Media Mafia: Cable Industry Corruption (Case File #8) – Back to Cablevision – Conspiracy, Stock Fraud & Statutory Rape as Competitive Strategies
By Alex Constantine
Continuing to lay out the world’s dirtiest laundry – you find it in the cable industry, not only stateside, but globally. In Peru, Australia, the UK, Pakistan … everywhere it’s the same repulsive picture: cable television is an instrument of criminal dictatorships. …
Initially, Murrin’s name was included with former Blackpool MP Lord Blaker and MEP, former South Ribble MP Sir Robert Atkins and Bill Harrison on the list of people being sued by McGrath.
“But”, said McGrath, “Michael Murrin agreed to come and talk to me about the dirty tricks campaign and show me his documents and tape recordings which reveal how a truly fiendish plot was mounted against me and my associates.
“The meeting went well and I have promised Michael that in view of the help he is giving me, I will be indemnifying him against any actions brought against him in the case.
“Although he was a persistent and dangerous political opponent I have discovered that I like him. It was just an accident that we ended on opposite sides of the political battle lines.”
For years Murrin campaigned to prove that McGrath, his leader Harold Parker, a former Mayor of Preston, and the Labour leader of Lancashire County Council, Mrs Louise Ellman were being influenced by friendship with the “socialist millionaire” Owen Oyston.
In 1987 McGrath had become a millionaire through his personal investment in Oyston’s Red Rose Radio. However, on August 7, 1991, a 20-man team of police detectives on “Operation Angel” conducted 19 raids on Preston Town Hall, the business offices and homes of Frank McGrath and Harold Parker and council officials.
Police revealed later that Murrin was one of the informants behind “Operation Angel”.
Twenty-one people, including Preston’s chief executive, deputy chief executive and deputy Labour leader were charged with various offences of corruption, conspiracy and theft.
But in the six years since the Angel raids, the only people convicted of any offences have been the owners of four small businesses and two minor council officials, all but one of whom had already been reported to police by the council before the police operations began. Lord Justice Nolan found that all the raids and searches on the council leaders were unlawful and all those charged under Angel with deception, corruption and conspiracy to defraud have had the charges dropped by the CPS or have been found not guilty in court and awarded defence costs out of public funds.
Deputy Chief Executive Hugh McClorry, who was sacked and charged with conspiring to defraud the Department of the Environment of £650,00, had the case against him dropped at Crown Court, won compensation for unfair dismissal and got a declaration from the council that there was “no incompetence and no misconduct” in his work. He is now the Town Clerk of Kendal.
When the CPS withdrew charges against Deputy Labour leader McGrath at Liverpool Crown Court, Mr Justice Forbes determined that all charges against the councillor had been “concluded in Mr McGrath’s favour”. No councillor was convicted of any offence.
McGrath said: “In December 1993, I was told that the cost of the investigations into my cases alone had passed the figure of £7.8 million. Angel police salaries alone, paid out by a hard-pressed force which has had to make many budget sacrifices, must have cost more than £3.5 million.”
He said the Angel team, which has run under two Chief Constables and three Commerce Branch chiefs, at times included 36 detectives, who visited Germany, Spain, Jersey and the Isle of Man in their investigations. “The amazing size of the investigation and its paltry fruit demand explanations from those in authority.”
This week Murrin said his long investigations had “cost me 14 years of my life and two businesses; I have been involved in three sets of bankruptcy proceedings. I haven’t a penny to hire lawyers.” It was time, he said, for “a full inquiry” and promised McGrath every assistance.
McGrath said : “The death of Mr Harrison will not seriously affect my legal action. I will sue his estate.”
Cablevision Receives DOJ Subpoena
Two directors resign from the audit committee
Stephen Taub, CFO.com
September 21, 2006
Cablevision Systems said it has received a grand jury subpoena from the U.S. Attorney’s Office for the Eastern District of New York seeking documents related to its stock options issues. The company also said in a regulatory filing that it received a document request from the Securities and Exchange commission relating to its informal investigation into these matters. The company assured stockholders it intends to fully cooperate with the investigations.
In addition, the company said that Richard Hochman resigned from the board’s compensation committee and the audit committee, and Victor Oristano resigned from the audit committee. Hochman and Oristano said in their respective letters that they believe it is in the best interest of the company for them to step down from these positions in light of the public attention generated by the company’s restatement tied to the stock option review, as well as “the numerous shareholder lawsuits filed in the wake of that decision naming them, among others, as defendants.”
The company also announced that it has restated its financial statements for the three years ended 2005, all quarterly periods in 2004 and 2005 and the first quarter of 2006. As a result, the company adjusted its net loss by more than $89 million for the period January 1, 1997 through March 31, 2006.
Cablevision also reported that derivative lawsuits have been filed in New York State Supreme Court, Nassau County, the United States District Court for the Eastern District of New York, and Delaware Chancery Court, by shareholders acting on behalf of the company. The lawsuits name as defendants certain present and former members of Cablevision’s board and certain present and former executive officers, alleging breaches of fiduciary duty and unjust enrichment relating to practices with respect to the dating of stock options, recordation and accounting for stock options, financial statements and SEC filings, according to the company’s regulatory filing.
In early August, the company said it had undertaken a voluntary review of its past practices in connection with grants of stock options and Stock Appreciation Rights (SARs). As a result of the review, the company determined that the date and exercise price assigned to a number of its stock option and SAR grants during the 1997 to 2002 period did not correspond to the actual grant date and the closing price of the company’s common stock on the actual grant date, it stated.
In addition to grant dating issues, the company’s review identified certain modifications made to outstanding stock option grants prior to 2002, principally extensions of expiration dates that were not accounted for properly, it reported in its filing.
Also, two awards of options and one option modification were incorrectly accounted for as having been granted to employees or modified for employees, it said. One of these two awards was to the company’s former compensation consultant (which was subsequently cancelled in 2003) and the other award related to an executive officer whose death occurred after the stated grant date of the award and before the actual grant date, the company noted.
“The company’s Board of Directors and senior management believe that the practices related to the granting of options … are contrary to the high ethical standards they believe should apply to all of the Company’s business practices,” Cablevision stated in its filing.
Cablevision Investors Sue Comp Advisor – Backdating backlash hits Cablevision’s former compensation
consultant in what may be a first-of-a-kind lawsuit.
Stephen Taub, CFO.com – November 28, 2006
The options backdating scandal may be entering a new phase. Shareholders, suing Cablevision over its options practices, have filed an amended complaint alleging that the media company’s outside compensation consultant, Lyons Benenson & Co., knowingly participated in the illegal backdating of options. Reportedly, this is one of the first cases that accuses a compensation firm of playing a direct role in the scandal.
The amended suit, filed by Grant & Eisenhofer on behalf of shareholders led by the Teachers Retirement System of Louisiana, alleges that Lyons Benenson attended compensation committee meetings during which backdated options were granted in violation of the company’s employee option plan, and that the consultant provided the committee with advice and documentation to facilitate the grants, according to a press release fired off by the law firm. …
“Just as shocking as the fact that these blatant violations occurred in the first place is that they took place under the watch of a supposedly independent compensation consultant,” said Stuart Grant, lead counsel to the plaintiffs’ group, in a statement. “As with the disclosure that the company had awarded options to its deceased vice chairman, the fact that a benefits consultant may have had a direct hand in the illegal backdating is another example of how Cablevision’s compensation practices reached some singular lows.”
In August, the cable giant said it plans to restate all of its financials dating back to 1997 stemming from a review of its stock options practices.