The CotoBuzz Journal, Community Journalism

The CotoBuzz Journal

Community Journalism, Newsletters and Blogs Covering South Orange County, CA

The CotoBuzz Journal is a member of Investigative Reporters and Editors (IRE) and NAHJ

SEPTEMBER 2007 ISSUE

We do not make jokes, we simply watch the LA Times, the Orange County Register and the Coto de Caza Board of directors and report the facts!

Consequences of Ethical Lapses

August 9, 2007

Consider the consequences for those of us in business, not yet conversant with what ethics is and is not.

In the early 80's, the ex-CEO of Brocade Communications was a young salesman (his uncle is Google's CFO), while I was the operations manager responsible for some $400 million/year in revenue for the same company.

I vividly remember a joint sales call, where this young man consumed an inordinate amount of alcohol (we may not have been too far behind). As he was driving us back to the hotel, (we had a meeting with our customer early the next day), we did a 360 and almost crashed.

Since then our paths paths, rarely crossed. Although three years or so ago I had conversations with his HR executive about the possibility of doing some work for Brocade.

The August 8, 2007 WSJ chronicles the legal battle he just lost in an article titled Brocade Ex-CEO found guilty in Backdating Case - Criminal-trial victory for US likely to Serve as Model for Prosecutors. He, along with his HR and Finance executive face long jail terms - Notice that his attorneys have long argued his innocence given that a) he did not benefit personally from his actions and b) he did not know the details of the backdating transactions.

It is fair to say that even today, a good number of CEOs would see nothing wrong with the practice of backdating, yet some 140 companies have come under federal investigation for backdating, and about 70 executives have lost their jobs, according to the WSJ.

On an un-related case the FBI filed a criminal complaint against the former top personal financial adviser to billionaire Henry T. Nicholas III, the co-founder of Broadcom Corp. (not Brocade) accusing him of withdrawing hundreds of thousands of dollars in cash to avoid federal reporting requirements.