The Price of Poor Rules Management
Examples of Business Mistakes Caused by Poor Rules/Process Management
The cost of managing and automating business rules is much less than the price of not managing and automating business rules. Below are examples of companies and people that have paid the price of poor rules management.
Accounting / Audit / SEC Reporting
Broadcom finds more option errors - Broadcom Corp., a supplier
of chips used in communications devices, said Friday it may need to
record expenses starting at $1.5 billion for stock option
accounting flaws, double what it had estimated in July. Yahoo.com
Sep. 8, 2006
McAfee lawyer fired over options grants. Security software firm
releases general counsel after learning of his involvement in
improper stock options grants in 2000; shares slip. money.cnn.com
May 31, 2006
Fannie Mae Finds $10.8B in Errors. Fannie Mae has disclosed
$10.8 billion in accounting errors stemming from its derivatives and hedging activities. The nation's largest mortgage lender also names MCI executive vice president and CFO Bob Blakely as its new chief financial officer. Stephen Taub, CFO.com November 10, 2005
Ex-Andersen Auditors of Enron Cited. When seven accountants for the now-defunct firm audited part of Enron's 1997 financials, they allegedly didn't consolidate the statements of two subsidiaries — Chewco and Jedi - into the parent company's audit. Stephen Taub, CFO.com November 04, 2005
CVS to Pay $110 Million to Shareholders. Shareholders asserted that the nation's largest pharmacy chain delayed accounting for discounted merchandise in order to prop up earnings. June 7, 2005. CFO.com.
KPMG Found Using a Tax Shelter It Sold. The Big Four accounting firm
reportedly employed the strategy — which the IRS later found to be
abusive — to book a $34 million deduction on its 2001 tax return. CFO.com October 17, 2005
Antitrust / Price Fixing
- Samsung Fined
$300 Million for Price Fix. Including the Korean-based chip maker, three companies and five people have now been charged and fines totaling more than $646 million have been levied in connection with the ongoing Department of Justice probe. October 17, 2005. CFO.com.
FCC Do Not Call List Violations
- AT&T fined $780,000 by FCC for violating Do Not Call List. AT&T might get socked with a
$780,000 fine for violating its own "do-not-call" list — the first such telemarketing sanction ever. AT&T broke the rules by calling 29 consumers on 78 occasions after they asked not to be called. The proposed fine includes $10,000 for each violation. Nov. 3, 2003. USA Today.
FTC Mail Order Rule Violations
- Old Computer, New Woes for Freddie Mac. Since 2001, the mortgage-finance company miscalculated interest income due to an error in a legacy computer system used for certain mortgage-related securities. Stephen Taub, CFO.com November 08, 2005
Privacy / Pretexting
Calif. AG: HP tactics violate state laws - SAN FRANCISCO - While
state Attorney General Bill Lockyer has determined Hewlett-Packard
Co.'s clandestine investigation of its own board members violated
the law, he says it's still unclear whether anyone will be
prosecuted. Yahoo.com. Sep. 8, 2006.
This list is
always under construction... We welcome your suggestions.