BradBlog >> EXCLUSIVE: SECURITIES FRAUD LITIGATION FILED AGAINST DIEBOLD,

[sabra]

http://www.bradblog.com/archives/00002153.htm

EXCLUSIVE: SECURITIES FRAUD LITIGATION FILED AGAINST DIEBOLD, INC!
Eight Current and Former Executives Named as Co-Defendants, Including former CEO O'Dell and New CEO Swidarski

Class Action Suit Alleges Fraud, Insider Trading, Manipulation of Stock Prices, Concealment of Known Flaws in Voting Machines and Company Structural Problems

...

The BRAD BLOG can now report that a Securities Fraud Class Action suit has been filed against Diebold, Inc. (stock symbol: DBD) naming eight top executive officers in the company as co-defendants. The suit has been filed by plaintiff Janice Konkol, alleging securities fraud against the North Canton, Ohio-based manufacturer of Voting Systems and ATM machines on behalf of investors who owned shares of Diebold stock and lost money due to an alleged fraudulent scheme by the company and its executives to deceive shareholders during the "class period" of October 22, 2003 through September 21, 2005.

The suit was filed today in U.S. Federal District Court in Ohio and alleges the company "artificially inflated" stock prices through misleading public information designed to conceal the true nature of Diebold's financial and legal situation. The defendants are also alleged to have attempted to disguise well-known and ongoing problems with Diebold's Voting Machine equipment and software. Additionally, the suit alleges insider trading by defendants resulting in proceeds of $2.7 million. Remedies are sought under the Securities Exchange Act of 1934.

...

THE DEFENDANTS...

Named as co-defendants in the suit along with former CEO O'Dell and new CEO Swidarski are President of International Operations, Michael J. Hillock; Senior Vice President of Customer Solutions, David Bucci; Interim Chief Financial Officer, Principal Accounting Officer and Controller, Kevin J. Krakora; Vice President and Chief Information Officer, John M. Crowther; Senior Vice President and CFO, Gregory T. Geswein; and President and COO, Eric C. Evans. (Titles applied to the named co-defendants during the class period. Evans, for example resigned from the company on the same day as the Sep. 21, 2005 announcement.) "Each individual defendant," the suit points out, "owed a duty to the Company and its shareholders not to trade on inside information."

[UrbScotty]

1. First to nominate the thread! (nt)

[woodsprite]

2. 2nd to nominate!!! n/t

[CrazyOrangeCat]

8. great username, btw!

:)

[Kingshakabobo]

3. Do we know anything about the "problems with Diebold's Voting Machine" ...

piece of this story?? Other than that, it looks like more run-of-the-mill crooked republican businessmen defrauding their stockholders.

[wordpix]

11. it's in the article: "defendants knew and concealed that..."

<snip>The claim cites a number of allegedly misleading news releases pertaining to the fitness and security of election systems as contracted by Diebold in San Diego County in 2003; their settlement for $2.6 million with the state of California in 2004, wherein Diebold is alleged to have concealed "the dimensions and scope of internal problems at the Company" from investors; and an "astonishingly low and incredibly inaccurate" statement about "restructuring charges" in the Sep. 21 announcement.

Once again, quoting from the lawsuit:


During the Class Period, defendants knew and concealed that:
(a) the Company remained unable to assure the quality and working order of their voting machine products;
(b) the Company lacked a credible state of internal controls and corporate compliance;
(c) the 2004 settlement with the State of California served to conceal from investors the dimensions and scope of internal problems at the Company, impacting product quality, strategic planning, forecasting, guidance, internal controls and corporate compliance; and
(d) the Company’s "prediction" of astonishingly low and incredibly inaccurate restructuring charges for the entire 2005 fiscal year grossly understated the true costs defendants faced to restructure the Company. <snip>

There's more in article, too. http://www.bradblog.com/archives/00002153.htm

[renate]

16. yay!

the Company remained unable to assure the quality and working order of their voting machine products
Thanks for pointing out the REALLY exciting part of this story!
It's always nice when the bad guys get into generic trouble, it's GREAT when Diebold gets in trouble for being evil and for making crappy machines!
:bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce:

[wordpix]

4. oh, happy day! 3rd nominate! BushCo investors will be pissed about this

[longship]

5. The hits just keep on a-comin'

It's one thing after another for the Repugs. When all is said and done hopefully we'll be able to stick a fork in the GOP. They're done.

A Diebold trial could be a chance to get certain issues on the table.

[Dr.Phool]

45. I'd feel a lot better if it were a criminal complaint.

In a civil case the judge can issue a gag order, and a class action can take YEARS to go to trial.

It is a good start, but I wouldn't start celebrating just yet.

[Vinnie From Indy]

6. Using DU to pimp your own web site using LBN is lame

Do they just pull this stuff off of the wires then rush over here to post a "bradblog" exclusive?

[sabra]

10. huh? I have no affiliation to Bradblog. Just giving credit,

where credit is due.

peace.

[Vinnie From Indy]

13. Thats cool!

I just get a chuckle from BRADBLOG's not so subtle self promotion. No big deal!!!! :)

[Joe Chi Minh]

22. Do you begrudge them that, Vinnie from Indy?

If BradBlog keep coming up with this kind of stuff they can blow their own trumpet as much as they like, as far as I'm concenred.

[Vinnie From Indy]

23. I would agree if

it didn't appear that he is pulling stuff off of the wires then plastering BRADBLOG exclusive all over it and posting it here.

[BradBlog]

31. Then I guess you agree...

Since nothing was "pulled off the wires," Vinny. The story was original and exclusively broken by BRAD BLOG. If you are aware of a prior wire story on this, by all means let us know!

Brad

[OzarkDem]

71. Bradblog had the scoop

I've been watching the story since BradBlog posted last night and it didn't break into regular news until later.

As usual, the MSM is not picking it up. Having a resource like BradBlog to get the story out to those who might never notice it is very helpful.

[Joe Chi Minh]

32. Oh, I get it. It's not their own original stuff. Sorry.

[BradBlog]

42. Uh, Yes, it is...a BRAD BLOG Exclusive...

[rman]

62. For some people, "appearances" are enough to draw conclusions.

Just look at Bush and his war on terror.

[CrazyOrangeCat]

7. and poor, dumb Kansas City . . .

. . . decided last week to use their damned voting machines. grrrrrrr.

[wordpix]

12. yeah, KC pols should be held accountable for that

[CrazyOrangeCat]

15. Paper ballots were too . . .

. . . cheap and easy to use . . .

(again, grrrrrrr!)

[Judi Lynn]

37. Worst decision I've ever heard made in this town. The WORST.

I'm hoping it's not all final yet.

The mayor, Kay Barnes, is the neice of Walter Kronkite. Her assistant, Steve Glorioso, was a big force in getting that choice made, which is allegedly based upon the hope to save taxpayers money.

How valuable is a tamper-proof vote? Jeez.

[Patsy Stone]

9. K&R

Because this is GREAT! :woohoo:

[hedda_foil]

14. OMG, they found the PERFECT plaintiff!!!

...THE PLAINTIFF...

Plaintiff Konkol, a just-retired 29-year public school employee from Central Wisconsin first invested in Diebold in 1999. She told The BRAD BLOG that she purchased the stock thinking, "ATM's that'd be the way to go." She originally invested $500 which eventually grew to $1400 before falling. She is also invested in Diebold via mutual funds held by the Wisconsin Education Union in which she is a member. Konkol, a 56-year old grandmother of three, recently returned from two weeks of volunteering on the Gulf Coast with several members of her Lutheran church. "We got a big group together and we went down to the Gulf to help out in Katrina."

"I believe in churches...I believe we should practice what we're preached to about," she told us. "I don't like it when big companies take advantage of us little people," she said. "I can't say that I'm anti-big business...I just want things to be fair."

It appears that SCOTT+SCOTT, the attorneys associated with the case, are just beginning to learn about the full scope of the fraud allegedly perpetrated by Diebold on investors. Amended complaints with additional details are expected to be filed in the weeks and months to come. Other law firms are also expected to file similar suits which will eventually be consolidated by the Federal District Court hearing the case. Indeed The BRAD BLOG has been contacted since filing our original report on this last week, by other firms who are said to be pursuing similar litigation against Diebold.

[wordpix]

18. spread the word-states and cities that voted on Diebold machines in '04

need to sue!

[No Exit]

56. Those bad lawyers--stirring up litigation like that!

All the same... think of the joy at the O'Dell household: Wally gets to "spend more time with his family"!:beer:

[Tuesday_Morning]

17. more from Bradblog.com

The claim cites a number of allegedly misleading news releases pertaining to the fitness and security of election systems as contracted by Diebold in San Diego County in 2003; their settlement for $2.6 million with the state of California in 2004, wherein Diebold is alleged to have concealed "the dimensions and scope of internal problems at the Company" from investors; and an "astonishingly low and incredibly inaccurate" statement about "restructuring charges" in the Sep. 21 announcement.

Once again, quoting from the lawsuit:

During the Class Period, defendants knew and concealed that:
(a) the Company remained unable to assure the quality and working order of their voting machine products;
(b) the Company lacked a credible state of internal controls and corporate compliance;
(c) the 2004 settlement with the State of California served to conceal from investors the dimensions and scope of internal problems at the Company, impacting product quality, strategic planning, forecasting, guidance, internal controls and corporate compliance; and
(d) the Company’s "prediction" of astonishingly low and incredibly inaccurate restructuring charges for the entire 2005 fiscal year grossly understated the true costs defendants faced to restructure the Company.

[wordpix]

19. poor *, just as he's coming up in polls, Fitz goes after Rove & now THIS

[LiberalinNC]

20. Funny, didn't the CEO just quickly resign...

Geez, I wonder why! :evilgrin:

[thecrow]

33. Why, yes, he did ... I read about it tjust this morning:)

[1776Forever]

21. Will the poor dumb sheep ever get it????

WOW - if this comes out like the Libby story has unfolded we might have something here!

Freedom - Will we ever get it back?:applause:

[babylonsister]

26. Welcome to DU, 1776Forever! nt

[babylonsister]

24. So despite all the research done on the election fraud in 04,

they did their own selves in. How sweet!

[tinrobot]

25. I'm glad to see voting machines are part of this!

If it had been just securities fraud, it might have slipped under the radar, but the voting machine issue makes this very good indeed. Lots of juicy news stories to come, I bet!

Can't wait to see what the lawyers find out.

[AntiFascist]

28. Great news, when will KO or someone cover it in the MSM? nt

[iconoclastNYC]

27. Is this our IN?

Is this lawsuit the perfect "IN" to get under Diebold's hood? Is there hope that this could be the start of unraveling something bigger? Plea bargains, "flipping" witnesses? Etc?

Funny that the election division head is now the CEO...remember Diebold also makes ATMS and they purchased the the Voting division.........maybe Wally is setting him the head of the Voting division to be the "bad apple" fall guy.....like Ken Lay set up Skilling?

[Tandalayo_Scheisskopf]

29. Yup.

There is a little thing called "Discovery" wherein the plaintiff's lawyers can open up all sorts of dark and dusty corners at Diebold. With the court's approval, of course.

I do hope they are working, right now, to put their email and other servers under court seal. There will be plenty of fun stuff in there, I assure you.

[joeunderdog]

53. Years-long threads of indicting emails have been published already.

The employees were laughing at their own ineptitude. They were discussing the security flaws and the need to keep it quiet. Musta worked cuz it never got past the "internet gossip" stage. In fact, Diebold sued students to have the emails taken OFF their website.

Let's hope this revelation has longer legs.

[dwp6577]

30. Will their voting machines be allowed for mid-terms?

based on this investigation

"The defendants are also alleged to have attempted to disguise well-known and ongoing problems with Diebold's Voting Machine equipment and software"

How could they?

[texpatriot2004]

61. Welcome to DU Dwp6577 and that's a good point you bring up

I think it would be problematic to use the Diebold machines...wouldn't you agree?

[banana republican]

34. gosh if the shareholders don't believe them why should we????? n/t

[Up2Late]

35. YES! THANK YOU Non-Specific God or Gods!

And a Happy Holidays to ALL! ;) (wink)

LOCK 'EM UP!

[MellowOne]

36. Yeah....not reliable for voting! n/t

[superconnected]

38. It's beginning to look a lot like Christmas (sings)

looks like diebold is going to have some bigtime problems.

"Class Action Suit Alleges Fraud, Insider Trading, Manipulation of Stock Prices, Concealment of Known Flaws in Voting Machines and Company Structural Problems"

Maybe they'll fold.

[nolabels]

60. Stop that, I hate Christmas

Bah humbug, :P

There is no way people have millions of dollars tied up in something like this with all them connections and just let flounder into the silt of the oceans. I smell a rat, folding this company up so people cannot find out how rigged the elections were makes sense to me. Some quid pro qou or something is going on here. To think there might of been hanky panky going on for many years which means all them fraudulent things done by legislatures were done illegitimately. Them legislatures shouldn't of been even seated because they were not even legally elected. Like does anyone think of the ramifications with this stuff.

And like screw all that legal mumbo jumbo, if people get wind of that kind of corruption going on for them many years then mostly you can bet people will not be going for people getting off on technicalities. Technicalities will not be tolerated by no angry mobs, especially with a one trillion shortfall of waste over a lot of peoples head

[Quakerfriend]

39. Can Fitz use this to bring down the whole corrupt group

of thugs?!

[Botany]

40. Can we now get a do over?

Bad machines = bad vote

and remember in 2000 in Volusia County Florida one Diebold machine gave George Bush 16,000 votes .....
which was later blamed on a bad memory chip ...... however W still got the votes.

[seafan]

50. Volusia Co. still sticks in my craw.

This is a fitting development, yesterday being the fifth year anniversary of the robbery of our democracy.

December 12, 2000

[Botany]

51. and don't forget Thersa Lapore aka Madam Butterfly.

She was behind those butterfly ballots ..... registered dem ....... opps she had been a republican before
and had for year worked fro Saudi arms dealer A. Kashoggi ..... funny where ever there is a bush in trouble
you find a Saudi..........

someday this will all come out (I Hope)

[seafan]

54. How could we forget this debacle....

[Faygo Kid]

41. This is why the Right wants "tort reform" and class action limits

So they can go forward with their dirty deeds without accountability. Let's hope the discovery process opens up their sordid bunker and let some fresh air in. We could use it, given that the mainstream media has abrogated their investigative responsibility.

[No Exit]

57. You nailed it!!

Wouldn't want those little people to be able to make a peep about it when the Big Boys do whatever the hell they want, regardless of how much they rape those little people out of their little bank accounts!

Of course, sometimes some eevil lawyer gets PAID for such a lawsuit, but what're we gonna do?

God FORBID that anyone who isn't in the in-group of billionaires and Big Corporations should EVER be able to hold onto life, liberty, or property--under any circumstances.

[JudyM]

68. So true. Play up "evil lawyers'" lack of ethics to distract from real evil

at the head of our government.

[420inTN]

43. Diebold CEO resigned earlier today

http://www.businessweek.com/ap/financialnews/D8EFFVO00.htm?campaign_id=apn_tech_down&chan=tc

and their stock closed up $2.01.

Here's the press release from Scott + Scott, LLC on the class action lawsuit:

http://biz.yahoo.com/prnews/051213/netu036.html?.v=32

Too bad I didn't hear about it earlier so that I could've jumped into the market to short the stock.

[Mountainman]

44. You have to like the way the repuke's greed helps them implode.

It happens to the best of them. They begin to think that rules don't apply to them because of the power position they place themselves in. Repuke's love for wealth is the driving force behind all they do. I don't mean the freeper class of repuke, they are like groupies to the wealthy repukes.

If it isn't a moral collapse it's something illegal. I'm just glad they don't have the whole damned country bought of by now.

[Zorra]

46. Electronic voting machines need to be outlawed.

This should be obvious to any reasonable person.

[Arkham House]

47. Time for an apology to the tin-foil hats...?

I admit it--I've always been sceptical of the "election fraud" theories, particularly the Diebold-related ones. I could see individual cases of vote fraud--Illinois in 1960, Ohio in 2004...this is all as old as the Republic. But the big, tin-foil hat variety some people, especially Truth Is All, have been spouting? Sorry--it just didn't seem possible. I still don't know if it's likely. But anyone who dismisses it out of hand now just is being naive.

[electropop]

49. Truth Is All can be a bit dizzying with the blitz of numbers.

If you'd prefer some US Government-approved facts and figures, read the GAO report, which officially acknowledges that the machines are insecure and that votes have been flipped as a result.

[DemonFighterLives]

48. Sounds good!

Some PO'ed investors can make a big difference.
:dem:

[lonestarnot]

52. Woooooooooooodamn whooooooooooooooo!

[radio4progressives]

55. This is by far the most important issue we need to focus on...

like a laser ...

do everything we have to get this on the radar and reported endlessly in the MSM - and i mean everything.

all attention and focus should be on this item - until the public gets what is at issue here.

[Vidar]

58. Finally some good news. Thanks for posting.

[Justice Is Comin]

59. I want to point out another thing too.

Fraud is the one thing that voids the protections of a corporation for the principals. If fraud is proven, it allows the defendant to "pierce the corporate veil." That's the legal term and equates to a bonanza for the plaintiff. Meaning that it is not dischargeable in bankruptcy. Plus it makes the officers of the corporation individually and severally liable for the penalties.

That's why you see major major major sweating going on right now.

[jsamuel]

63. woot!

[Mad_Dem_X]

64. I second that woot, and raise you a huzzah!

:bounce: :kick:

[Al-CIAda]

65. .

[Trevelyan]

66. Way to go Janice Konkol and thanks to BradBlog for staying on this story

Without honest elections, we will never be rid of BFEE and Bilderberg choices for our President and Congresspersons.

And thank you to GreggPalast.com and Bev Harris of BlackboxVoting and The Green Party, David Cobb for exposing the massive election fraud in 2000 and 2004.

[Trevelyan]

67. Reminders of 2004 Election Fraud - Why Bush is still able to Commit Atroci

What's to stop us from designing, and getting certified(?) a high speed ballot auditor that utilizes intelligent high resolution "machine vision". We can take a multi megapixel picture of each ballot and burn it to CD/R or DVD, at the same time, we analyze the image with pattern recognition software looking for marks left by the voter in order to count them.

The current ballot scanners in use all use a single, or dual sensors to detect each mark. The sensors can only reliably detect a narrow range of reflected light before they react so they must be calibrated to a given range produced by a specific writing implement.

While Democrats today are trying to figure out what they did wrong, and how to change the party for the future, the real issue is the voting machines and election reform. It is more important than the economy, the war, the environment, health care, taxes, and women's rights.

If we do not take back our right to vote and have it counted properly, none of these other issues matter at all and nothing will change. For more information on this important subject see:

http://election.solarbus.org

Summary of allegations

a. The Supervisor of Elections has unreasonably delayed providing information.

b. The certification was based on inadequate and incomplete information regarding the election results.
=
6. Some or all of the information requested on Nov. 2, 2004 by Black Box Voting is still missing from 59 of the 179 voting precincts, including portions of or all of the voting machine tapes for those 59 precincts, which are a vital part of official paper record of the election results from those
precincts.

Nominated:dem:

[JudyM]

69. Please just edge a little closer to intentional mishandling of votes! n/t

[truthnproof]

70. 'We will never use Diebold in an election again'

Check http://www.bradblog.com/ for all the voting fraud, etc. stuff.

And http://www.projectcensored.org/newsflash/voter_fraud.html for shocking facts on the 2004 election.

But here’s the scoop on the tests on hacking the voting machines:

BBV: Leon County, FL to Dump Diebold After Undetectable Hack Reverses Test Election!

Results Completely Flipped Despite 800 Documented Officials Told by Diebold That It Couldn't be Done!

Election Supervisor Requests Funds to Replace Diebold in County, Says 'We will never use Diebold in an election again'

The bad news keeps rolling in for Diebold. But that is hopefully good news for democracy and America! And it doesn't get any plainer than this stunning report from election watchdogs at BlackBoxVoting.org

Even as the beleaguered American Voting Machine company smarts from yesterday's filing of a securities fraud class action suit a test election was carried out on Diebold voting machinery in Leon County, Florida.

Diebold's security measuresfailed miserably and were easily defeated by a hack performed by a computer security professional on a Diebold Touch-Screen Voting Machine and Central Tabulator.

In a post yesterday about the test and its remarkable results, BBV's Jim March gave this stunning summary of what happened:

Due to security design issues and contractual non-performance, Leon County supervisor of elections Ion Sancho told Black Box Voting that he will never use Diebold in an election again.

He has requested funds to replace the Diebold system from the county. He will issue a formal announcement to this effect shortly.

Finnish security expert Harri Hursti proved that Diebold lied to Secretaries of State across the nation when Diebold claimed votes could not be changed on the memory card.

A test election was run in Leon County today with a total of eight ballots - six ballots voted "no" on a ballot question as to whether Diebold voting machines can be hacked or not.

Two ballots, cast by Dr. Herbert Thomson and by Harri Hursti voted "yes" indicating a belief that the Diebold machines could be hacked.

At the beginning of the test election the memory card programmed by Harri Hursti was inserted into an Optical Scan Diebold voting machine. A "zero report" was run indicating zero votes on the memory card. In fact, however, Hursti had pre-loaded the memory card with plus and minus votes.

The eight ballots were run through the optical scan machine. The standard Diebold-supplied "ender card" was run through as is normal procedure ending the election. A results tape was run from the voting machine.

Correct results should have been:

Yes:2 No:6

However the results tape read:

Yes:7 No:1

The results were then uploaded from the optical scan voting machine into the GEMS central tabulator. The central tabulator is the "mothership" that pulls in all votes from voting machines. The results in the central tabulator read:

Yes:7 No:1

This proves that the votes themselves were changed in a one-step process that would not be detected in any normal canvassing procedure - using only a credit-card sized memory card.

Diebold Elections Systems head of research and development Pat Green specifically told the Cuyahoga County board of elections that votes could not be changed on the memory card.

According to Public Records responses obtained by Black Box Voting in response to our requests shows that Diebold promulgated this misrepresentation to as many as 800 state and local elections officials.


March added later, "this was all done without getting any passwords for any system. All we had was the same degree of physical access that any mid-to-high level elections staffer or official would have."

Case closed? One would think so! But remarkably, states and counties around the country are still entering into contracts with this company to count your votes in upcoming elections!

Be sure to let California's Sec. of State know about this latest knews, as well as your local Elections Board! Otherwise, these machines may well be coming to a hacked election near you!"

[PATRICK]

73. Not so remarkably

Imagine the chief armies of the Revolutionary War. The blues will not face the reds in open combat. Real results against real vulnerabilities are made by irregular operations on the side. Eventually, with great care not to risk losing, the blue army finally beats down the weakened foe.

But our blue army, the Democrats especially, has done nothing to take a headon position against the known and fatal weaknesses of proved election fixing. The best investigation and litigation and pommeling has come almost entirely from the side, irregular units etc. But the difference here is the blue army is not much in this game at all, has no real plan, no real cognizance they are at war, and no intention of stepping in anytime soon. Every single district falls under the same traveling medicine show with not one ever learning anything besides the "controversy over the paper trail" and that in a watered down slant that makes fighting fraud already far down the slippery slope.

While waiting for some David to slay the Goliath(Diebold) the parties are not engaged, the Dems are ignorant and demoralized patsies, the GOP resting fatly on its superior position and calmly doing as it wills. The remnants of the law themselves get simply thwarted, delayed or shoved aside so that it not assured the guerrilla war by the citizens will alone be miraculously decisive. The march of fraud relentlessly goes on.

[McCamy Taylor]

72. And WTG Leon County, Florida!

Diebold is going down the Enron Road! Dump that stock while you can.