Gateway duo loses SEC fraud suit
565029
IRVINE, Calif. -- A federal jury ruled that two former Gateway Inc. executives manipulated earnings to meet analysts' expectations, the Securities and Exchange Commission said yesterday.
303997
A federal appeals court yesterday ruled that two developers of file-sharing programs are not legally liable for the copyrighted content their users swap online.
390630
IRVINE, Calif.   - Gateway Inc., the third-largest personal computer company in the United States, said yesterday that it rejected an unsolicited $450-million bid for its retail business from eMachines Inc. founder Lap Shun Hui.   Gateway said the Aug.
506605
(InfoWorld) - The operator of two computer privacy services has agreed to pay up to $1 million in refunds to customers to settle charges of using deceptive marketing techniques and selling the customer's personal information. Consumer Digital Services, which sold the Privasafe and SurfSafe software and services, has agreed to pay $300,000 in fines and legal fees and offer refunds to Washington state consumers who were billed for their products, according to Katherine Tassi, assistant attorney general for Washington. Terms of the settlement were outlined in a consent decree filed Thursday in King County Superior Court in Seattle. Consumer Digital Services is controlled by Gary Salmirs, of Fort Lee, New Jersey, who is also named in the settlement. The state alleges that the company violated state consumer protection laws, but neither Salmirs nor the company admit to any wrongdoing in the settlement, Tassi said. According to her, the company lured customers with offers of free gift cards, flat-screen monitors, andÂ software, promoted through pop-up ads and e-mail. Customers handed over personal informationÂ such asÂ addresses, telephone numbers, and dates of birth, thinking that they were getting a free product. "What they actually were doing was signing up for a paid service," Tassi said. Thousands of consumers received unexpected $14.95-per-month charges for the company's software and services, and almost nobody got a free gift card or flat-screen monitor. "Our investigation showed that only one of the over 13,000 Washington consumers ever actually got this free item," Tassi said. Consumers didn't have to hand over credit card information in order to be billed because the charges were tacked on to regular monthly telephone bills, she added. Last year, the Florida attorney general investigated a company called Email Discount Network for engaging in similar billing practices, Tassi said. Consumer Digital Services took its Web sites offline sometime during the past month, Tassi said. But according to cached copies of these sites, the company said that its products would remove spyware, protect consumers against "unscrupulous marketers," make Internet surfers anonymous, and even boost connection speeds. In fact, the "exact opposite" occurred, Tassi said. "They actually were compiling a huge database of consumer information that could be used for marketing purposes," she said. This data was eventually sold to marketing companies, she added. Washington state residents who were billed for Privasafe or SurfSafe products since Jan. 1, 2004, can get their money refunded and will be contacted by Consumer Digital Services. The company could not be reached immediately for comment.
406871
(InfoWorld) - The former legal counsel for McAfee is facing federal charges of improperly backdating stock options at the security software company. Kent Roberts, 50, of Dallas, was indicted Tuesday by a federal grand jury on seven counts of fraud for improperly backdating options between 2000 and 2002, according to a statement from the U.S. Attorney's Office for the Northern District of California in San Francisco. Roberts is charged with "devising a scheme to defraud by granting himself and others valuable in-the-money stock options while hiding the true nature and value of the stock option grants," the statement says. Roberts hid the fraud from the company, then known as Network Associates, its board, shareholders, auditors, and the U.S. Securities and Exchange Commission (SEC). Roberts joins a small butÂ growing list of executivesÂ or former executives of companies charged in the U.S with improperly backdating stock options grants to make them more profitable for the recipients, but at the expense of shareholders. More than 100 U.S. companies are under investigation by the SEC, federal prosecutors, or through internal audits. According to the indictment, the Network Associates board granted Roberts the option to buy 20,000 shares of Network Associates' stock at the strike price of $29.62, which was the price at which the stock closed on Feb. 14, 2000. In late 2000, Roberts became concerned that his options were "underwater," that is, the $29.62 exercise price of the grant was more than the market price for stock. Roberts allegedly caused Network Associates' then-controller to change the grant date and exercise price in the computer system that recorded stock option grants. The grant date was changed to April 14, 2000, with a new exercise price of $19.75. Furthermore, Roberts implicated the then-controller in the improper backdating of other stock options for consultants to the company. Roberts initiated an investigation in 2002 and recommended that the controller be removed from his position. Roberts also participated in a conference call with the SEC at the time, in which he implicated the controller. All the while, the indictment says, Roberts never mentioned that the controller backdated his options, too. The government also says that Roberts altered board meeting minutes to change the date on which options were granted to the company's then-CEO and chairman. He allegedly changed the options date from Jan. 15, 2002, when the stock closed at $27.19, to Jan. 16, when it closed at only $25.43. The greater the difference between the lower options price and the higher market price when the executive exercises the option, the greater the profit. Roberts is scheduled to be arraigned Thursday before Federal Magistrate Judge Joseph C. Spero in San Francisco. Roberts' attorney Neal Stephens could not be reached for comment.
348960
The huge losses reported by French bank Soci?t? G?n?rale, apparently caused by a rogue trader with inside knowledge of the bank's procedures, don't necessarily point to an IT systems failure but rather to poor management of those systems, analysts say.The bank has accused 31-year-old employee Jerome Kerviel of creating a fraudulent trading position in the bank's computers that ultimately caused it to lose around ?4.9 billion ($7.3 billion).Kerviel achieved this by, among other things, misappropriating computer passwords, the bank said. It has revealed few other technical details of what caused the losses.Management of passwords, including rescinding the old passwords of employees who move to different positions within the bank, or modifying the level of access those passwords allow, is often a task given to the lowest-level IT worker."It's dull and routine 99 percent of the time, but a vital backstop," said Bob McDowall, senior analyst at the TowerGroup. Senior IT managers should conduct more frequent reviews of password policies, he said.In some cases, it may not have been the security of the passwords themselves that posed a problem, but rather the access those passwords allowed, said Ian Walden, professor of information and communications law at Queen Mary, University of London.Organizations tend to think of access as being binary in nature: you get access to it all, or you don't, Walden said. In reality, there are many more levels of access. "In modern, complicated systems, the granularity has to be much more sophisticated."To make the best use of systems with advanced access controls, the IT department must have a thorough understanding of how the business works and where there is risk.IT departments and business managers have yet to find a way to wrap security into business processes so it is not an impediment, Walden said."IT in a company is not given a sufficient status," Walden said. "What's shocking is you would have thought that the financial sector was more sophisticated than this, but it still tends to be the case that security is an add-on and a block, something you've got to live with but you don't have to like, rather than being viewed as an integral part of the business structure."Workers should be able to do their job without having to share passwords when someone goes on holiday, and the IT department should not make it harder for people to perform their duties, Walden said.In one extreme example at telecommunications company BT, one employee didn't have the right to use a computer at all, but he found it helped him do his job, Walden said."By the time he was found, he had 90 passwords of different employees," Walden said.It's possible that financial institutions could use biometric systems, such as fingerprint scanners, to provider an added layer of security, McDowall said. Those systems, however, are expensive. Also, the sometimes-finicky fingerprint scanners may not be appropriate in a frantic trading environment, McDowall said.Questions remain about how Kerviel's losses could be so high given his job as relatively low-level trader. But Kerviel's career progression in 2005 from the bank's back office to the front office -- where he would have had access to client accounts -- is also troubling since he would have gained greater knowledge on the bank's inner controls, McDowall said.As an arbitrage trader, Kerviel made money off price differences between different financial products. Soci?t? G?n?rale said Kerviel balanced real and fake trades in order to avoid setting off internal alarms.Kerviel has been described in some press reports as a computer genius. However, most attackers used unsophisticated methods for exploiting systemic vulnerabilities in applications, processes and procedures, according to the 2005 "Insider Threat Study" by Carnegie Mellon Software Engineering Institute.That report notes that sophisticated tools are also used in some attacks, which would demand that internal financial systems need to be designed on a more defensive footing.Programmers should code under the assumption that a hacker or employee will use every means in order to break in, said Ben Rothke, senior security consultant at BT's International Network Services."The underlying issue is that many systems are designed to stop honest people from making mistakes, but do not take into account those with malicious intent," Rothke said.It makes insider jobs one of the toughest to defend against. The psychological profile of an insider tends to be a disgruntled employee who feels wronged by the company, according to the Insider Threat Report.That in turn can lead to a suspicious behavior such as staying late at work, which paradoxically might only signal a committed employee."It's always the insider," Rothke said. "It's often harder to steal $10,000 from a bank than $10 million."
484329
The U.S. Federal Trade Commission (FTC) has asked a federal court to require an alleged Web page hijacking operation to obey previous orders barring unfair and deceptive practices.Walter Rines, business partner Sanford Wallace, and Rines&#39; company, Online Turbo Merchant, diverted users of MySpace.com to other Web sites and barraged them with ads to earn advertising commissions, according to court papers filed with the FTC. The defendants used pagejacking, phishing, and other methods to target MySpace users in violation of a previous court order, the FTC said in a news release.The FTC, in a Jan. 23 filing, asked the U.S. District Court for the District of New Hampshire to order the defendants to give up the money they earned from their MySpace scheme.Rines&#39; listed phone number in New Hampshire was disconnected.In October 2005, the FTC charged Odysseus Marketing and its owner, Rines, with luring consumers to their Web site by offering free software, including a program that supposedly allowed them to engage in anonymous peer-to-peer file sharing. The software was bundled with spyware that intercepted and replaced search results and barraged consumers&#39; computers with pop-up ads, the FTC said. The software also stole users&#39; personal information, and users were unable to locate or uninstall the spyware through reasonable means, the FTC said.The FTC alleged that the defendants&#39; software captured consumers&#39; personal information and transmitted the information to the defendants&#39; servers. Consumers were unable to locate or uninstall the spyware through reasonable means, the agency charged. The court ordered a preliminary halt to these practices pending trial, and in October 2006 Odysseus and Rines settled the charges by stipulating to a permanent injunction.The permanent injunction prohibited the defendants from redirecting consumers&#39; computers; from changing any Web browser&#39;s default home page; and from modifying or replacing the functions of any computer application. It required Rines and his company to obtain consumers&#39; express consent before downloading or distributing any content to their computers.The permanent injunction also imposed a $1.75 million judgment, and all but $10,000 was suspended based on the defendants&#39; inability to pay.In its recent filing, the FTC alleges that Rines, his company, and Wallace knew of the permanent injunction and violated that order by diverting users from MySpace.com to their Web sites.
420396
A JUDGH HAS ruled that a manufacturer of electronic voting equipment knowingly misrepresented its claims when it sent threatening letters to the ISPs of students who had posted the company&#39;s internal documents online.
176311
Two former executives with Gateway Inc., the nation's third-largest PC vendor, are guilty of manipulating earnings and revenues to meet Wall Street expectations, according to a verdict delivered Wednesday by a federal jury in California.
263179
Don't mention the stock Brocade and Mercury Interactive have coughed up $35m between them to settle charges they deliberately flouted SEC rules by falsifying dates of stock option grants.â¦
543129
By Eric Benderoff, Chicago Tribune  Sep. 7--A federal lawsuit that pitted a Naperville attorney who wanted to bring class-action status against a company he says puts spyware on personal computers was dismissed Wednesday before reaching trial.
128478
In a victory for programmers and security researchers, DirecTV faces a setback in lawsuit against alleged signal thieves who dared to order smart-card programmers.
509077
An antitrust lawsuit against the guardian of the ICANN is thrown out.
178524
The disclosure this week that a Singapore-listed company controlled by a Chinese state-owned enterprise lost $550 million in derivatives transactions
338798
SAN FRANCISCO -- The makers of two leading file-sharing programs are not legally liable for the songs, movies, and other copyright works swapped online by their users, a federal appeals court ruled yesterday as it delivered a stinging blow to the entertainment industry.
178208
U.S. securities regulators on Friday sued a partnership and one of its founders, alleging they made bogus offers to buy such well-known entities as Sony Corp.  and Playboy Enterprises Inc.  in an effort to manipulate their stock prices.
752737
A federal jury ruled that two former Gateway Inc. executives manipulated earnings to meet analysts' expectations, the Securities and Exchange Commission said Thursday.