Fraud in Public Companies - Enron, WorldCom, etc.

Fraud will always be present when greed and self enrichment is a carrot.

It’s not at the same scale as before Sarbanes Oxley. The threat of jail time can help get your morals in line.

Just take one look at crypto companies, they are literally designed to enable fraud. Everyone in that kind of business transitioned to crypto companies over the last decade

Because of those three companies, Sarbanes-Oxley was created. Within the SOx act, the PCAOB (Public Company Accounting Oversight Board) was created.

So now, the internal controls are stronger with SOx, prohibiting the opportunity of major fraud, but also the external auditors are examined by the PCAOB, in response to Arthur Anderson being so bad at their jobs.

Someone mentioned, but SOx 404 also required the CEO and CFO to certify the financials, so if material fraud is occurring, they can be held personally and criminally liable.

Elizabeth Holmes & Theranos was the last big fraud I remember. Blood testing company that told investors it could do hundreds of tests with a few drops of blood. Story was completely fabricated.

Recently the cofounder and CFO of Supermicro SMCI using the company as a way to smuggle NVDA chips into China hasn’t been given enough press

Theranos at least produced prison time.

I didn't get into Big 4 until after Anderson imploded, but it's still mostly accounting majors that got a week of "how to audit RHEL" in Orlando. I've watched auditors take on prem mainframes out of scope for audits, and all kinds of other stupid shite. And partners with CPAs signed off on these audits.

The fraud just moves around like jelly being squeezed, but I think there is too much trust in what auditors under PCAOB oversight can actually catch. If a client is hiding or obfuscating something, an outsider doesn't have a great chance of catching it unless the right spidey sense gets hit.

You want to find fraud and incompetence? Look at anything with the word "transformation" in the title.

I worked for Anderson during Enron. Was unreal.

My aunt Toni (RIP) sounded the alarm on Enron 8 years before all the shite went down. And Ken Lay publicly castigated her for it.

Forbes: Hidden Risks by Toni Mack

It autocorrected. Arthur Andersen. NOLA office. Many people in our office worked on Enron.

Now the fraudsters just run for public office

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Someone on the OT is advocating that Scott Peterson is innocent and here is someone going to bat for Enron. It’s bizzaro world around here sheesh

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They’re going to bat for Arthur Andersen… and they’re right.

Outsmarting the current law doesn’t make you a criminal. One of hundreds of examples of congress not being able to act and then punishing private citizens for it.