Fake job interviews are securities fraud
bloomberg.com
bloomberg.com
These cases all come down to a very simple thing: "Don't lie if you're a publicly listed company". Which is an enormous boon to society if enforced, like it is indirectly through these lawsuits.
Fake job interviews aren't securities fraud - as long as you don't lie about them. Bad passwords aren't securities fraud - as long as you don't lie about them. It has become entirely second nature for companies to lie about everything; there's a whole industry around it (usually known as "PR"). These lawsuits can disrupt this status quo. Stop saying A and doing B. All these cases are very clear in that the company said A without even doing A at the time. It's not like they were forced into either saying A or doing B. Both Wells Fargo and Solarwinds could very easily just not have made false claims wrt diversity and security. They willingly, knowingly did so.
But it's hard to see how to have a "Fake job interview" without lying, as the publicly listed job would itself be a lie. Or in the example given, the "diversity" candidates interviewed without any real intent to consider them for the job, were lied to.
yes, I see that this is covered better in the article.
Make a web crawler that hits publicly traded tech companies careers page, once a day, and tracks how often their job listings change. Make a big line chart at the top of a landing page that compares the different companies job openings (by count), over time. Penalize listings that list/delete/re-list job openings to always make it seem like they are hiring. Maybe have a max time a job post can be open before it's no longer part of their count (3 months?)
What you'll end up showing is similar to this article: A lot of company's stock is evaluated on growth, and part of the growth estimation is based on how much they are hiring in this down market. Some companies know this, and are trying to game the system
Anyways, I bet a decent amount of people would watch that like a hawk, and the honest companies would love it because it would show how great they really are doing
My company keeps a req open on the off chance somebody in the domain (CAD data translation) will see it and apply. It's a small enough niche that if somebody with the right skillset comes along we'd like a chance to hire them, even if we're not in dire need of people at that particular moment.
I guess technically we're passively looking.
What would happen is the information goes ignored for the corps in good graces, and used negatively for the ones already going under as a small bullet point.
If you want markets based on sane economics this isn't the one to be in.
https://www.sec.gov/enforcement-litigation/whistleblower-pro...
1) Provide a paid service for users to get more pro level insights. Targeted at job seekers who don't want to waste time.
2) Expand into a job board where only companies that pledge not to engage in such tactics can advertise.
In other words, there are some legitimate reasons for a job posting to be indefinite, even if it doesn't seem common for software engineering jobs in particular.
Seems too easy to be abused.
Churn could mean many things, not necessarily a bad sign
But sure, that doesn't happen often in tech because they would hire a consultant or a specialized contractor for such roles of its necessary and very specialized.
> But the financial system can: The bad thing that Wells Fargo did caused its stock to drop, which is a good rough measure of how bad it was. The shareholders perform the socially useful service of measuring the badness [...]
I think this is a really interesting point - assuming the actors in the market who are buying and selling stocks share the same general morals of the rest of the population, they can penalize companies that do bad things. But that would mean market forces would need to act on moral grounds and not on profit motives.
funds don't share those morals
In a functioning market customers (whether consumers or enterprise purchasing decision makers) tell you to take a walk if you act with bad will in any kind of consistent way.
There isn’t much money to be made in markets that are both of “mature” and functioning.
Why do people say things like this?
I’m not nitpicking: this a la carte treatment of market capitalization neatly severed from what anyone would be willing to pay, warped by the prospect of intervention and other insidious capture is why we’re discussing this embarrassing cavalcade of depressing behavior on the part of the executives in the first place.
Goodwill isn’t germane only to risk arbitrage discussions, it is (among other things) how the accountants keep track of the impact on value that accrues to piece of shit finance guys pulling stunts like this one.
Goodwill has a meaning which isn’t related to market cap due to a bad news day.
> Meeting the increasingly diverse needs of Wells Fargo’s global customer base is critical to our company’s long-term growth and success.
This is a part that he takes on faith which is completely unsupported. What the market is really doing (assuming rationality) is judging how much any punishment Wells Fargo might receive from regulators, customers, counterparties will alter the net present value of the stock.
That's a dangerous idea as it presumes that shareholders are investing not for profit but to improve "goodness" in the world. This is obviously not true.
The shareholders are providing the economically useful service of measuring _risk_ to those future profits. These two factors may be linked through an abstraction but they are most definitely not equivalent.
> they can penalize companies that do bad things
Without journalists to expose the bad things in the first place the investors can do no such thing. There is no mechanism in place to discover these facts and there is no effort to build one independent of journalism.
Isn't that backwards? Investors are a major funder of journalism in the broad sense, and one of the few robust revenue sources left for it.
I see it as an advertising driven industry. I'm not sure how investors could be funding it directly.
> and one of the few robust revenue sources left for it.
That there are publications meant for investors does not mean investors can be seen as the revenue source. The advertisers looking to get in front of investors are the source.
If someone was investing in news for it's own sake then why is the quality of the information presented so poor? You'd almost have an easier time making the case they invest to _intentionally_ obscure the process of reporting facts.
Financial-oriented news tends to be noticeably better than other kinds. Often the best widely-published journalism in the UK will be in the Economist or the FT, for example, and some more specialised publications allegedly have even higher standards.
This is part of their public articles.
It presumes that shareholders' only objective is to maximize the share price.
From Wells Fargo's reports to investors, it's clear that management believed that investors would interpret successful diversity efforts as important to maximize the share price.
After the diversity rules were suspended, the share price dropped.
It's nearly impossible to prove cause and effect, but the plaintiffs don't have to prove direct causation. They only have to show that management misrepresented the facts in reports to investors, that the false statements were material, and that investors suffered a loss at that time.
What is a "direct response"? Any change in price is still the result of individual actors expressing directional opinions.
In any event, this sort of news generally does not move the fundamental value of the business in a way that exceeds the "uncertainty band", so pretty much all of the active trading is necessarily in anticipation of how others will view the news.
This is in contrast to e.g. merger offers, which are much more about the actual value of the business (which has suddenly become very concrete and precise), and not trying to judge the reaction of others. But major events like that are a small minority.
this is a sad truth for lots of things. Like folks who collect, then lose private information. It is wrong and bad, but rarely quantifiably so in court.
Employees having a really bad time at a company because it keeps doing bad things have to be able to quantify that bad time in dollars, and that's hard.
It's interesting to think of how we could adjust the legal system to allow for emotional distress, environmental damage, morally bad actions, etc on their own terms without having to convert them to monetary damages. Make it easier for a court to judge executive decisions on moral grounds and that makes it easier to claim damages for bad decisions and that makes it easier to keep companies behaving morally.
Morals are subjective and fluid. They are effectively areas where society has "agreed to disagree".
Morals that society agree on are codified into laws. The legal system is set up to enforce and uphold laws. It cannot uphold morals because they are not law.
As executives we allowed alcohol at the year end party. If some of our group gave a moral position of no alcohol (say Mormons or Muslims) is that morally incorrect for us yo allow it?
What if said objector imbibed at the event? Are we "morally responsible"? Who gets to decide and tell us what is morally ok or not ok?
There are endless examples of legal actions which are utterly immoral.
I agree that morals are personal and differ between individuals. Though that's not an opinion that religious folks accept: they hold that morals are defined by their deity and codified in their sacred texts. I'm glad we don't recognise that codification in our laws (though some countries do).
Having said all that, there are some pretty clear cases where companies are acting immorally; against the interests of their employees, customers, etc and generally against the interests of humanity. It would be cool to be able to call this shit out in a court without having to monetise the damages.
And I agree that some laws are immoral. Either because morals have changed while the law has remained static, or because the elected people who wrote the law themselves behaved immorally (and subsequent electees have not sought to reveal them.)
But the place for pointing out immoral behavior is not the courts. And the penalty for such behavior is our wallets - if you don't like a company, don't doend your money with them.
This is inaccurate, and the article itself actually contradicts itself by showing that it's inaccurate.
They can penalize companies for lying. If the companies just stop lying that they do/will do/will not do/don't do a certain thing, there's no securities fraud. The issue is that they lie about it.
> To some extent you have to manage a big organization with simple, crude, legible metrics. In a big enough organization, somebody will game those metrics. Ideally you create a culture that minimizes that gamesmanship, one where employees understand and buy into the organization's real goals rather than just trying to maximize the dumb metrics. Wells Fargo seems to be having some trouble creating that culture.
It's really just a fantastic example of Peter Drucker's famous adage "Culture eats strategy for breakfast." And it's why I get very wary of any large organizations that focus too much on data-driven goal setting (OKRs and the like) without having some way of stepping back and doing a reality check. To be clear, I actually like OKRs if they are used correctly to help prioritize and focus, but too often I've seen them become a weird, gameable time sink.
This ideal culture is like unicorns and rainbows - some of it exists under very specific atmospheric conditions and some of it, when you look closely, is really just a horse with a toilet roll on its forehead sprinkled with glitter.
Because yes, in the US I rather suspect that this comes from high school and college sports worship. Winning is what it's about and someone who bends the rules to win can probably be put to good use and should be promoted to where they can do the most damage?, bending?
[0]: https://www.bloomberg.com/opinion/articles/2021-02-03/goldma...
Turns out this is trivially true, because the game theory for rational corporations (and its executive decision makers) clearly suggests that on net, lying all the time is very, very profitable.
That's obviously only true if you remain a shareholder, but given the majority of stock generally doesn't change hands it seems like most people who are being represented as the victims in these lawsuits are worse off. Shouldn't the people who remain shareholders be able to exclude themselves from the suit, thus shrinking the size and maybe making it cheaper to settle? (It is possible this is a thing you can do, I've just never heard of it.)
Typically shareholder lawsuits are brought by minority shareholders (or, as you say it’s pointless) seeking to get paid to compensate for some malfeasance they feel was being perpetrated against them by the majority shareholders (and management, as their agents).
I don't know if this is true - I just asked Claude and it said the type of lawsuits I described are significantly more common, at least among suits against public companies.
But regardless of relative frequency, you say it's pointless, so why does it happen? (The answer seems clearly to be because the lawyers want it to happen, but still seems like it's a very inefficient process for most shareholders.)
Minority shareholders don’t control the cash held by the company so they need to sue to get access to it.
Wouldn’t they be better served by actually just doing their job? As far as to dissuade future malfeasance?
They already have all the control and power.
If they are the majority shareholder, suing the company they are the majority shareholder in for some tort has about as much point as suing themselves for punching themselves in the face.
They could literally just do a board consent to pay themselves directly instead if they wanted to. Or direct their management to do it, since they can literally fire that management otherwise (minor edge cases of bylaws withstanding).
A minority shareholder potentially has a lot of reasons to do a shareholder lawsuit though, especially in a privately held company where they can’t easily sell their shares.
They might be getting drug along on all sorts of silly wasteful misadventures, for instance, and have no control or way to get out.
Sounds like a Causal Decision Theorist. Every other rational decision theory supports suing under some circumstances, and refusing to settle under some circumstances; even when the expected monetary return (considered in isolation) is negative.
Also, oftentimes the bad action of the management impacts the value of the company. The past malfeasance and fraud committed by Wells Fargo is an excellent example of that, where it moved to criminal liability.”
But secondly, there's the meta game. If you're a good lawyer and you spot some company doing something egregious you can go shopping. Go and find a shareholder and say "Hey, we can sue that company, I'll take care of all of it, I just need your name because you're a shareholder". You can then conduct a massive expensive lawsuit against the company and if you win? They have to pay your exorbitant costs. Going back to the Musk example, the shareholder who sued to reverse the compensation package had a derisory number of shares, but the lawyers who took on that case are now asking for something like $5Bn in costs. That's a pretty nice payday, and in some ways it works like a bounty against companies with poor governance.
There’s clearly a huge disconnect between the numeric targets they set and the resulting behavior of employees. That’s always a hazard, but I wonder why it’s such a pattern at WF
See also: https://superbowl.substack.com/p/beware-the-variable-maximiz...
If unqualified people get their time wasted by being invited because they fulfill some diversity quality, but no skill quality; I'll put the blame on the system that imposes the rule.
For example, if someone selling a house chose which prospective buyers were allowed to tour the house based on race, I assume that would definitely be illegal, even if the "final decision" on who to sell to was ostensibly not based on it.
I think the courts would take a dim view of claiming that a procedure to partly mitigate bias regarding attribute X is somehow illegal discrimination along the same attribute.
I can't speak to the truth of that assertion but they definitely believed it was the case.
I haven’t seen this style choice before.
https://apnews.com/article/entertainment-cultures-race-and-e...
> In some ways, the decision over “white” has been more ticklish. The National Association of Black Journalists and some Black scholars have said white should be capitalized, too.
> CNN, Fox News and The San Diego Union-Tribune said they will give white the uppercase, noting it was consistent with Black, Asian, Latino and other ethnic groups. Fox cited NABJ’s advice.
> CBS News said it would capitalize white, although not when referring to white supremacists, white nationalists or white privilege.
Oh, interesting - so would I be correct in saying that "white supremacists" are people thinking that White people are superior to others, whereas a "White supremacist" is a White person who is a supremacist of some group, e.g. "A White male supremacist"?
It is why African-American has dropped out of usage as the general term.
I don't think this is even right. For example, many Australian aborigines or natives of the Caribbean are "black" but are only from Africa in the sense that all humans are including Europeans. Likewise, a recent immigrant from Zimbabwe will have a very different "culture and history" than a fifth generation resident of Brooklyn, even if they have similar genetics and skin color. For that matter, at this point a resident of New York and a resident of Mississippi will have about as much in common as someone from France and someone from Poland, regardless of the color of their skin.
It also seems like quite a presumption to even suggest the contrary. Are we really safe to claim that people from Ghana and people from Ethiopia have a uniform culture just because they're both on the same continent and we aren't that familiar with either of them?
> Also "White" is the only ethnic group name that doesn't refer to a place, even though it's clearly a stand-in for "European"
How is this standing in any different than "Latino" implying Central and South America or "Black" implying Africa?
It seems like the best solution is to just not capitalize any of them. Or, for that matter, to stop trying to categorize people in this way, since the entire premise was established by foolish racists and doesn't deserve the dignity of continued deference.
Botham Jean was a first-generation immigrant from the Caribbean nation of St. Lucia but that did not prevent him from being a victim of police violence. https://en.wikipedia.org/wiki/Murder_of_Botham_Jean?wprov=sf...
I doubt this will pass the test of time, makes it seem like a noun ('a White'; it must be a noun to be a proper noun after all) rather than an adjective ('a black person') which (capitalisation aside) is way out of favour. (At least it is/would be in the UK, where 'PoC' isn't really used either, so ymmv.)
E.G. White Privilege helps to denote that this is a title for something, and might link to an outside definition, footnote that describes the term (in case someone somehow doesn't know it yet) etc.
Tired of questions asking "what I am", both from people and on forms. I'm American, not Asian, not Latinx. I have so far traced 3 great-grandparents lines back to England and 1 from an eastern European country that no longer exist (so how am I suppose to classify myself with that?). 2 left for Virginia in the 1600's the other 2 left for the US in the early 1800's. I'm an 11th generation American, yet I don't have that option on forms and people still ask me where I am from - no, I mean before that, what country are your(my) parents from? confusion
Also, I don't speak Spanish, so am not Hispanic (why is this even grouped with things like Asian, Black, White? and why are Asian's Asian but the other two get colors?)
In this context, they're both proper nouns and this is the correct stylization, what's interesting about it?
> I haven’t seen this style choice before.
Do people imagine that they're going to have an impact on any social outcome by merely changing capitalization of certain words? It's incomprehensible that this would be a "style choice" and not simply "moral navel gazing."
By the way, this whole thing is like the "He" in the bible:
Really I think it becomes clear when you know that Custer capitalized mule but not Indian.
As for your specific hypothetical, it still seems to be contrary to the stated goals. My guess is you'd want to cast your net wide to get a cross-section of qualified candidates and maybe not just hire from the same sources that produce homogenous candidates
I mean, horribly incompetent.
Like, what'd you do? Post your job ad in the mens room of a cracker barrel in rural Arkansas? How'd you manage it?!
Yet the pool of US-based applicants was anything but diverse. Very few women and almost zero URM (Under-represented minorities). Also the candidate diversity was worse for more senior levels.
Also it is very important to respect privacy. Many people have a family, that does not know about their secret gender identity or secret sexual orientation!
Unless things have drastically changed recently, I have no idea how normal companies can find black programmers. As I understand it, the FAANGs are able to hoover up a lot of the diversity to meet their DEI goals, because they can outbid everyone else.
Because? All workplaces should be based on merit. The whole reason why companies are doing this clown show is because of woke laws that don't take reality into account. Like the reality that maybe there just isn't enough women or minorities that are qualified.
Because? There are many different kinds of organizations that do work, including families where merit isn't as important. The whole reason why laws were written to enforce diversity is because narrow-minded, little white men weren't willing to accept reality. The reality being that in an equal opportunity society they can't bin the CVs because they don't like the color of their skin or their expressed gender.
Can you point me to the 'woke laws' ?
If a lie is whispered in the forest and no one is around to hear it, is it securities fraud?
> The fraud on the market theory is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business. Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatements. The causal connection between the defendants’ fraud and the plaintiffs’ purchase of stock in such a case is no less significant than in a case of direct reliance on misrepresentations.
Say you buy the stock even though you didn't read the DEI statement, but other people bought the stock before you having read it. Their purchases drove up the stock price, so you had to pay more for the stock. You got defrauded of the delta. Especially if now it comes out, the price goes down, and you make losses.
How would someone prove that they were mislead by this?
Me: I read their diversity statement and was mislead by it.
Them: Nuh-uh, you didn't!
we need to start prosecuting companies that do this shit, not just for financial fields.
Guarantee the ghost job nonsense will instantly stop once the first person is shown being shipped off to prison for a year and one day.
E.g. I had a CodeSignal assessment recently that resulted in the end of my "consideration". If it had been a genuine opening, they'd be able to tell me what the expected score was and how tenured peers at the company are scoring in recent assessments.
But I'm hearing more and more from friends on the tech interview circuit about processes requiring, in essence, free consulting to be done for a posting that remains listed and unfilled almost indefinitely after the interview (and subsequent ghosting). My hunch is these start-ups don't want to show an empty hiring pipeline to investors. But if that's being pursued wilfully, it seems to imply fraud.
Sounds very plausible, but why bother interviewing anyone?
I got lots of bites on my resume! And I was called in for lots of interviews. But they didn't really go anywhere, despite me often feeling like I did well in them. It took me a few months to realize that they were actually just hearing some murmurs about what my company was doing and wanted to learn more about it- we were approaching the problem in a unique way for the time.
Even seemingly innocuous details can give away a lot about a company's strategy. If you are working on say AR at Amazon, and you mention that your group is about 200 people, that says that they are not only going into this space, but doing a reasonably big push on it as well, which might be news to say FB. (This is completely contrived, I have no idea if Amazon is doing AR stuff at all).
Candidates will willingly disclose quite a bit, especially if they were stiffed by the last lot.
I imagine the company internally can say something like "we'll hire if we find someone capable of solving all of department X,Y and Z's problems simultaneously and will do so for market rate. We probably won't find that but looking will make people happy." with the second part said with only winks.
Sure, if you're the investor that asks all those questions and has enough information to answer them, you won't be happy. But I think most investors aren't going to drill down to that level. Especially, anyone investing is going to know some money wasting has to happen, some posturing has to happen, just to be trendy and so attract "brilliant/energetic/etc" people as well as more investors. And a given start-up investor has to want more investors since the company runs on an accelerating flow of funds; your money is only being multiplied if other people are tossing in theirs and if your money isn't being multiplied, it's vanishing.
Because then you don’t have to ask anyone else to lie for you, or count on them to do it well.
There are other options here though, beyond just lying and pickiness, which include:
a) some internal party sabotaging hiring to prevent someone getting in who will be a better fit for the role they want during growth
b) startups often don’t actually know where they need to put bodies, especially in areas outside of the founders’ technical training
This wouldn't make any sense. If a startup has headcount and budget, they're going to want to hire someone as quickly as possible.
Investors don't care about the minutia of how many people are in your hiring pipeline. If portfolio company had board-approved budget and headcount and was failing to fill those roles in a timely manner, that would be a huge red flag that something is not right within the company.
Investors care about result and efficiency. I don't think any startup is going to impress investors by wasting a bunch of time deliberately fake interviewing people and then failing to hire anyone.
What's more like is the company wants to hire, has told the teams they can hire, but the board is reluctant to approve more headcount until the team starts showing results. Another possibility is that they're waiting for financials to improve enough to justify the hire.
I think one regulation to resolve this is to outline a term on when you expect to fill the role, in order to delineate between "we need this role right now" (AKA, "urgent hire"), "we want to fill it in 1-3 months", and "nice to have but no rush" postings. It'd give a better signals to workers and make it easier to call fraud if they are "urgently hiring" but repost the same thing 5 months in a row.
Sure. That's why they get audited for their recruitment like anything else in business. I'm not saying to bring the hammer down, just to have a better excuse than "well we're always hiring!"
It feels like we'd be suing ourselves. Wells Fargo defrauded us and if we win, we'll get money back from an entity we own
The might be a little bit of a shuffle with money going from people who bought one year to those who bought another, but for buy and hold, that's pretty moot. It seems like the lawyers are making money at my own expense?
What an I missing?
If you want to send a message to companies that they better not fuck about with this DEI stuff for example, this might send that message.
Thing is… I'd never even applied with them, and certainly hadn't done any interviews.