Miniscribe Corporation

30 Pages Posted: 21 Oct 2008  

Robert Sack

University of Virginia - Darden School of Business

Kristi Severance

Central European and Eurasian Law Initiative - Legislative Assistance and Research Program

K. Johnson

affiliation not provided to SSRN

Abstract

MiniScribe manufactured disk drives for personal computers. It stumbled during an industry shake, but was rescued by a turnaround specialist. The turnaround appeared to be spectacular, but it was only an illusion. After four years of reported successes, the company announced that all prior financial statements were inaccurate, and enormous losses wiped out all equity. In the ensuing investigation, it came out that a large number of employees had caved in to apparently extraordinary pressure for results and had adopted a number of fraudulent schemes to increase profits. Perhaps the most bizarre scheme was to package bricks and ship them as diskdrives. Sixteen individuals were sanctioned by the U.S. SEC, and the investment bankers and accountants were sued for substantial damages.

Keywords: ethical issues, fraud, computer industry, Securities and Exchange Commission, corporate governance

JEL Classification: M41, M43, M49, G24, K22

Suggested Citation

Sack, Robert and Severance, Kristi and Johnson, K., Miniscribe Corporation. Darden Case No. UVA-C-2139. Available at SSRN: https://ssrn.com/abstract=1276591

Robert Sack (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Kristi Severance

Central European and Eurasian Law Initiative - Legislative Assistance and Research Program ( email )

740 15th Street, N.W.
Washington, DC 20005-1019
United States

K. Johnson

affiliation not provided to SSRN

No Address Available

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