Tuesday, June 2, 2009 - Meggy goes down - in flames Part XXXX - A rehash of what a thieving terd Whitman is
http://www.huffingtonpost.com/chris-kelly/meg-whitman-week---wednes_b_202767.html
Meg Whitman Week -- Wednesday: A Tawdry Episode
"Why did she risk the assault on her integrity and that of the company she has run so well? She certainly didn't need the money. Nor could she have been unaware of how unfair the practice is to small shareholders."
-- William G. Flanagan, Dirty Rotten CEOs, on Meg Whitman
"It's time to run California like a business."
-- Meg Whitman
Meg Whitman isn't the richest woman in California. She's only the fourth richest. In fact, she's barely the 897th richest person in the universe. And voters get that. That's what gives her that common touch you just wouldn't get from Queen Beatrix of the Netherlands.
And Meg Whitman earned her money herself. All $1.4 billion of it. It came from perseverance, patience and long hard honest work. Except for the $1.78 million from Goldman Sachs. Which she stole.
But she gave it back when they caught her. (Maybe there's a campaign slogan in that: "Whitman for Governor. If You Catch Me Stealing I'll Give it Back.") And the whole incident made her feel just awful.
She not only returned the cash, she emailed this note:
"The last 24 hours have been painful for me. There is nothing worse than having your integrity questioned under circumstances where you know that you did nothing wrong and followed all the rules. Given my experience yesterday, I plan to participate in the growing national debate about corporate governance and business ethics."
And since that day, her life has been charted by one lodestar and driven by one idea: The rules of corporate governance and business ethics must be loosened up.
But I'm getting ahead of myself.
It's like this:
Meg Whitman was the CEO of eBay. EBay's investment bankers were Goldman Sachs. EBay didn't have to hire Goldman Sachs to be their investment bankers, because this was a few years ago, when there were lots of banks, and not just the three we keep bailing out. Goldman Sachs was very grateful for eBay's business and they had a special way of showing their gratitude to eBay's executives. Goldman Sachs would let them buy shares in other companies whose initial public offerings they were underwriting. This was during the dot-com era and IPO companies often posted huge first-day gains. After Meg Whitman brought eBay's business to Goldman Sachs, she bought shares in 100 Goldman Sachs IPOs one day and sold them the next day. She made 1.78 million dollars.
It was a good day's work.
Don't think of it as a kickback. Think of it like Discover, the Card that Pays You Back.
Former SEC commissioner Steve Wallman had a less nice way to describe it:
"It's a black-and-white corporate bribery issue."
Who else was getting Goldman Sachs' insider trading frequent flier miles? People like the hardworking executives at WorldCom and Enron chairman Kenny Lay.
The process was called "spinning." Sorry, you're not allowed to do it anymore.
In 2002, a House Financial Services Committee found out about it. And so did eBay stockholders, who then sued their own executives for breaching their fiduciary responsibilities to the company by insider trading and not bringing enough for everyone.
Whitman and other eBay executives settled the suit by paying three million dollars, while denying that any of the allegations were true. Goldman Sachs kicked in another 300 grand.
By complete and total coincidence, Meg Whitman had been given a seat on the board of Goldman Sachs. She was forced to resign in disgrace. She'd been there 14 months. Which reminds me of my favorite line from Wall Street:
"You'll have the shortest executive career since that Pope that got poisoned."
It must have hurt. To a grade-grubbing ass-kissing resume-polisher like Meg Whitman it must have really, really hurt.
I think it's the whole reason she's running for governor. I think she doesn't just prattle on about cutting unfair regulations all the time because it's a Republican talking point. It's personal. She broke a rule. So the rules must be wrong.
I think what she really wants is vindication for her shame.
I don't think she wants to be governor for the fame or the power. And she's made it abundantly clear that she doesn't want the job so she can help anyone.
I think she thinks the people of California are the tools of her absolution.
http://www.sacbee.com/politics/story/1887681.html
Whitman's IPO stock deals have critics raising ethics issues
By Andrew McIntosh
amcintosh@sacbee.com
Published: Sunday, May. 24, 2009 - 12:00 am | Page 23A
Along with considerable acclaim for her business acumen, former eBay chief executive Meg Whitman attracted controversy and criticism for accepting exclusive opportunities to invest in initial public stock offerings during the thriving dot-com era.
The practice led to a shareholder lawsuit against Whitman and others. It also exposed Whitman to the national political scene when her investment drew a public thrashing by Congress.
Now, as a contender for the Republican gubernatorial nomination in California, Whitman may face deeper scrutiny for her involvement in the since-banned financial practice called "spinning."
She has repeatedly insisted that an investment firm gave her access to more than 100 IPO stocks because she was one of the firm's wealthy private clients, not because she picked the firm to handle eBay's own IPO.
That explanation didn't wash with a Delaware judge, however. In a 2004 preliminary ruling in an eBay shareholders' lawsuit, the judge accused Whitman and other company executives of a conflict of interest.
Whitman and two others settled the lawsuit in 2005, admitting no wrongdoing.
How Whitman handled herself when those stock dealings came to light is particularly pertinent to her potential run for governor, according to David Shapiro, a professor at City University of New York, who specializes in financial fraud and corruption.
"She had no understanding of the appearance of impropriety," Shapiro said. "She didn't apologize. She didn't acknowledge in hindsight that it didn't look good.
"The question now is: what will become of all the conflicts of interest that come before her as governor?"
A $1.7 million spinning profit
Whitman's brush with what grew into a political controversy came during the Internet boom and bust cycles in Silicon Valley, between 1998 and 2002. It involved a financial practice called spinning, which was legal until 2003.
Major brokerages allocated shares of hot IPOs (initial public stock offerings) in technology companies to top executives at other firms.
Investment firms used "spinning" frequently during the Internet boom. It involved offering a company's executives and board members personal shares in IPOs as a reward for giving the investment firms corporate business. Investment firms initially denied that was their motive, but later agreed to ban the practice.
The firms offered key executives shares at starter IPO prices not then available to ordinary retail investors. The executives resold their shares within days, making millions.
After Wall Street whistleblowers exposed the practice, small investors and state and federal lawmakers were outraged.
Whitman was accused of spinning because of her dealings with investment giant Goldman Sachs of New York, one of the oldest Wall Street investment firms.
As eBay's chief executive in 1998, Whitman had hired Goldman Sachs to help take her company public through an initial public stock offering on Nasdaq.
A year later, eBay used Goldman Sachs for a second stock issue and the firm was hired again to advise eBay as Whitman led a takeover of PayPal in 2002.
For all of those services, eBay paid Goldman $8 million.
Starting in 1998 and through at least most of 2002, Whitman also was a private banking client of Goldman Sachs.
During that time, Goldman allocated to her between a few hundred and a couple of thousand shares in more than 100 hot dot-com IPOs, at the starting price. As the stocks surged, Whitman sold her shares, making a $1.78 million profit, she later acknowledged.
Whitman insisted then that the practice was common and legal, and continues to maintain she did nothing improper, said Henry Gomez, a former eBay executive who is now her senior campaign spokesman. Whitman declined to be interviewed by The Bee.
Shapiro, the New York professor, and federal and state lawmakers saw the stock deals rather differently. "A quasi-kickback," Shapiro told The Bee in a recent interview.
Fellow eBay executive Steve Westly, who later became state controller and ran for governor, also was accused of making $1 million by spinning IPO trades through a rival brokerage, Robertson Stephens, that also did work for eBay.
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