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It’s a solvency problem, not a liquidity problem

,----[ Quote ]
| The big question I’m asking is which sidelines don’t have landmines? My team
| and I are fortunate to have stepped out of many markets before the current
| flood of fear. We stepped right into a few problems, but in large part dodged
| the cannonballs. So far so good. But what does it mean to have cash in the
| bank, when banks themselves are failing? What does it mean to hold dollars,
| when the dollar is being debased in a way that would feel familiar to the
| Reserve Bank of Zimbabwe? These are very dangerous times, and nobody should
| think otherwise.


“Analysts sell out - that’s their business model… But they are very concerned
that they never look like they are selling out, so that makes them very
prickly to work with.”

–Microsoft, internal document



Microsoft, Cisco to lose $4.3 Billion as investment banks cut cost

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| The cut in the IT budgets of the revered investment banks like Lehman
| Brothers and Merrill Lynch due to their failure may lead industry giants like
| U.S. based Microsoft and California based Cisco to lose $4.3 billion in
| orders next year. While Cisco earns about three percent to four percent of
| annual revenue from the U.S. financial industry, Microsoft accounted for 22
| percent last year.


Microsoft will be hurt by financial crisis, RBC analyst says

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| The devastating U.S. financial crisis will hurt software giant Microsoft
| Corp.'s bottom line this holiday season as shoppers tighten their purse
| strings, RBC Capital Markets says.


Ballmer says Microsoft not immune from global crisis


Microsoft loses 90 Billion Dollars


Microsoft's Market Cap Falls $24B in 17 Days

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| Microsoft is on the list. Today, the stock closed at $25.01 a share, down
| $2.39, or 8.72 percent.


Ex-Microsoft boss sentenced


Former Microsoft Manager Gets 2 Years In Jail


SEC Foresees Rise in Fraud Cases

,----[ Quote ]
| Laying out his priorities, the new enforcement chief for the Securities and
| Exchange Commission in San Francisco said Thursday he expects an upswing in
| fraud cases against public companies.



Microsoft's Accounting Under Scrutiny

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| The company has still not made enough information public to provide analysts
| with detailed information on the profitability of its MSN Internet business,
| Mr. Galvin said, adding, ''There's still room for them to obfuscate.''


Microsoft - Undeserving of Libertarian Praise

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| One strategy that Microsoft has employed in the past is paying for the
| silence of people and companies. Charles Pancerzewski, formerly Microsoft's
| chief auditor, became aware of Microsoft's practice of carrying earnings from
| one accounting period into another, known as "managing earnings". This
| practice smoothes reported revenue streams, increases share value, and
| misleads employees and shareholders. In addition to being unethical, it's
| also illegal under U.S. Securities Law and violates Generally Accepted
| Accounting Practices (Fink). Mr. Pancerzewski claims he was forced to retire,
| for raising the issue of deferred earnings with Microsoft executives, thereby
| making plausible deniability more difficult for said executives. He has since
| sued Microsoft, who responded by settling out of court, but also sealing the
| records to prevent public disclosure (Fink).


Microsoft Agrees To Refrain From Accounting Violations in SEC Settlement

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| Microsoft has agreed to refrain from accounting violations to settle federal
| regulators' allegations that it misrepresented its financial performance, the
| government announced Monday.
| Under a settlement with the Securities and Exchange Commission, the software
| giant neither admitted to nor denied wrongdoing. No fine was imposed.
| The SEC alleged that Microsoft's accounting practices from July 1994 through
| June 1998 caused its income to be substantially misstated.


"Microsoft Tax," MSN Enters the Black Hole, New Names for NT

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| The lawsuit, filed last year by Mukilteo City Councilman Charles
| Pancerzewski, alleges that he was forced to resign as Microsoft's general
| auditor in January 1996 after working for the company's internal auditing
| department for more than four years. The suit claims that a "significantly
| younger man" with little auditing experience was picked to replace
| Pancerzewski, who was finally forced out because he discovered Microsoft
| might have been violating government regulations. Once Pancerzewski left the
| company he was replaced by the younger man, who his attorneys believe
| was "less prone to raise issues of possible legal improprieties which could
| threaten or embarrass Microsoft or its management.


SEC Investigating Microsoft Practices -- Earnings Manipulated, Former Employee

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| "The CFO to whom Charlie was reporting his concerns about illegality was the
| biggest advocate for the very illegality that was going on," Vial argued in
| court a year ago.



,----[ Quote ]
| THE ALLEGATIONS WERE shocking: For years, Microsoft has systematically
| distorted its profit figures in an effort to consistently beat Wall Street
| expectations and keep its stock price steadily rising. The false reports
| would violate SEC regulations, and amount to outright fraud.
| More shocking was the source of the allegations: Microsoft's chief of
| internal audits, Charlie Pancerzewski, who reported directly to the company's
| chief financial officer.
| Most shocking of all was what happened to Pancerzewski when he reported the
| suspicious bookkeeping to his supervisors, Microsoft CFO Mike Brown and chief
| operating officer Bob Herbold, in the spring of 1995. Soon afterward,
| Pancerzewski—who for nearly five years had received stellar performance
| evaluations—received his first-ever unsatisfactory one, and was eventually
| forced to resign.
| Two months ago, Microsoft quietly settled a lawsuit containing these
| allegations, filed in 1997 by Pancerzewski under the Whistleblowers
| Protection Act. The auditor claimed he was wrongfully terminated after
| telling his supervisors that Microsoft might be breaking securities and tax
| laws. The lawsuit made its tortuous way through several rounds of pretrial
| motions until last fall, when US District Judge Carolyn Dimmick denied
| Microsoft's final plea for summary judgment, finding credible evidence that
| Microsoft may have violated SEC rules, as Pancerzewski alleged. Shortly
| thereafter, Microsoft and Pancerzewski settled out of court. Terms of the
| agreement were sealed, but one source who claims familiarity with the case
| says that Microsoft paid Pancerzewski $4 million.


Microsoft exec dumped stock prior to Red Ring announcement

,----[ Quote ]
| To make matters more murky, the sales were not registered with the Securities
| and Exchange Commission within the mandatory two days of the transaction, a
| result of an alleged "administrative error." Microsoft has since remedied the
| issue by following the "procedures required of late-filers."


Microsoft's Bach sold more stock before Xbox news

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| Microsoft Corp. executive Robbie Bach sold $3 million more in company stock
| during the period leading up to an announcement about a costly flaw in its
| Xbox video game console than previously reported, according to a filing
| Monday with the Securities and Exchange Commission.


Insider Trading Hasn't Affect Microsoft Stock - Yet

,----[ Quote ]
| MarketWatch.com reports that Robbie Bach, president of Microsoft's
| Entertainment and Devices division, sold $6.2 million of Microsoft
| stock just prior to announcing that Microsoft was going to have to
| extend XBox 360 warranties to three years because of extensive
| failures. The filings note that this was not part of any
| scheduled diversification or selling program; this was a
| conscious, unscheduled sale by the guy in charge of releasing
| news that could affect the value of Microsoft stock.
| [...]
| Insider trading is a very serious violation of the law; just
| ask Martha Stewart, who served five months in prison for
| avoiding losses of $43,000 through trades that just had suspicious
| timing (no insider trading was actually proven). This is $6.3
| million that went straight into Robbie Bach's pocket.

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