by altmind on 12/17/21, 4:33 PM with 236 comments
by PragmaticPulp on 12/17/21, 4:49 PM
I can't tell how much of it is random people projecting their cynicism onto the business world, or if it's people who have been part of bribery/kickback schemes themselves trying to normalize the behavior online.
Either way, cases like this should make it clear that the behavior is not a good idea.
by duffpkg on 12/17/21, 5:27 PM
https://www.justice.gov/opa/pr/electronic-health-records-ven...
by jbkiv on 12/17/21, 5:43 PM
Understand that ANY product has a "side" price tag, paid by granting options or "payment for expenses" to the senior individual. Another way to look at that. Ask ANY member of your board of advisors to disclose ANY conflict of interest.
If StartUp sells product/services/SaaS to BigCo. then BigCo. "advisor" should disclose ANY payment, direct or indirect, travel or non-travel, and ANY stock options.
This is what had to be done with the large drug companies, forcing them to disclose payments to providers/medical doctors who had the authority to buy drugs. Full disclosure + penalties for lack of disclosure ---> that was the end for the drug sales rep who were doling "educational conference tickets, all expenses paid for you and your spouse, ALL expenses paid, and of course compensation for your time". Of course said conference had to happen in Tahiti, San Francisco, Seychelles, etc...
by skuhn on 12/17/21, 9:31 PM
What Mike did was indeed unethical and fraudulent. It's also extremely foolish and shows poor judgment on his part -- his role at Netflix was to lead the organization to identify and implement the best solutions for the company and its customers. Instead he saw the opportunity for short-term personal gain at the company's expense, and by doing so he jeopardized his lifetime earnings potential that would have been many times greater. I hope this sends a message to anyone else in his position that there can be consequences.
I've been responsible for tens to hundreds of millions in annual expenditure, and to even have the appearance of vendor favoritism (let alone kickbacks, bribes, payoffs) is anathema to me. I have vendors that I like to work with because they do good work and they help me to make things happen, but even my favorite vendor is evaluated and earns the business on the merits every single time.
I have declined seemingly innocent gifts from vendors (and notified my management). I always turn down things like sports tickets and paid trips. I do let vendors pay for the occasional lunch, but only up to a point that I feel comfortable. Maintaining my independence is absolutely key to my role and my career.
I've also worked at places where even a paid for lunch is not acceptable. That won't influence my decision-making one iota, but if those are the rules then I follow them.
Not everyone does that, but I don't know anyone in the industry who thinks Mike's behavior is OK. Anyone working for me who made unjustifiable decisions with vendor agreements would make me re-evaluate their position -- and if I found a pattern along the lines of Mike's behavior, they would be dismissed and sued just like him.
by parhamn on 12/17/21, 4:50 PM
- VistaraIT, LLC
- Platfora, Inc.
- Sumo Logic, Inc
- ElasticBox, Inc
- Numerify, Inc.
- Docurated, Inc
- Maginatics, Inc.
Is what they did illegal too? Presumably with zero chance of being charged. I haven't fully groked the limits of 'fraud' and 'money laundering' here in the US. These typically feel like they should be civil breach of fiduciary duty type cases.
by blamethenetwork on 12/17/21, 8:16 PM
I've also been in the industry long enough to get my own sense of what is / what is not reasonable.
The first thing, Netflix wise, is to understand their culture deck at the time. One of the main things was "Act in Netflix's best interest". That basically described their philosophy of how employees should act.
So, when signing a contract, where you get a 10% kickback, (eg the company pays $200/hour and you get $20 as a commission, its better to have the company pay $180.)
Also, signing contracts that he was enriched by - stock, kickbacks etc. (he received what is now worth: $862,500 of sumologic, and $2,167,700 of netskope - trial document #276
He also signed contracts that were never deployed, had a long support lifetime, or didnt meet the companies needs - eg: Numerify, and docurated - trial document # 288
In some cases, I personally experienced us having to use tools that Mike had signed for that were not right for the job. Eg: Sumologic at the time was a horrendous product. It certainly was not a realtime logging system. Realtime was up to 15 minutes delayed. If you wanted realtime, it was all about syslog. I brought this up, and was told that we were using the product because of Mike, even though it clearly did not help our problems. Grep on the unix server was considerably faster and more up to date, (but it wouldnt have got Mike $2M of stock).
Mike also had me meet with him and various vendors who were pitching some fly-by-night ideas. In a normal world, I'd say they were very early startup ideas that weren't a match for our needs. Now, I'm wondering if these were meetings where Mike was looking to get an "advisory" angle.
In summary, I've been to coffee, dinners, very nice meals etc. with vendors. I've had them invite me places for meetings, and I've gone with my companies permission and understanding. I've had non-compensated advisory positions. The difference though, is my company was aware of it, and I did not receive stock or engineer contracts such that I received kickbacks. Thats where the line was, and thats why he's going to jail.
by throwawayFanta on 12/17/21, 5:32 PM
Maybe there are no wads of cash changing hands, but I've personally seen contracts being earned less due to the feature set, but more because the startup got introduced to some C level and them applying downward pressure to choose that startup during the vetting process.
It's kinda noticeable when you're on a call with a big company's tech team and they sound defeated when talking about the success criteria and stuff
by diab0lic on 12/17/21, 4:44 PM
by throwfaangus on 12/17/21, 4:45 PM
by hermannj314 on 12/17/21, 5:05 PM
Is it legal to take bribes if you do it in a way that doesn't create wire fraud? Was the crime taking kickbacks or was the crime being paid in a certain way (i.e. the LLC he created)?
by errcorrectcode on 12/17/21, 4:56 PM
by qwertyuiop_ on 12/17/21, 5:40 PM
I know anecdotally a lot of US based Indian Outsourcing companies, TCS, Infosys, Mahindra, HCL bribe the mid-senior IT executives by buying them offshore properties under LLCs. If you look at Avis, Disney and other corps, the top level IT execs are bribed to the gills by these companies.
by JohnJamesRambo on 12/17/21, 4:44 PM
by themdonuts on 12/17/21, 5:12 PM
by sudo-it-all on 12/17/21, 5:35 PM
by kbenson on 12/17/21, 4:46 PM
Is there a typo in there, is that just a weird legal term, or is it just me that has a hard time processing what that means?
by coldcode on 12/17/21, 5:35 PM
A week later he had another CIO job. I think he was fired from that one too.
No idea if he was ever put on trial, probably the case was too embarrassing to pursue.
by de6u99er on 12/17/21, 8:55 PM
It is important to me that I am able to make the best possible decision at any moment. I don't want someone else veing in a position where I can ve forced to do something I don't want to do.
by coding123 on 12/17/21, 5:07 PM
by abraae on 12/17/21, 5:05 PM
Do said competitors now have grounds for a lawsuit against Netflix itself?
by colpabar on 12/17/21, 6:15 PM
by barcoder on 12/17/21, 4:47 PM
by ChrisArchitect on 12/17/21, 8:22 PM
by pwarner on 12/17/21, 6:00 PM
by tonymet on 12/17/21, 5:29 PM
by riazrizvi on 12/17/21, 4:59 PM
by artursapek on 12/17/21, 5:59 PM
by wly_cdgr on 12/17/21, 5:37 PM
by BINGCHILLING on 12/17/21, 4:59 PM
i wonder how much the name choice had to do with the convinction
he could have definitely chosen something more tasteful lol
by dustymcp on 12/17/21, 5:58 PM
by choiway on 12/17/21, 5:01 PM
by encryptluks2 on 12/17/21, 5:08 PM
by camel_gopher on 12/17/21, 5:37 PM
by moneywoes on 12/17/21, 9:44 PM
by 0x0nyandesu on 12/17/21, 4:59 PM
I guess we'll just go back to big wads of cash in an envelope instead.
by clavicat on 12/17/21, 4:54 PM
by 0x0nyandesu on 12/17/21, 4:57 PM
by hpoe on 12/17/21, 4:47 PM
If you get caught stealing $700,000,000 the criminal justice system has a problem.
by scotty79 on 12/17/21, 5:37 PM
Shouldn't this be a civil case between Netflix and this guy? Why is criminal justice system even involved in this? It looks like very bad way to spend tax payers money.