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Tag: investigations

  • Autonomy’s Former Execs “Welcome” FRC Investigation

    Back in November 2012, HP announced its dismal quarterly results and blamed around $5 billion of its $8.8 billion impairment charge on “serious accounting improprieties, misrepresentations, and disclosure failures” at Autonomy prior to its purchase by HP in 2011. Autonomy founder Mike Lynch shot back at HP immediately, starting a website and issuing an open letter accusing HP of mismanagement.

    Though HP did not address the criticism directly, it did cheekily reply that it “look[s] forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury.” Since that time HP’s comment on the matter has been that the case is in the hands of authorities such as the U.K. Serious Fraud Office and the U.S. Securities and Exchange Commission.

    This week it was revealed that the U.K.’s Financial Reporting Council (FRC) is investigating Autonomy’s books from 2009 to 2011. The FRC investigation will take place in consultation with the Institute of Chartered Accountants in England and Wales (ICAEW).

    Through the website created by Lynch, former Autonomy execs boldly proclaimed that they “welcome” the FRC investigation. The statement, in full:

    We note the announcement by the UK’s Financial Reporting Council (FRC) that it has begun an investigation of the financial reporting of Autonomy for the period from 1 January 2009 to 30 June 2011. As a member of the FTSE 100 the accounts of Autonomy have previously been reviewed by the FRC, including during the period in question, and no actions or changes were recommended or required.

    We welcome this investigation. Autonomy received unqualified audit reports throughout its life as a public company. This includes the period in question, during which Autonomy was audited by Deloitte. We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC.

    Depending on what the FRC uncovers, either Lynch or HP will have some serious explaining to do. Besides embarrassment and possible criminal implications, the investigation could end up playing a large role in the lawsuits HP’s allegations have spawned.

  • LinkedIn Password Leak May Trigger Irish Investigation

    LinkedIn has already confirmed that more than 6.4 million of their members’ passwords were leaked to a hash-cracking forum earlier this week. And though the company has also taken reasonable steps to resolve the issue with its members, questions still remain about why the hash containing the passwords was unencrypted, and how the hacker got access to the passwords in the first place. Those questions may soon get answers if an Irish investigation into the leak goes forward.

    Reuters is reporting that the office of the Data Protection Commissioner in Ireland is in contact with LinkedIn over the matter, and may begin an investigation. The office feels the situation is within their jurisdiction, which includes data theft. Reuters is quoting both the deputy data-protection commissioner and a spokesperson for LinkedIn’s London office as having confirmed that LinkedIn is keeping the Data Protection Commissioners Office “abreast of the situation.”

    According to its website, the office of the Data Protection Commissioner was established under Ireland’s 1988 Data Protection act. The office upholds the principle that organizations that keep user data have a responsibility to keep the data private, safe, and secure. The Data Protection Amendment Act passed in 2003 updated Ireland’s data principles to include a European Union directive that declares individuals should “be in a position” to control their data. The Data Protection Commissioner upholds these rights and can enforce them by fining data holders who are malicious or irresponsible.

  • Groupon’s Advertising Practices Under Scrutiny In The UK

    Top daily deals service Groupon is no stranger to controversy – whether it be related to their early November IPO, or charges from small businesses about the efficacy of the service. But now Groupon faces problems across the pond as the Office of Fair Trading, the UK’s consumer and competition agency, is set to launch an investigation into the company’s advertising practices.

    The referral to the OFT comes from another regulator, the Advertising Standards Authority (ASA), who decided to report to the OFT based on 48 advertising code violation perpetrated by Groupon in 2011.

    Here’s what the ASA had to say in a statement on their site:


    Following repeated breaches of the Advertising Code by MyCityDeal Ltd t/a Groupon, the Advertising Standards Authority is now referring complaints that we receive about Groupon’s ads to the Office of Fair Trading (OFT). We are referring complaints that specifically concern Groupon’s:

    • Failure to conduct promotions fairly, such as not making clear significant terms and conditions
    • Failure to provide evidence that offers are available
    • Exaggeration of savings claims

    We are taking this approach because, given Groupon’s track record, we have serious concerns about its ability to adhere to the Advertising Code. It is in the public interest that we refer the matter to the OFT, the OFT being better placed to address any underlying issues concerning Groupon’s trading practices generally.

    In 2011, the ASA has formally investigated and upheld complaints against Groupon’s advertising on 11 occasions. We have also informally resolved 37 cases. We will continue working closely with the OFT on these issues to ensure consumers are protected.

    The OFT already has an ongoing investigation of Groupon – one which they started in July. The original investigation concerned trading practices, but they have added the ASA’s complaints about advertising practices to the list.

    Last week, the ASA banned a Groupon deal offering a discount on cosmetic surgeries like breast enlargements and rhinoplasties in their customary 24-hour window. They said that the deal was nixed because it forced people to make huge life-altering decisions in a hurried amount of time.

    Groupon has responded to the investigation, saying:

    Groupon constantly strives for business practices that are in the best interest of consumers. We are constantly evolving business process to ensure customers receive the best possible experience at the highest standards. We are cooperating fully with the OFT to ensure that the rights of consumers are protected.

    Groupon burst into the UK when they acquired CityDeal, a European deals service headquartered in Berlin, in May of 2010.