Jordan came back with an answer that I did not expect: “Ben, I’ve gone over the law six times and there’s no way that this practice is strictly within the bounds of the law. I’m not sure how PwC justified it, but I recommend against it.” I told Michelle that we were not going to implement the policy and that was that.
Well, that was that for a while. Then, almost two years later, the SEC announced that it was investigating Michelle’s previous company for stock option accounting irregularities. This started a massive investigation of all Silicon Valley companies and their stock option accounting practices. All told, more than 200 companies were found guilty of some sort of irregularity.
Source: Why I Did Not Go To Jail – Andreessen Horowitz
Why this single incident didn’t put PwC out of business is just literally beyond me. How one of the “big four” auditing firms can sign off on something that put 200 companies under indictment by the SEC ought to cause them to be forced out of business by the government, just on the face of it. At least the auditing arm of Arthur Anderson was split off after Enron, and went kaput. According to this writer — who expands on the backdating story — there were hundreds of millions of dollars in settlements, and all the auditing firms walked away unscathed.
This is another case like the housing crisis. The “big three” ratings agencies of Wall Street — which supposedly exist as a 3rd-party check on investments being offered for sale — were shown to be completely fraudulent. They allowed the crisis to happen by lying about the bonds in the first place, then stonewalled rating them accurately when the party started to crash, to give time to the big investment banks to shore up their positions.
I feel like I’m taking crazy pills here. Why would the government look the other way at any of this? It’s because you can’t neatly assign this government malfeasance to a political side. It transcends Right or Left. So the populace squabbles on social media about the social controversy of the day, while Congress argues about the size of a second government check in the course of a year, and both just ignore how the kings and emperors of our modern feudalistic system are taking over more and more of the system for themselves.
It was supposed to be a government OF the people, BY the people, FOR the people. Now it’s a government OF campaign donor recipients, BY campaign donors, FOR company executives. And you don’t have to look very far back to see how this is working out for us since Citizens United, just 10 years ago.