InfoGroup's Jet Set CEOWhat's the difference between a public company and a piggybank? Apparently not much, if you are InfoGroup's ( IUSA) former CEO Vinod Gupta. Gupta, who also founded the database provider, agreed Monday to pay more than $7.3 million to settle federal regulators' charges he embezzled nearly $9.5 million from the company to finance a lifestyle that included private jet travel (with and without ex-President Clinton), multiple vacation homes and nearly two dozen fancy automobiles. Unsurprisingly, the formerly jet-setting CEO agreed to the settlement announced by the Securities and Exchange Commission without admitting or denying the agency's allegations, but did agree to refrain from future violations of securities laws. Gupta served as CEO and chairman of the company from 1992 through August 2008, when he resigned to settle a shareholder lawsuit alleging the company misspent millions of dollars on domestic and international air travel for Clinton and his wife, then-Sen. Hillary Rodham Clinton. Bill Clinton had a six-year, $3.3 million consulting contract with the company, ostensibly to open doors for Gupta and Omaha, Neb-based InfoGroup. (Either that, or Bill has mad tech skills we don't know about.)
Boston Scientific's Latest Heart-StopperBe still our beating hearts, Boston Scientific ( BSX) is screwing up again. The cardiac device specialist said Monday it was voluntarily suspending all sales of its implantable heart defibrillators after it failed to notify regulators of changes in how it manufactures the devices. Boston Scientific said the manufacturing change poses no risk to patients and it was working with the FDA to resolve the situation. The company, which just last month agreed to pay more than $1.7 billion to rival Johnson & Johnson ( JNJ) to resolve three patent disputes over its heart stents, conceded that the slip-up could have a material impact on the company's previously issued revenue and profit guidance. As a result, shares of Boston Scientific seized up on the news, falling by as much as 18%.
Moody's Credibility GambitOn the plus side, Moody's ( MCO) is finally rating credits responsibly after more than a decade of taking Wall Street's money for nothing. On the minus side, by waiting so long to do their jobs, these boneheads could ignite a global depression by dropping its triple-A rating for the U.S. when we need it the most. Moody's, which helped spawn the credit crisis by blessing billions in toxic mortgage bonds with triple-A ratings, said Monday in a report that the top notch credit ratings of the U.S. and Britain are currently "well-positioned, despite their stretched finances." The fragility of the global recovery, however, exposes these governments to "substantial execution risk in the implementation of their exit strategies, which could yet make their credit more vulnerable."
Netflix Prize FightHallelujah! There is going to be one fewer stupid movie award show cluttering the airwaves and blocking our bandwidth. No, we're not talking about the People's Choice Awards. Netflix ( NFLX) is cancelling its movie-recommendation prize. The popular DVD-by-mail service provider announced late last week it was scrapping the second installment of the contest in order to settle a lawsuit alleging it intended to release millions of movie-rental records that could have illegally exposed sensitive information about its members' lifestyles. Netflix, which boasts over 12 million subscribers, was going to release the data without names attached, but critics maintained the privacy protections were still inadequate. Whew! We were worried somebody might figure out that it was indeed the employees here at the Five Dumbest Lab who rented Caddyshack 26 times. Thankfully, now nobody will ever know.