4 ms·

So all the Sox compliance in the world did nothing to prevent this fraud?

by mc32 5y ago

simonh 5y ago
You mean the fraud that's been uncovered and successfully prosecuted? Unfortunately the article and press release don't disclose how this came to light, unless you know something more?
elliekelly 5y ago
Netflix identified the issue and filed a civil suit against him alleging fraud before criminal charges were brought by the DOJ. It’s very likely Netflix tipped them off. https://www.bloomberg.com/news/articles/2014-11-26/netflix-claims-former-executive-took-kickbacks-on-sales https://www.bloomberg.com/news/articles/2014-11-26/netflix-c...
vkou 5y ago
Laws don't prevent murder, but they are an after-the-fact tool we can use to beat a killer over the head with.
- mc32 5y ago
  Agreed, but we already have laws against fraud and bribery. The controls are the things that don't seem to be very effective at stopping fraud.
  - dymk 5y ago
    The prosecution serves as a warning to those thinking they can do the same thing. Had these compliance laws not existed, there would be no incentive to _not_ commit fraud. Unless you think nobody is going to look at this and go “these are consequences that could apply to me”? SOX compliance builds a paper trail so crimes like this are recorded and uncovered.
grantc 5y ago
Very little in SOX scope is going to detect transactions outside of the company such as these. SOX is primarily about having effective mechanisms to assure that the financial information you report is accurate and complete, and then those mechanisms are inspected internally and audited externally. SOX is about what happens inside a company and with a companies resources -- you might have different means of preventing an employee from exfiltrating the company's money, and those are SOX-scoped. Being able to detect whether a given employee has taken a bribe from a vendor might trip over SOX-relevant things incidentally but not directly. For example, you might need to certify that every employee has taken anti-bribery training every year, and that's your preventative mechanism so at least employees know what is permissible and what the consequences are.

So all the Sox compliance in the world did nothing to prevent this fraud?

by mc32 5y ago

So all the Sox compliance in the world did nothing to prevent this fraud?

You mean the fraud that's been uncovered and successfully prosecuted? Unfortunately the article and press release don't disclose how this came to light, unless you know something more?

elliekelly 5y ago

Netflix identified the issue and filed a civil suit against him alleging fraud before criminal charges were brought by the DOJ. It’s very likely Netflix tipped them off. https://www.bloomberg.com/news/articles/2014-11-26/netflix-claims-former-executive-took-kickbacks-on-sales https://www.bloomberg.com/news/articles/2014-11-26/netflix-c...

vkou 5y ago

Laws don't prevent murder, but they are an after-the-fact tool we can use to beat a killer over the head with.

mc32 5y ago
Agreed, but we already have laws against fraud and bribery. The controls are the things that don't seem to be very effective at stopping fraud.
- dymk 5y ago
  The prosecution serves as a warning to those thinking they can do the same thing. Had these compliance laws not existed, there would be no incentive to _not_ commit fraud. Unless you think nobody is going to look at this and go “these are consequences that could apply to me”? SOX compliance builds a paper trail so crimes like this are recorded and uncovered.

grantc 5y ago

Very little in SOX scope is going to detect transactions outside of the company such as these. SOX is primarily about having effective mechanisms to assure that the financial information you report is accurate and complete, and then those mechanisms are inspected internally and audited externally. SOX is about what happens inside a company and with a companies resources -- you might have different means of preventing an employee from exfiltrating the company's money, and those are SOX-scoped. Being able to detect whether a given employee has taken a bribe from a vendor might trip over SOX-relevant things incidentally but not directly. For example, you might need to certify that every employee has taken anti-bribery training every year, and that's your preventative mechanism so at least employees know what is permissible and what the consequences are.