Caution: SOX Could Cost You the Shirt on Your Back!
12/19/2007 12:04 PM
HealthSouth CIO, well former CIO, was convicted of fraud. He paid $10,000 in fine and served 6 months in home detention. Now why this should not scare you!
We live in a country that is “of the corporation, by the corporation and for the corporation...”
Some of you will see no dichotomy in this state of affairs because we are a capitalist society. Capitalism is the means of empowering people not subjugating them. Capitalism is the foundation for Democracy not the rule of a few.
...Yet, SOX slipped through.
Some of you will see that as an accomplishment. I see that as business as usual. Indeed, an affirmation of the strength of the corporation in running America. If there is a problem, call your friends in congress – yes, those who are on your payroll through the various “campaign contributions” you have been giving them over the years – and let them pass a law that makes a lot of noise but does little in terms of actual enforcement.
SOX is the smoke and mirrors that helped the country get over Enron etc. People were mad so congress passed a “law”. The storm blew over and then the law has done little enforcement. 5 years later, how many CEOs have gone to jail as a result of SOX?
For those of you who have actually read the law and followed the cases there should be no doubt the sham that it is.
Well, that is not the reason I write. As a CIO, you are at risk. As with all other laws, there is selective enforcement. You just might be the 1% that gets caught up to make an example and tell people “see it really works!”
Remember, it is the exception that proves the rule.
HealthSouth CIO, Mr. Kenneth K. Livesay, is one such exception. He was the assistant comptroller who was involved in a scheme to cook and bake financial reports. The company got caught. He went to jail. Well, almost
. He was fined $10,000 and given 5 years’ probation and 6 months house arrest.
Isn’t that awful? Especially considering that the fraud was apparently only to the tune of $3.5/4.5 Billion.
I am beginning to feel for “Kenny Boy.” Poor guy was “hounded” for nothing. All he did was to bankrupt a few hundred thousand investors. Our man Dennis “throw my wife a multi-million party” Kozlowski was only accused of $600 million in fraud. John Rigas at Adelphia? Millions.
Now contrast that with the Martha Stewart conviction
. The vicious fraudster had the gall to avoid $51,000 in losses. The charge that got her $250,000 fine and 6 months jail time? She said to her investors “I am innocent.” Say what?
I am not sure how she beat the death penalty!