's value so quickly"
I figured out what it is! It's the apostrophe in the word "it's." It isn't supposed to be there grammatically. Woo, tricky one but I got it.

Keyword: intentional (0)

Anonymous Coward | about a year and a half ago | (#42591871)

Probably take a new trial to determine 'Fraud By Stupidity.' In such a trial prosecution team would need to establish the educational incapacity, functional incompetence and mental deficiency of the Executives. This would involve lengthy medical exams and tests.

Perhaps the final ruling of the court will just as well 'damn the defendants' in that their actions were examples of fraud, such that they, in the opinion of the court during these proceedings, clearly demonstrated a profound lack of competence, comprehension and reasoning abilities as to not implicate them in that their actions were not intentional but rather examples of stupidity.

Suprised by naivety of Slashdot community. (0)

Anonymous Coward | about a year and a half ago | (#42592405)

Nortel is dead because the US government wanted it dead not because executives screwed it up. Does anyone remember the US congress announcing that Italian Antonio Meucci was the inventor of the telephone and not Canadian Alexander Graham Bell just a year or two before this whole fiasco. Well doesn't it seem odd that the worlds most powerful country embroiled in a war against Al Queada and Iraq would be spending its time worrying about who invented a 100 year old technology that was destined to be replaced by the internet. The signals sent by the congress was a clear indication to those who listen that Nortel (Canadian Telephone OEM) must die. Canadian government recognized this, and not wanting to challenge the US government, did absolutely nothing to try to save Nortel even though they were Canada's only large tech company at the time and would normally fight tooth and nail were it not for the strong message from the US congress. The Nortel executive scandal is basically a distraction to keep you confused. The executives surely new that Nortel was doomed so why not cook the books a little, take some profit and hasten the demise. Its not like governments would ever in a million years arrest them for doing what was expected of them.

Telecom history (and a lesson in how to manipulate the world economy) in a nutshell. Power structures pump up the value of Worldcom to insane levels ($186 billion) so that valuations threaten the real players like Nortel, Seimen, Ericsson. Entire market balloons to insane levels because investors figures if Worldcom is worth 'x' than a real player like Nortel must be worth '2*x'. Worldcom bubble gets popped causing a huge crash in market valuations. All telecom players are now vulnerable to extinction. Congress announces Nortel is the sacrifice. Siemens, Lucent and Ericsson breath a huge sigh of relief.

Statute of limitations! lol (1)

dittbub (2425592) | about a year and a half ago | (#42592433)

Nortel? How long does it take? No wonder the banks haven't been charged with anything...
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