Ben Carson's fraudulent activity while on Costco board

[Tanuki]

http://gawker.com/complaint-ben-carson-saved-real-money-at-costco-approv-1736072053


...."while serving on Costco’s board from 2002 to 2005, Ben Carson was accused of granting over 1.01 million shares worth of illegally backdated stock options...

.....All told, the beneficiaries of this scheme allegedly wrested over $173 million away from the company in pumped-up stock sales and unrecorded compensation during the 10-year-period covered by the two civil suits.

.......Carson himself allegedly personally benefited from the falsified options. According to the complaint, the concealment of the backdating scheme led to the misrepresentation of Costco’s actual net income, its shareholders’ equity, and the full tax obligations involved—and all this had the ancillary benefit of artificially inflating Costco’s stock price. In April 2006, Carson sold roughly 12,000 shares of the company at this elevated price, netting $655,460 in what was alleged in the operative complaint to be, effectively, insider trading (just one of the many charges leveled against him by the plaintiffs).
.....

As one of four members of Costco’s compensation committee, as well as through his work done on behalf of its audit committee, and his general directorial duties, Ben Carson’s signature is all over years’ worth of documents authorizing the questionably dated stock options; written communications with Costco’s external auditors; and official reports misrepresenting those stock options, along with the rest of Costco’s financials, to both shareholders and the SEC.


Carson received a nominal $45,500 annually for his mental and physical exertions as one of Costco’s board members, according to financial disclosures recently filed with the FEC, in addition to another $50,000-$100,000 in annual dividends as a shareholder. It was a real job, in other words, with real pay and real obligations. You don’t have to be a brain surgeon to figure out that Ben Carson bears some culpability here, in one of the few large managerial roles he has held that’s even remotely comparable to holding national office.
.......


Based on this voluminous paper trail, the complaint accuses Carson of a litany of wrongdoing, beyond insider trading, that included unjust enrichment, corporate waste, constructive fraud, gross mismanagement, violations of the Exchange Act, breach of his fiduciary duty, and others.

......

[Demeter]

1. So, what happened? This is the first I've heard of it

and I've been devouring economic/business articles for DU for a decade.

[SunSeeker]

3. See post #2. nt

[SunSeeker]

2. Unfortunately, it looks like Carson paid no price, since Costco paid the settlement.

The settlement mandated, for example, in-person votes on key decisions over the less reliable “unanimous written consent” procedures that the company had previously used. It also required Costco and its executives to pay $4.85 million to the plaintiffs in legal fees and expenses.

http://gawker.com/complaint-ben-carson-saved-real-money-at-costco-approv-1736072053?trending_test_d&utm_expid=66866090-62.H_y_0o51QhmMY_tue7bevQ.4

[central scrutinizer]

4. Pretty pedestrian Republican resume if you ask me

"included unjust enrichment, corporate waste, constructive fraud, gross mismanagement, violations of the Exchange Act, breach of his fiduciary duty, and others. "

[Downwinder]

5. Read and heed the comment on gawker

[Erich Bloodaxe BSN]

6. Kind of surprised a company like Costco would even have him on the board.

Carson received a nominal $45,500 annually for his mental and physical exertions as one of Costco’s board members

Geeze, 'nominal'? I imagine a whole heck of a lot of folks wish they could get 'nominal' pay for doing paperwork.

[Tanuki]

7. I wondered about that too, but then I thought maybe in 2002

when he joined the board, his politics were not well known.

[DavidDvorkin]

8. "Carson received a nominal $45,500 annually"

Nominal! Damn.

Nominal for someone with his income. Most people would love to get that, and they'd take the work seriously and would be honest.