BMW fined $18M for providing inaccurate retail sales information to investors
yourautoadvocate.com
yourautoadvocate.com
I'm sure it doesn't happen everywhere, but where your compensation and value is entirely determined by sales goals, this kind of thing goes on rampantly. For example, the Wells Fargo Account Fraud scandal came from exactly the same kinds of things--A massive drive to meet your goals at the expense of all else. Someone is close to their goal one month, and fudges something ever so slightly to make it; other people hear about it, and then it is routine.
Executives don't care because the numbers look good. Sales people don't care because they are hitting their numbers. Only when an outside force comes along does the house of cards come tumbling down.
i.e. You never should have had this much work put in the sprint, but the business decided that Deadline Driven Development was a part of their 'Agile' process. You wind up with 13-21 points when you normally can only do 8.
Naturally, corners are cut. Usually around unit tests. (And then everyone wonders why the tests are worthless)
One, peak capacity work is unsustainable over long term; there's no point in burning yourself out in the span of few months, because then you won't be doing anything at all.
Two, if your managers try to set up the workload at the level of your observed performance (or worse, try to squeeze more work by assigning a bit more things to do than were done the last time), then if you start going on afterburners, you'll set up an unrealistic baseline that you'll be later held accountable to. That's where cutting corners will start.
Three, systems with no slack are fragile. If everyone is constantly crunching and a genuine emergency pops up, nobody will be able to deal with it. There's probably some general principle in systems science that systems under full load are not optimal once you start doing risk analysis.
Good managers understand that, and will actively prevent you from getting yourself overworked - as developers are sometimes prone to do.
I'm by no means saying one should be a shirker, I mean you should manage your managers by understanding that their role is to get the most work out of you as possible. Leaving yourself a little leeway is just common sense, as you say, if you're working yourself to the bone constantly and giving people the impression that that's just your standard level, eventually something's going to give, likely your mental health.
But that drags your ratings down, not up. You do not look better by doing work slower. If you had an actual "ticket goal" to hit, then you'd be taking overtime, instead of buffer time.
https://news.ycombinator.com/item?id=24086106
https://en.wikipedia.org/wiki/Toshiba#2015_accounting_scanda...
> It seems that a fictitious transaction was made at the Toshiba subsidiary "Toshiba IT Service", which reminds me of that Toshiba legendary fraudulent accounting. Legendary accounting in which operating income exceeded sales due to over-manipulation of accounting and the wave getting bigger and bigger.
https://pbs.twimg.com/media/EOjN_NRU0AEEGUL?format=jpg&name=...
I would not be surprised to see a class-action from investors in addition to this fine.
I said in theory, because while that would be sweet, in practice our law is so complex that even huge CEO with tons of lawyers cannot really be sure he is abiding it. If you want somebody guilty it's just a matter of time invested, especially with the amount of activity that is taken by a whole company.
On the other hand, civil penalties (like fines) don't have the same burden of proof, which is why you often see them in situations like these. They are easier to prove. They generally only require a "preponderance of the evidence" to prove.
Of course this is a quantitative perspective that is not shared by high concentration discretionary investors like Buffet. Buffet needs to pick stocks with low idiosyncratic risk because he is not being paid a risk premium for it.
The fine was $18Mn, the SEC press release says BMW raised $18Bn from investors.
Remember me how many executives from GS got into prison for the 1MDB saga
Well, it is a financial crime for the purpose of profit by a corporation. Since you can’t jail a corporation, you have to disincentivize the law breaking. The only way you can do that is, at minimum, making the fine larger than the money profited from the crime. Otherwise that is not a disincentive, as it is a net positive to commit said crime. But since exposing these crimes is difficult, it is likely that the discovery of one crime is likely part of a pattern. So fining multiples of the profit would disincentivize even if the risk of discovery was low.
As for CEOs, they are both in a position extreme power, and profit massively from company profits. So even through inaction or apathy to criminal activity, they can profit while not holding any liability. I personally think that if you want to be in that position, you should be held “strictly liable” for what goes on under your watch. If you don’t want to take responsibility for what is done under your watch as a CEO making 10s of millions of dollars, don’t take the job.