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Security Vendor McAfee to Pay $50 Million Fine 229

Posted by Zonk from the do-the-crime-pay-the-fine dept.
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."
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Security Vendor McAfee to Pay $50 Million Fine More

Security Vendor McAfee to Pay $50 Million Fine

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  • Oh, what a... (Score:5, Funny)

    by Bin_jammin ( 684517 ) <Binjammin@gmail.com> on Thursday January 05, 2006 @10:59AM (#14400622)
    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.

    • Re:Oh, what a... (Score:5, Insightful)

      by donnyspi ( 701349 ) <.junk5. .at. .donnyspi.com.> on Thursday January 05, 2006 @11:15AM (#14400781) Homepage
      I see plenty of Norton demo expiration alerts appear on computers I fix. I think it's misleading and annoying to have virus protection expire after 90 days of use. I've seen plenty of people who see that Norton or McAfee is still on their system so they think they're protected. Of course, the responsibility of wise computer use should be that of the user, but let's face it, most users don't know much anyway and having their anti virus expire on them just confuses them more.

      • Re:Oh, what a... (Score:2, Interesting)

        by hhlost ( 757118 )
        Both Norton and McAfee are garbage. Both run like a pig, make your system run like a pig, invade the entire system and aren't terribly effective. Use ZoneAlarm Antivirus instead. It's $20 a year, lightweight and I've never had a problem with it in 3 years.

      • Re:Oh, what a... (Score:3, Interesting)

        by brontus3927 ( 865730 )
        When Norton was getting ready to expire on my mother's computer, it gave her a pop-up message everyday saying that the subscription was going to expire and after that, she wouldn't be protected against new viruses, and gave a link to buy another year's subscription. I did this every day until I uninstalled Norton and installed AVGFree
    • Found a link to avast! [avast.com] on a Slashdot comment. Switched from Symantec's own demo version preinstalled on my PC (thanks for the time). Never looked back.

      The only nags I get now (which can be switched off) are those of automatic daily updates. For me, that's a Good Thing®.

      Demos are nice. Free stuff is better. Hunt down freedom whereever it hides (and I don't mean domestic spying ;) ).

    • Re:Oh, what a... (Score:5, Interesting)

      by scronline ( 829910 ) on Thursday January 05, 2006 @11:48AM (#14401140) Homepage
      Well, that's funny. I don't see ANY nagware out of mcafee and that's part of the problem. I see it updating whenever it's an active subscription, but after that it just doesn't do anything. This is the online/newest version not the old stuff that did nag all the time. The problem I see with McAfee is everything is all online. While that's a good way to do it, customers sign up, then change ISPs, then change ...., and a year later they don't remember what information they used for online registration. The client doesn't even show their email address used so you have to take guesses at it. In several cases they have to buy a brand new AV client simply because they don't have access to the old email address.

      Furthermore, I've had cases where their antivirus would keep the anti-spam from working and thus mail would never get delivered. It would just sit there fighting each other. Let's not even talk about the thousands of machines that come into my shop that won't even boot because McAfee is damaged. Boot into safe, uninstall McAfee and the system will boot properly.

      I don't disagree that you would see McAfee for years after it's gone (by whatever method), but that's partly because of the poor way they keep the customer informed and handle the account/licensing. Their products are in desperate need of a complete revamping. I even get about 300 "spam from your network" emails because of their crap client a day. Not a single one of them come from my ISP, they just spoof an email address on domains run/hosted by us or spoof our domain in the EHLO statement.

      That's not to say Symantec is any better. Up until the 2006 version I was pleased with Norton, but now it's just so in your face that you have to wait 5 minutes after boot up before really doing anything because of a popup screen that says "Norton is up and working properly" kind of crap and will sit there for 30 seconds or until you physically close the window yourself. I've had quite a few times their stupid little popups gets right in my way, or even kicked me out of a game I was playing

      Mainstream AV is too intrusive (but I can understand why since users just keep ignoring what it's saying) and in several cases ineffectual. They are all bringing a false sense of security and allow users to think they don't still have to follow good security on their own like....I don't know....not opening email attachments they aren't expecting.

      On that note, I'll bet money on the fact that more than 70% of the computers that were infected with the most recent outbreak of the sober virus were all computers purchased with McAfee OEM with only 90 days of service and probably half of those weren't even activated the other half were unknowingly (or uncaring) expired. Gotta love it when OEMs use McAfee as the default OEM product by default.

      The thing to remember about nag screens, they are there for a reason. Users always "oh, I just clicked close on that" and then complain about "why do I get viruses", "why do people do that", "is there anything I can do to go after these people?", and my personal favorite "what can I do to keep this from happening again?".

      • Re:Oh, what a... (Score:4, Interesting)

        by SatanicPuppy ( 611928 ) <Satanicpuppy@nosPAm.gmail.com> on Thursday January 05, 2006 @12:02PM (#14401283) Journal
        I wasn't happy with Norton 2k4, but it was Norton 2k5 that really made me lose it. Resource hogging, constant badgering. I had the damn software running on a machine that was pretty well protected anyway, so the intrusiveness of it was infuriating.

        I've noticed when people have the fancy Norton Security Suites installed, they tend to disable them because it makes it too annoying to browse the internet, for example. You get psychotic firewall notifications every few seconds, and it doesn't really remember what applications are safe, so it bothers you over and over for the same damn program.

        It's that funny thing with security...The best security is so restrictive that people ignore it and disable it whereever possible...Like requiring 10 digit passwords, changed monthly...those damn things are always written on a sticky, stuck under the keyboard.

        • Re:Oh, what a... (Score:3, Insightful)

          by scronline ( 829910 )
          I can't disagree with that. Personally, just about every mainstream AV/Security company has irritated the ever-loving-crap out of me lately. But there is a difference between techs and tech savvy people vs. Joe the average user. I don't think it's so much that they want it easy, it's more that there's alot of laziness going on. I'm mean, I can't even tell you how many customers are calling us for net support and they just don't read the screen.

          notification: "Your Norton needs to update some of it's pro

      • Re:Oh, what a... (Score:3, Insightful)

        by mrlpz ( 605212 )
        "Mainstream AV is too intrusive..."

        And you KNOW why it ends up being that way ? Two reasons....

        1. The bloody OS is a more porous than a sponge for all sorts of junkware.

        2. Because they ( the Symantecs, and McAfee's of the world ) feel that they have to demonstrate blantantly to the user "Look how useful I am to you !! Look at me !!", so that they can try to justify in the user's minds the ridiculously overpriced license fees they charge for every nickel and dime piece of glopware they plaster your PC with.

    • Re:Oh, what a... (Score:5, Informative)

      by Slime-dogg ( 120473 ) on Thursday January 05, 2006 @12:26PM (#14401512) Journal
      After reading up on the whole thing, McAfee did the funky accounting in the period from 1998 to 2000, and had $50m laying around, "reserved" for when they'd need it to pay the fine. I don't think that McAfee is really going anywhere any time soon.

  • wtf? (Score:5, Funny)

    by User 956 ( 568564 ) on Thursday January 05, 2006 @11:01AM (#14400632) Homepage
    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.

  • Fines are not enough (Score:5, Interesting)

    by 110010001000 ( 697113 ) on Thursday January 05, 2006 @11:01AM (#14400634) Homepage Journal
    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?

    • Wait just a minute (Score:5, Funny)

      by Luscious868 ( 679143 ) on Thursday January 05, 2006 @11:10AM (#14400733)
      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 :-)

    • The true punishment should be fines and jail time for the COO, CFO, CEO and all the other Cx0's

      I thought this what Sarbanes-Oxley was supposed to do. Anyone more knowledgeable than I know for sure?

      • Re:Fines are not enough (Score:4, Insightful)

        by Reducer2001 ( 197985 ) on Thursday January 05, 2006 @11:32AM (#14400960) Homepage
        As far as I can tell, SOX only causes pain and suffering to IT and accounting departments, and does not actually prevent executives from doing anything wrong. (IMHO as a low-level network flunky as part of a publicy-traded company)
      • Sarbox provides in Title III Section 304 that certain bonuses of the CEO and CFO during the previous 12 mo period as well as profits on sales of the entity's securities are forfeit. Additionally it widens the scope of penalties already in place from the Securities Acts of 1933 and 1934 (section 305).

        However, the financial statements in question are from 1998 through 2000 which PREDATES Sarbox reach. So they get to keep any bonuses or stock profits. That doesn't mean civil suits can't go after them and b
    • 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?

      Dude, the whole function of the corporation as we know it is designed as such to shield individuals [quicken.com] from direct legal action. That's why they're so popular.
      • That relates to the ownership of the corporation. Publicly traded corporations are owned by thousands or more people. Those working for them are not to be shielded simply because they are employees. They are the ones who did the deed. If someone steals from a 7-11 and works there, they should be punished.
        • Publicly traded corporations are owned by thousands or more people. Those working for them are not to be shielded simply because they are employees.

          I don't disagree with your general point. My comment was a pithy remark intended to generate a laugh response, commonly known as "humor" among the higher-level anthropoid species.
      • If the business goes bankrupt then yes, shareholders are only liable for the money they have already invested (it is probably a little more complex than this, but on the whole...).

        However, officers are not protected against negligence or fraud. Surely you have seen the news of proceedings against Worldcom and/or Enron executives.

      • Re:Fines are not enough (Score:5, Insightful)

        by corbettw ( 214229 ) on Thursday January 05, 2006 @11:30AM (#14400942) Journal
        Dude, the whole function of the corporation as we know it is designed as such to shield individuals from direct legal action. That's why they're so popular.

        Dude, you don't know what the hell you're talking about. Corporations shield their owners from bankruptcy and civil courts (to an extent). They do not shield the officers of those corporations from criminal charges. Just ask Enron Chief Accountant Richard Causey [cnn.com], who's serving seven years in jail for his role in the corporation's implosion. His old bosses, Ken Lay and Jeffrey Skilling, are about to get their day in court in the next few months, too. If they can find an impartial jury, that is (if they're smart, they'll try to plead out, but if they were smart they wouldn't have cooked the books in the first place...but that's another story).

        I don't know where this myth of corporations protecting people who out-and-out break laws came from, but it's not in the least bit grounded in reality. The cases where corporate executives get away with murder, figuratively and literrally, have more to do with state corruption than the legal fiction behind the "corporate veil". The infamous Union-Carbide tragedy was as much an exemplar of the corruption in certain parts of the Indian government as it was the amorality of company officials.
        • Mr. Causey and his ilk are the exceptions to a much more prevalent rule. Granted, capital offenses are not magically protected against by the corporate veil, but *much* malfeasance is perpetrated behind it and then ignored on the personal level because "I didn't know - punish the company please and leave me and my mansions alone".

          The new corporate accountability laws that were passed (in large part as damage control for the repeated implosion of companies where the c-level employees got fat and the investor
      • Dude, the whole function of the corporation as we know it is designed as such to shield individuals from direct legal action.

        Dude, the whole function of the corporation is to shield investors from direct legal action. If you commit criminal fraud, whether you did it for a corporation or for your grandma shouldn't matter to the judge that throws you in jail.
    • "Fines are not enough and hurt shareholders more than those who are responsible: the executives."

      Who are the people that voted the executives into their jobs?

      The more shares a holder owns, the more responsible they are for putting these yahoos into these positions to begin with, and the more their bottom line should hurt. Don't like it? Don't invest; that will certainly clean things up in corporate board rooms.

  • One of the oldest (Score:4, Funny)

    by IAAP ( 937607 ) on Thursday January 05, 2006 @11:02AM (#14400646)
    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."

    • There is a class called that. It's call Introduction to Auditing, which all accounting students take. What's bad is that the auditors for McAfee missed this.
      • My accounting 101 professor referred to his class as 'embezzlement 101' because, in his words, "the point of accounting classes is not to teach you accounting, but to teach you how to know when some one else is doing it fraudulently,"

        Five years later, my job is to envision ways to steal money from my company and then devise a method of detection. Audit accounting is mostly fraud detection after all.

    • 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."

      Were you a business student, by any chance? Just wondering because my school definitely did cover this in a required course for all BBA candidates. Actually, I believe it was covered in both my required marketing and accounting coursework.

      Just because you teach it, doesn't mean someone won't think they haven't found the "foolproof" way to implement i
    • It's called Business Ethics and it's a required class to get a Stanford MBA. Not sure about other schools. The fact of the matter is that it isn't about schooling (teaching / not teaching ethics) it's the mentality of the average business student.

      Example: In class we were presented with a senario: Company A has been riping off senior citizens under the former CEO, you are now CEO and discover this; what do you do?

      About 90% of the class (that's everybody except me) said "do nothing, but have a plan in case

  • Seems like a lot of companies are into hot potato. When did it become frowned upon to care about what happens to the business five or more years down the road?
  • And people wonder why they don't trust the government, the stock market, or anti-virus software to do what is right and correct. They need to run a thorough fraud scan on their accounting software and then quarantine the fraud.

  • if they're that corrupt (Score:5, Interesting)

    by Ender Ryan ( 79406 ) on Thursday January 05, 2006 @11:04AM (#14400665) Journal
    If they're corrupt enough to fuck their shareholders like that, I wonder what other lengths they're willing to sink to. Eg., I wonder if any of the anti-virus vendors actually create viruses themselves, so they can get one up on the competition by having the virus definitions already complete.

    I'm not making any accusations, of course, just food for thought. But, with all the corruption in corporate America these days, I'd actually be surprised if something like that hasn't taken place in at least one of the major firms.

    • I wonder if any of the anti-virus vendors actually create viruses themselves, so they can get one up on the competition by having the virus definitions already complete

      Not a new theory... IIRC back in the day AV companies would pay a "bounty" if someone came up with a new virus they (or their competition) hadn't seen yet. Thus making it tempting for some one to create a "virus" that may never actually get into the wild, but would score some bounty cash.

      Then company "M" could claim to scan for this new "BooB
    • The shareholders only really ended up getting fucked because they got caught. If everything had remained covered then the shareholders would have been quite happy with the situation. Infact, the only reason to do what was done, was to keep the share price high and the holders happy.

    • 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...

  • what interests me (Score:2, Interesting)

    by arieswind ( 789699 ) *
    what interests me is what norton/symantec is going to do, now that (one of) their biggest competitors is in such a position.
  • It's always easier and often more profitable to take the money and run then build for the future.
    • As much as I and other socialist-leaning types would like to believe that, it simply isn't true. Capitalism, per-se, isn't the problem, but our (America's) style of state corporatism which socializes risks and privatizes profits.

      Capitalism is an economic theory that says the economy will be most efficient when private enterprise competes in a free market. It is much a theory as is socialism or communism in that its implementation is not the same as its theory. It makes assumptions that are not always tru

  • Microsoft Rescue? (Score:4, Insightful)

    by bagboy ( 630125 ) <neo@nOSpam.arctic.net> on Thursday January 05, 2006 @11:06AM (#14400677)
    Seeing as how they (MSFT) are playing the anti-spyware role, maybe McAfee is ripe for a MSFT buyout and integration with Vista?
  • Hmmm... a company that cooks the books so they can lie to shareholders. What other unethical/illegal/standard business practices are they up to?

  • 50 million fine for a 500 million dollar fraud? (Score:5, Insightful)

    by Anonymous Coward on Thursday January 05, 2006 @11:06AM (#14400679)
    No wonder corporate fraud is so popular. Even if you get caught, the cost is less than the benefit.

    This will continue until a lot of these people end up in prison for a few decades.
    • The $500 million is the amount they mistated their earnings by, not how much they actually profited by committing the fraud.

      I agree that jail terms or some kind of punishment specically for the officers makes more sense than fining the company and giving the money right back to the investors, who are the ones who really paid the fine in the first place.

    • Well, it's not like they got to keep $500 million -- that was smoke and mirrors meant to prop up the stock by overstating earnings.

      That all came crashing down and the stock (from the summary, I haven't RTFA yet) lost <drevil>ONE BEEELLLIIIOOOONN DOLARS </drevil> in market cap.

      Assuming they didn't get out before the stock crashed*, they didn't benefit much.

      *yes, I realize that there probably was some profit taking during this period, but execs tend to have lots of stock compensation laying around
  • Never liked them anyways. 'Stuff was crap.
  • They probably figured they needed to do something. After all... a 800 lb gorilla (called Microsoft) just entered their space. So they are screwed anyways.
  • Sorta ironic...all of our machines here at the SEC building I work at have McAffee virus scan installed. Not having it updated to the most recent virus lists is something that's gotten me kicked off the network at least 3 times.

    --trb

  • Wonder how this was picked up (Score:3, Interesting)

    by kalpol ( 714519 ) on Thursday January 05, 2006 @11:08AM (#14400714)
    Since Sarbanes-Oxley has only been in effect since last fiscal year, I wonder if this was caught during a SOX audit or it just got outed on its own.
    • The summary is sadly incomplete. If you RTFA, the fraud in question was uncovered in December 2000 (when NAI missed their earnings), and this is merely the resolution of the resulting investigation. And at least part of the fine money could be distributed to investors.

  • WTF? (Score:5, Interesting)

    by Quixote ( 154172 ) * on Thursday January 05, 2006 @11:08AM (#14400715) Homepage Journal
    When it caught up with them, McAfee's stock price crashed, wiping out a billion dollars of shareholder capitalization.

    If I cause damage worth X dollars, you can bet your ass that I will be forced to repay the amount. And yet these guys get away with paying a nickel per dollar? Shouldn't they be forced to compensate the shareholders for their losses? Take it out of the paychecks of all of the top executives! Throw some in jail! At the very least, take back the money these executives made due to the artificially high price.

    • It was paper money. untill you actually sell your shares, the price of the share has no value. If you ad bought at 1$ and it went up to 2$ and then back down to 1$ you have not actually lost 1$. So most of that billion loast came froma fake billion gained. On the other hand a small number of people bid it up to the high value on false pretenses and they indeed did lose when the stock went down. Exactly how much they lost is not clear till they sell.
    • CORPORATION (n): An ingenious device for obtaining individual profit
      without individual responsibility.

      (Ambrose Bierce, I think)

    • Welcome to earth (Score:4, Interesting)

      by kahei ( 466208 ) on Thursday January 05, 2006 @12:16PM (#14401406) Homepage

      Shouldn't they be forced to compensate the shareholders for their losses?

      No. No, they shouldn't. The shareholders bought the stock hoping it would go up. It went down. The shareholders factored in various kinds of risk -- market risk, credit risk, compliance risk. Looks like they should have allowed more for compliance risk in this case, but that's life.

      Are you suggesting that whenever a stock goes down because of human stupidity/greed/malice, investors who were holding it at the time should be compensated?

      What about when a stock goes up? Should investors with short positions, be compensated?

      Who should do the compensating? I don't think McAfee has that kind of money now.

      I think it might be a lot simpler and fairer to just expect investors to take responsibility for their own investments.

      I also think that it's pretty fucking sad that the above is no longer intuitively obvious to everyone.

      • ...is that the company lied to get shareholders to buy stock. The evaluation of risk was based on financial information (among others) provided by - and falsified by - the company. The executives should be held accountable for the losses sustained, as, probably, should the auditing firm. It's individuals who did the lying, not the corporation.

        Now, had the fall in stock price been for some exterior means. For example, all the virus writers in the world burst into flame and the viruses in the wild mysterious

  • System Scan Results: (Score:3, Funny)

    by doit3d ( 936293 ) on Thursday January 05, 2006 @11:08AM (#14400717)
    ....16,284 files scanned. Warning! Unknown file found: CookBooks.exe Do you wish to Quarantine or Delete?

  • Damn (Score:3, Funny)

    by c0dedude ( 587568 ) on Thursday January 05, 2006 @11:09AM (#14400719)
    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?
  • is that all they've been up to? Like making viruses...

  • Honest mistake... (Score:5, Funny)

    by Andrewkov ( 140579 ) on Thursday January 05, 2006 @11:10AM (#14400732)
    I hear this was caused by an Excel Marco virus, only McAfee was to embarrased to admit it.
  • The death of McAfee is exaggerated. Look at the stock price [yahoo.com]over the last 24 hours: it's up 1 point...
    • When a legal investigation or action reaches some sort of determination, stock prices often increase, as some people will always bet that the outcome will be worse than it actually is, and so people are willing to then jump back in. The stock market is not a good judge of a company's future, as like betting on horse racing or roulette, everyone has a "system" that they think will let them win. It's all just gambling.

  • ... I can't find a company that want's me to take part in channel stuffing? What a great deal...

    1. Get paid to buy a ton of stock with an agreement not to sell it for x months / years.
    2. Tip off SEC.
    3. Supplying company dies.
    4. Sell stock.
    5. Profit!
  • So much for my three free months of system resource hogging antivirus protection that came with my new PC.

    This is yet another reason to go with Trend Micro.

  • Swan Song? (Score:4, Informative)

    by Bob(TM) ( 104510 ) on Thursday January 05, 2006 @11:18AM (#14400812)
    Apparently, I missed the analyst gloom/doom forecast. I did see this:

    Analysts said the settlement would close a chapter in McAfee's history and let the company focus on its market, which is expected to heat up this year with the entry of Microsoft.

    Here's their finance info on Yahoo [yahoo.com]. They seem to have a $4.73B market cap and are currently dead center of their year stock price range.

    Doesn't seem that damaging to them, actually - though they are in for a tough scrap when MSFT gets in the act.

  • McAffee? (Score:3, Informative)

    by imipak ( 254310 ) on Thursday January 05, 2006 @11:18AM (#14400814) Journal
    I think you mean Network Associates [nai.com], who bought McAffee years ago. Just after they'd bought Dr Solomon's, in turn, as it happens.
    • Check your own link... while I think the actual financial misreporting happened during the NAI days, NAI has since been split up and the successor company is, in fact, McAfee [mcafee.com].
  • These kinds of antics, while not always as dramatic, are widespread and endemic. Execs can and should be held accountable, but the kinds of incentives to "cram" within the last part of a fiscal period come from the revenue-reporting environment in which companies exist, namely from the cut-off cliff that ends a given fiscal period. I think it'd be a major step forward to get rid of this cliff, and replace it with a slope. For example: let 't' denote a value between 0.0 and 1.0 denoting how far into the c

  • Good riddance (Score:2, Interesting)

    by fuentes ( 711192 )
    I've been disgusted with McAfee for a while, but I finally had enough when my parents got a new Dell recently (which ships with McAfee for some configurations).

    I installed Firefox and made it the default browser. Then I tried to configure some of the advanced McAfee antivirus options. First, I couldn't even open the interface because McAfee must use IE (with ActiveX) to produce the GUI. Since Firefox was set as default, McAfee just spun and spun fruitlessly until I realized what was happening.

    Then, my la
  • Would somebody please tell me why nobody is going to jail over this? %%!@$* it torques me off when nobody in corporate america is ever held accountable for outright fraud and are allowed to continue to draw seven and eight figure salaries + infinite perks and incentives at the expense of employees, stockholders and customers.
  • Isn't it about time CEOs start going to jail for this kind of fraud and deception? How many folks lost their retirement portfolio when this scheme crashed?

    The fiction of the "CORPoration" - a "person" with even more rights and less responsibilities then a REAL person, a CORPUS, should be outlawed and people in charge held PERSONALLY responsible for these "corporate" crimes.

  • So (Score:2, Informative)

    by TheSkepticalOptimist ( 898384 )
    The CEO of McAfee will get a slap on the wrist, if that?

    Corporate execs are getting away with everything and not being held accountable for their actions. They are frauding stockholders, thats a crime, period. Yet someone with millions in assets can walk away from these issues without so much as reprimand.

    From Nortel to WorldCom, Exxon, etc, these companies are being run by crooks aiming to get themselves richer at the expensive of stock holder just trying to invest in something to pay for their retiremen

  • SENSATIONALISM (Score:5, Informative)

    by GodLived ( 517520 ) on Thursday January 05, 2006 @11:59AM (#14401256) Journal
    This story is being spun into sensationalistic crap. The story is, the fine is being levied by the SEC for, and I qtfa, "securities fraud ... during the period between 1998 and 2000." I used to work for McAfee, and I want to educate the community.

    All of what you know as McAfee used to be called Network Associates up until about 2004. It was formed in 1998 by a massive buy-up of various software firms, including Network General and McAfee Associates - hence the name, "Network Associates." During this reign, the CEO committed the fraudulent acts, including the channel stuffing as indicated, and was eventually fired in 2000 or 2001 for fraud. The new CEO, George Samenuk, took over and has since been credited with turning the company around, reestablishing the McAfee brand identity, focussing on the core products, cutting loose various deadwood (including, unfortunately, the research group that I worked for), and returning the company to legitimate profitability. At an all-hands (the one time Samenuk braved a visit to us research dweebs), he explained that the old regime consisted of "crooks," and that he vowed to be forthright with the SEC and do his personal best to fly straight. To my knowledge, he has done a good job of that ever since.

    This fine being reported today is a result of the SEC, acting in good government swiftness, merely enforcing a punishment for deeds done in the past, under different leadership. Take this news as no indication of the current state of the company or its leadership, but view it merely as a capstone to an unfortunate period in McAfee's history.

  • That explains that math (Score:3, Funny)

    by kalbzayn ( 927509 ) on Thursday January 05, 2006 @12:08PM (#14401334)
    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.

  • Just converted... (Score:3, Interesting)

    by BoldAndBusted ( 679561 ) on Thursday January 05, 2006 @12:43PM (#14401691) Homepage
    ...the single Windows machine in the house (my girlfriend's) to Trend Micro's PC-cillin a few nights ago. The box had been using McAfee for over a year, and I really didn't like how it seemed to refuse to auto-update, and manual update's often buggy use of Active X controls (i.e. IE). I really liked their Scanmail for Exchange product, and I'm glad to use it for client use now, as they appear to have worked out some kinks that were present in earlier versions.

    Yes, I can tell that PC-cillin also appears to use Active X for manual updates (would love to be corrected), but, in my case, the auto update works well, so there is no need to use the manual update. And I personally believe that the Trend Micro labs are quicker on the draw on new viruses and trojans, which, in the end, is what I pay for.

  • As someone said to me in '89.... (Score:3, Funny)

    by MrBandersnatch ( 544818 ) on Thursday January 05, 2006 @02:13PM (#14402655)
    "I cant trust something from a company called Make-A-Fee".

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