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To: Lizzie Tudor who wrote (91157)	10/2/2007 8:56:00 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

Here is a DOJ report on various cases outlining the mechanics of investigating accounting fraud cases. This seems to be the most popular kind of criminal conduct... usdoj.gov Segmenting Investigations Rather than spending years putting together the “perfect” case, where each possible defendant and all wrongdoing is compiled into a single indictment or enforcement action, member investigators and attorneys have been instructed to undertake their actions as swiftly as possible. This “real-time” enforcement is best accomplished when distinct cases, which comprise a separate segment of conduct involved in a larger investigation, are brought when they are ready and as expeditiously as possible. In the WorldCom case, for example, the SEC filed its civil enforcement action the day after WorldCom announced its restatement. Ultimately, WorldCom agreed to pay $750 mil-lion to victim-investors in settlement of those charges. Simultaneous with the civil enforcement action in WorldCom, prosecutors from the United States Attorney’s Office for the Southern District of New York and FBI agents from the New York Field Office and elsewhere conducted a focused and thorough parallel investigation of the largest accounting fraud in U.S. history, resulting in swift criminal charges being brought against top officials of the company. More specifically, within days of WorldCom’s restatement, prosecutors and agents identified and began to debrief virtually all of the key witnesses. During these interviews, it became clear that WorldCom’s accounting irregularities extended to other aspects of its financial reporting. Prosecutors and agents decided, however, to remain focused on and master fully those issues relating to the reduction of line cost expenses, saving investigation of other suspect areas for later. As a result, prosecutors filed a criminal complaint against WorldCom’s former CFO and former Controller on August 1, 2002, five weeks after the initial revelation of the accounting fraud.

To: Lizzie Tudor who wrote (91157)	10/2/2007 9:09:06 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 306849

The problem which the AG (and in parts the SEC) always and also in the Milken cases have is, that they go after the big fish, at least they say so and at the same time cut deals to get testimonials. Those again come from people in the know and definitely not Xerox operators. So the "marzipan layer" in a company can often go untarnished. Similar in the brocade case, the criminal investigation might be interested into the employees knowing of options fraud, but it was soon clear that while they may have "aided and abetted" they did not benefit. Therefore the evident lack of interest. Which is not wrong: Those ones who simply execute shall not bear the same responsibility than those who devised a fraud scheme. For being honest they may even evade prosecution. And yes, the conduct of the state attorney is another thing...

To: Lizzie Tudor who wrote (91157)	10/2/2007 9:45:06 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

since most employee options plans here are backdated (employees get the low of the quarter backdated to their start date) The above would not be acceptable. I also work for a U.S. corporation and hence I know the formulae firsthand. Related to purchase plans they have backdating not built in. They do have a rule that the "lesser of" the prices at the quarters begin and end are used to price stocks; less a discount. But this is disclosed in S 8 or annual reports and it past muster with the SEC...

To: Lizzie Tudor who wrote (91157)	10/2/2007 10:29:58 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Witnesses must not lie but to a large degree lawyers may and should. I thought lying like that was a "contempt of court" kind of thing. As an example, "My client Phil Spector did not shoot Ms Clarkson" is a lawyer defending his client, regardless of the fact that its a lie. Lawyers are allowed to present their "story" of how the evidence fits together according to them. They're even allowed to present stories which look ridiculous on their face in the process. Not disclosing the evidence you intend to present before the trial, that's a "contempt of court" thing. .