The Enron scandal is sending ripples across Silicon Valley, where fast moving companies and once-burgeoning dotcom companies worked the edges of lawful accounting practices.
Computer graphics chipmaker Nvidia was the the latest victim of the so-called "Enron-itis" Friday. Its stock price tumbled after an announcement the company was conducting an internal accounting practice probe.
Nvidia said Thursday that a January inquiry from the US Securities and Exchange Commission prompted an "internal review of the recording of certain reserves and the timing of recording certain expenses."
In November, the SEC announced it had charged 11 Nvidia employees with using inside information regarding an upcoming announcement of a lucrative contract with Microsoft's Xbox division. That insider information, the SEC alleged, resulted in windfall profits on Nvidia stock for the employees. The SEC said that probe is still ongoing.
Several days earlier, David Thatcher, president of Internet services company Critical Path, pleaded guilty to charges of securities fraud for manipulating his company books to pump up revenue figures. Thatcher's lawyer said the executive is cooperating with authorities in further dotcom probes.
The Thatcher affair is especially troubling for the legions of former dot-com executives here who have long faced accusations of creative accounting as their firms burned up cash.
As far back as December 1999, the SEC was calling for new accounting guidelines. The new guidelines were needed to guarantee that the growing number of dotcoms were reporting their revenues accurately, said Chartered Accountants magazine.
Thatcher now faces a possible five-year prison sentence and a US$250,000 fine. The San Francisco SEC office has been especially enthusiastic in getting the word out on Thatcher's cooperation in the hope of flushing out other wrong-doers. "We want to see what else we can shake loose," said one SEC investigator.
The growing financial scandals are fast becoming the most-talked about subject here, where some are still living off stock earnings from before the Internet bubble burst.
"It has certainly brought a whole new dimension to the post-bubble landscape," said Michael Perkins, author of The Internet Bubble.
LIMITS: While China increases military pressure on Taiwan and expands its use of cognitive warfare, it is unwilling to target tech supply chains, the report said US and Taiwan military officials have warned that the Chinese People’s Liberation Army (PLA) could implement a blockade within “a matter of hours” and need only “minimal conversion time” prior to an attack on Taiwan, a report released on Tuesday by the US Senate’s China Economic and Security Review Commission said. “While there is no indication that China is planning an imminent attack, the United States and its allies and partners can no longer assume that a Taiwan contingency is a distant possibility for which they would have ample time to prepare,” it said. The commission made the comments in its annual
DETERMINATION: Beijing’s actions toward Tokyo have drawn international attention, but would likely bolster regional coordination and defense networks, the report said Japanese Prime Minister Sanae Takaichi’s administration is likely to prioritize security reforms and deterrence in the face of recent “hybrid” threats from China, the National Security Bureau (NSB) said. The bureau made the assessment in a written report to the Legislative Yuan ahead of an oral report and questions-and-answers session at the legislature’s Foreign Affairs and National Defense Committee tomorrow. The key points of Japan’s security reforms would be to reinforce security cooperation with the US, including enhancing defense deployment in the first island chain, pushing forward the integrated command and operations of the Japan Self-Defense Forces and US Forces Japan, as
IN THE NATIONAL INTEREST: Deputy Minister of Foreign Affairs Francois Wu said the strengthening of military facilities would help to maintain security in the Taiwan Strait Japanese Minister of Defense Shinjiro Koizumi, visiting a military base close to Taiwan, said plans to deploy missiles to the post would move forward as tensions smolder between Tokyo and Beijing. “The deployment can help lower the chance of an armed attack on our country,” Koizumi told reporters on Sunday as he wrapped up his first trip to the base on the southern Japanese island of Yonaguni. “The view that it will heighten regional tensions is not accurate.” Former Japanese minister of defense Gen Nakatani in January said that Tokyo wanted to base Type 03 Chu-SAM missiles on Yonaguni, but little progress
NO CHANGES: A Japanese spokesperson said that Tokyo remains consistent and open for dialogue, while Beijing has canceled diplomatic engagements A Japanese official blasted China’s claims that Japanese Prime Minister Sanae Takaichi has altered Japan’s position on a Taiwan crisis as “entirely baseless,” calling for more dialogue to stop ties between Asia’s top economies from spiraling. China vowed to take resolute self-defense against Japan if it “dared to intervene militarily in the Taiwan Strait” in a letter delivered Friday to the UN. “I’m aware of this letter,” said Maki Kobayashi, a senior Japanese government spokeswoman. “The claim our country has altered its position is entirely baseless,” she said on the sidelines of the G20 summit in Johannesburg on Saturday. The Chinese Ministry
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