Security Vendor McAfee to Pay $50 Million Fine

goombah99 writes "RedHerring.com reports that Security Vendor McAfee has agreed to pay a fine of fifty million dollars stemming from false SEC filing. McAfee cooked its books, overstating its revenues one year by 131%, or half a billion dollars. The method employed was 'channel stuffing' in which compliant re-sellers are effectively paid to buy and hold inventory they may never sell. The shipped goods are booked as revenue and the payments disguised in the books. When it caught up with them, McAfee's stock price crashed, wiping out a billion dollars of shareholder capitalization. The story quotes an analyst saying this maybe the swan song for the once dominant vendor."

Oh, what a...

[Bin_jammin]

disappointment. After they're gone, I'm sure it'll only be another twenty years before I stop seeing customers' boxen with Macafee's anti-virus expired demo notification popping up every time I touch it. Maybe they should have given away more nagware, that might have helped.

wtf?

[User 956]

This is reminiscent of Enron's mark to market [investorwords.com] accounting, wherein you basically determine the real market asset value, then you just make up a bunch of shit.

One of the oldest

[IAAP]

accounting tricks.

The method employed was 'channel stuffing' in which compliant re-sellers are effectively paid to buy and hold inventory they may never sell.

I think there should be class in 'B' school called, "Accounting Tricks That Get You In Trouble with the Law: You're not as smart as you think you are."

System Scan Results:

[doit3d]

....16,284 files scanned. Warning! Unknown file found: CookBooks.exe Do you wish to Quarantine or Delete?

Damn

[c0dedude]

McAfee cooked its books, overstating its revenues one year by 131%, or half a billion dollars.
Anyone else disappointed it wasn't for making shitty and processor hogging software?

Honest mistake...

[Andrewkov]

I hear this was caused by an Excel Marco virus, only McAfee was to embarrased to admit it.

Wait just a minute

[Luscious868]

Fines are not enough and hurt shareholders more than those who are responsible: the executives. The true punishment should be fines and jail time for the COO, CFO, CEO and all the other Cx0's. What does fining a company do except bleed the shareholders?

Hey, wait just a second. Leave the poor CTO out of it :-)

Re:Yes, it is what Enron did.

[GuyverDH]

It appears that they may have actually been implementing more than one bad accounting practice.

Why limit yourself to just one.

Re:Honest mistake...

[karmaflux]

The Marco virus: Every other computer on the network does ping -c 1 -p 00000000706f6c6f 192.168.1.1

That explains that math

[kalbzayn]

Now I understand why their software used to tell my computer it had two viruses but could never do anything about them. The software was following the coorporate policy of overstating results.

Re:Oh, what a...

[vurg]

This reminds me of one time I went to this small IT shop, where most of their workstations have Nortons whose expiration date is Jan. 1, 3067. :)

As someone said to me in '89....

[MrBandersnatch]

"I cant trust something from a company called Make-A-Fee".

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:if they're that corrupt

[Quasar1999]

And doctors go out and run people down in their cars so that they can then save lives and make a living... Health inspectors plant e.coli in the food they inspect... Firemen set fires randomly in the middle of the night so they have something to put out... Cops give gangs guns so they have gang violence to fight... Yeah... okay... and Microsoft purposefully pirates Windows for better market penetration...

If you believe any of that... I'm very worried...