Predators and Profits by P-PearsonEducation


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									Predators and Profits
Author: Martin Howell
Table of Contents

Table of Contents




1. Sages and Charlatans: Avoiding the Fads, the Buzz, the Rip-Offs, and the Merely Dumb.

2. Pipedreams and Big Lies.

3. The Superstar CEO: Celebrities, Showmen, and Destroyers.

4. Jets, Parachutes, and Stealth Wealth: Pay for Performance or Pay for Plundering.

5. Caffeine Badly Needed: Sleepy, Inept, and Tainted Boards.

6. Growing Mushrooms: The Art of the Opaque, Sneaky, and Buried.

7. Culture of Greed: Sports Stadiums, Shooting the Messenger, and Rank and Yank

8. Earnings Tricks and Games: Manipulating the Numbers and "Creative" Fraud.

9. Goosing, Stuffing, and Faking: Tricks of the Trade to Drive Revenue Up and Costs Down.

10. Beyond Their Means: Balance Sheet Clues That May Stop You from Losing Your Shirt.

11. Snakes and Ladders: Spinning, Flipping, and Walking through Wall Street's Walls.

12. At the Scene of the Crime: Funds Became Part of the Happy Conspiracy.

13. Where Were the Auditors? Counting Fictitious Beans.

14. Media Munchkins and Masters: Separating Puff Piece Writers from Hard Diggers.

15. Abstention to Follow Addiction: When Disenchantment with Low Returns Hits Home.

Appendix A. Tips for Handling Your Broker, Financial Adviser, or Financial Planner.

Appendix B. A Glossary for Investor Survival.

Predators and Profits helps you uncover the kind of scandals that brought down Enron and Worldcom.
Are problem stocks still lurking in your portfolio? Learn how to identify them, while there’s still time.
Leading Reuters business journalist Martin Howell identifies more than 100 crucial red flags: hidden risks
from greedy executives, sleepy boards, accounting shenanigans, and questionable corporate culture. It’s
all public information: Martin Howell shows how to find it, assess it, and act on it.

“Two gladiators are standing next to the door.… We have a lion or horse with a chariot for the shock
value…. Big ice sculpture of David, lots of shellfish and caviar at his feet. A waiter is pouring Stoli vodka
into his back so it comes out his penis into a crystal glass…. Everyone is nicely buzzed, LDK gets up
and has a toast for K…. A huge cake is brought out with the waiters in togas singing…. HBK (Happy
Birthday Karen) is displayed on a mountain, fireworks coming from both ends of the golf course in sync
with music….” from an outline by event planners for the 40th birthday party of Karen Kozlowski, second
wife of Tyco International’s then CEO Dennis Kozlowski (LDK in the above), in June 2001 in
SardiniaWhen Tyco’s then Chief Executive Officer Dennis Kozlowski held this $2.1 million soiree for his
wife and a few dozen friends, it typified an era of corporate greed that had turned many executives into
modern-day emperors. The Internet bust had only been the trailer for the main movie featuring business
leaders who allegedly used large companies as their personal piggy banks to be looted at will. Many
investors were ruined by a combination of hype, deception, and ignorance—their lives destroyed when
they lost pension funds and other investments. This book will show you more than 170 ways to avoid the
CEOs who cheat and deceive, the Wall Street bankers who promote investments they know are bad, the
boards who have been bought off, the see-no-evil accountants, and those members of the media who
seem to be in on everything but may know nothing.If the corporate scandals of 2001―2002 needed a 
poster boy, then Kozlowski fit the bill. He had everything. His company had grown phenomenally, mainly
through acquisitions. Big investors, Wall Street bankers, and award-winning analysts were fawning all
over him. He had earned the nickname Deal-a-Day-Dennis, and at the time of the party he had just
completed perhaps his most audacious takeover, the $9.5 billion acquisition of finance company CIT
Group, a deal that promised to turn Tyco into a true conglomerate along the lines of General Electric Co.
(GE). BusinessWeek named Tyco as the best performing company in the spring of 2001, and a Reuters
survey of analysts at brokerages conducted by Tempest Consultants put the company first in 7 out of 15
categories, including transparency and quality of financial reporting and disclosure. And, if that wasn’t
enough, his philanthropic work was earning him widespread recognition, including awards and honorary
degrees. Life was sweet for the son of a second-generation Polish-American from New Jersey. If anyone
might have felt entitled to host a lavish party in the summer of 2001, it was Dennis Kozlowski. But it was
the shareholders of his company, which makes everything from coat hangers to fire alarms to undersea
cables, who were paying. Kozlowski had been systematically looting the company’s coffers, in addition
to pocketing hundreds of millions of dollars of compensation, while he was CEO, according to
indictments and lawsuits in September 2002 by the Manhattan district attorney’s office, the Securities
and Exchange Commission (SEC), and Tyco itself. He allegedly used the company as his personal cash
dispenser and got it to pay for everything from a $6,000 shower curtain to a $2,200 wastebasket as part
of a $14 million furnishings and improvements bill for his $16.8 million New York apartment, which was
also paid for by the company, regulators said. There were also yachts, fine art, jewelery, and vacation...
Author Bio
Martin Howell
MARTIN HOWELL is editor-in-charge of Reuters equities coverage in North and South America. He has
directed much of Reuters corporate news coverage in the United States in the past four years, including
coverage of the Enron scandal, the Internet bubble, and Wall Street deception. For the past 18 years, he
has written, reported, and edited business news throughout the United States, Europe, Asia, and
Australasia, and managed news teams on all these continents.
andal, the Internet bubble, and Wall Street deception. For the past 18 years, he
has written, reported, and edited business news throughout the United States, Europe, Asia, and
Australasia, and managed news teams on all these continents.

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