Nine executives at Inventec Appliances could face jail time for failing to reveal plans by Apple to reduce iPod orders to the company in a timely manner.
The executives have been indicted by Taiwanese prosecutors over allegations of insider stock trading, the company said Thursday.
Taiwan's Banciao District Prosecutors Office alleged the nine executives and one lower level employee failed to publicly reveal a steep drop in iPod orders until after they had sold off nearly NT$740 million (US$22.4 million) worth of stock on the Taiwan Stock Exchange.
The executives knew as early as Jan. 19, 2006 that the company would have to reduce iPod output by 49 percent in February as orders moved to China, prosecutors said in a statement.
Prosecutors also allege the company planned to lay off workers at a factory devoted to iPod production long before it revealed the troubles to investors in mid-March.
"[The information] had a huge impact on the company's stock price," prosecutors said in a statement.
The company's stock hit a 2006 peak of NT$183.08 per share on Feb. 3, and stood at NT$160 on March 8 of the same year. But it started to tumble the next day, hitting NT$106.54 a few weeks later on March 24.
Prosecutors are seeking the stiffest penalties against the two top executives, Chairman Jackson Chang and President Daniel Lee. Chang faces six-and-a-half years in prison and a fine of NT$30 million, while prosecutors are seeking a seven-and-a-half year term for Lee and a fine of NT$60 million.
The company's monthly revenue statements show the damage caused by Apple's order reduction. Inventec Appliances reported revenue of NT$12.3 billion for the month of January, 2006, but February revenue dropped to NT$6.95 billion, and failed to rebound.
The company has struggled to recover from the blow. It reported revenue of NT$4.91 billion for July, 2007.
The stock market trouble for Inventec Appliances occurred just months after its debut on the main board. Hype around the iPod had helped the company post a record for the biggest one-day gain in an initial public stock offering in Taiwan history just months before, on Oct. 25, 2005.
This whitepaper explains the terminology and concepts behind Data Replication technologies and establishes some sizing rules through worked examples. Learn the new paradigm in disaster tolerance—protect data anywhere.
Download now »
Server virtualization is a popular option for dealing with mounting datacenter costs. Another equally promising approach is the use of an Application Delivery Controller. Citrix NetScaler provides a low-cost way for organizations to reduce their server count and accrue cost savings from a reduction in space, cooling, power and personnel.
Download now »
The emergence of WLANs has created a new breed of security threats to enterprise networks.
Included in HP ProCurve WLAN solutions is security technology that alleviates threats from WLANs through:
* Monitoring wireless activity inside and out of the enterprise
* Classifying WLAN transmissions into harmful and harmless
* Preventing transmissions that pose a security threat to the enterprise network
* Locating participating devices for physical remediation
Effectively address data protection challenges, implementing solutions that help store and protect business–critical data while cutting costs and improving efficiency and reliability.
Download now »
Sign up to receive Security Resource Alerts
This white paper provides guidance on how to develop a strategic approach to managing and monitoring logs, a key function required for compliance with many regulatory mandates and a critical defense against security threats.
Download now! »
Learn about the processes and technologies that support security information management (SIM) operations, as well as the business case for SIM. The series examines different options for implementing SIM and gives you evaluation criteria for selecting the best option for your organization.
Download now! »
Learn the strategies, actions, and capabilities that Best-in-Class organizations employ and technologies they choose to obtain superior performance against various security performance metrics. This report provides guidelines for identifying which security solutions to consume as a MSS and defines best practices for choosing and managing MSSPs.
Download now! »
Recommend This
