The NY Times tells the story fairly well. Although it sounds like bad news, it is actually great news for the company. The key is the word "ex-executives". Former senior executives of the company have been indicted for inflating revenue in order to drive up stock prices. All of these people were booted from the company prior to my joining the company in early 2003.
The good news is in the rest of the story:
- no criminal charges against the company
- the fine is exactly what the company had withheld from last year's earnings
- the outstanding stockholders' lawsuit is settled for the amount that was withheld from last year's earnings
- the former chairman has agreed to return salary and stock to Symbol
The big deal from the company's point of view is that the sword that has been held at the company's neck has been withdrawn by the Justice Department and the company can now proceed into the future without worry.
So how did the company do so well with the Justice Department? By fully cooperating in the investigation, by removing all employees (no matter how high up) involved in illegal activity, and by opeing their books up to a complete audit to discover the true financial situation of the company. The United States Attorney for the Eastern District of New York, Rosalyn Mauskopf "recognized the efforts of a company like Symbol to 'boot' out fraud and admit criminal conduct and making victims whole, as well as making sweeping changes to restore confidence in the market."
I think this is an example for all companies that discover illegal activity. Don't try to hide it. Make full restitutuion. Remove the guilty parties. This is the only way to insure that your company can survive.
So how is Symbol doing under its new management? Fantastic! The company has a large cash reserve with little debt and revenue and profits are increasing at a dramatic rate.