• Apple Caught in Middle of $1 Million SEC Scandal




    Reuters acquired, through a Freedom of Information Act request, an SEC report detailing the shady sale of $1 million in virtual data storage to the SEC by an Apple salesman.

    According to the SEC investigation, an Apple salesman swindled the SEC into purchasing data storage and backup services from a storage firm called Cloverleaf Communications. The salesman convinced the SEC in 2008 Cloverleaf could provide a more affordable solution to their data storage needs, and the SEC essentially awarded Cloverleaf a no-bid contract.

    SEC Inspector General David Kotz, who filed the report in December of 2010 and acts as the agencies internal police, found the contract violated several federal procedures. No-bid contracts violate federal contracting procedure, and upon looking at alternative solution Kotz found Cloverleaf to be "more expensive than other, better-known and less risky alternatives."

    Even worse, when the SEC actually tried to use the purchased equipment and software it proved to essentially be useless. "Bugs" during the installation were never fixed and ultimately staff who brought attention to the problems were told by a supervisor "this information doesn't leave this room."

    Obviously the actions of single Apple salesman don't speak for the entire company, this doesn't help the already spotty track record Apple has with the SEC (insider trading investigation, backdated stock options).

    Source: Reuters
  • Connect With Us

  • Twitter Box

  • Facebook