[Am-info] Microsoft fraud

[John Poltorak]

I keep reading Bill Parish's web pages:-

http://www.billparish.com

where he keeps going on about Microsoft's fraudulent use stock options to 
mask the true trading position.

As much as I would like to believe, it doesn't seem to make any sense. 
They are a cash rich company even though the stock price is dropping.


One article contains the following sections:-


For the quarter ending Dec.  31, 1999 Microsoft also collected cash in the
options market of almost $200 million, betting the stock will not decline.  If
Microsoft guesses wrong and incurs significant losses on the options they will
simply issue more stock.  There are now more than 6 billion total shares
outstanding, meaning that a $1 change in Micro soft's stock price changes the
overall market value by $6 billion.  Microsoft's gross annual revenues are $25
billion or roughly equivalent to a change in the stock price of $4 per share.
Senior citizens may recall this as "watered stock."

Microsoft's internal auditor, a respected Deloitte and Touche accounting
veteran, noted in a separate issue that earnings manipulations designed to meet
expectations were illegal and constituted fraud.  He was given the option to
resign or be fired and settled for $4 million under the Federal Whistleblowers
Act.

By not disclosing this situation at Microsoft, the Federal Reserve is further
destabilizing the economy by raising interest rates since most traditional
companies have bank debt and the greater interest expense will affect their
reported earnings.  Microsoft's debt is stock option debt, and even though
leveraged and more than twice annual gross sales, it has no related interest
cost.  Now that's bad policy for anyone on Main Street.




 
Given that the share price has been falling consistantly since the turn of 
the year, and is now almost at an all time low, what are the implications 
of this for Microsoft employees who only seem to get paid in stock option 
rather than in real money?

Who is the former internal auditor and how do we know that he said what is 
reported above?

And what is this Federal Whistleblowers Act anyway?


-- 
John