Anon
| Does everyone here read before they speak?
This post isn't directed at anyone in particular. It's just an attempt to get the discussion back on track and centered around fact instead of speculation. There seems to be a lot of unfounded accusation on this site written with little thought.
I've read the complaint that these attorneys filed in District Court. It's posted on the website of one of the law firms. In the complaint they show some fairly good evidence to point to wrong-doing on the part of the underwriting firms, yet the evidence is still not mature. It's speculative, and depends on the findings of on-going investigations by the SEC. Apparently, the SEC has reason to believe that several Underwriting Firms used the questionable tactics mentioned in this article to inflate the prices of IPO stocks. However, they are still investigating. If the findings are conclusive, this case holds water against the Underwriters. If not, it will be thrown out of court.
The evidence against Covad and its officers is purely speculative, and there isn't much in here that leads me to believe that they can prove the accusations. Basically, it states that if the Underwriting firms were using questionable tactics, the corporate officers had to know what was going on by virtue of their positions. That's going to be pretty difficult to prove.
This all occurred during the stock boom of '99 and '00. So, they are stating that the corporate officers had to know that something was inflating the price of the stock, and they should have investigated. Covad stock was increasing in price like every other tech company with an idea and a few engineers working to put it together. Why would they have reason to question it?
The relationship of a corporation to an underwriting firm is like the relationship of a corporation to a public accounting firm. You would assume that for the money you're paying, the company is doing right. If your accountant is doctoring the books and embezzling money from you, are you neccesarily going to know about it? You may find out about it eventually, in which case you fire the bastard. If he's not overly greedy, and only does for a while, you may never find out about it. Just because you're a corporate officer doesn't mean that it would be instantaneously evident - particularly if he's doing a damned good job of covering it up. Nor does it mean that you would be directly responsible for his actions, unless of course you were assisting in the cover up.
The SEC investigations aren't even over yet, so they really don't know if they have a case. My thought is that they've filed it to get ahead of the game since it could take a few years to get a verdict.
As far as the evidence linking Covad and its officers, good luck gentlemen. |
Thanks.