What is it about white collar criminals that makes my blood boil? Maybe it’s some perverse notion in my mind that “real criminals” have some semblance of street cred and the latter are basically corrupt inside traders taking an “extended vacation” in a country club… er, I mean federal institution of the penal kind.

You might fondly recall when Martha Stewart (America’s queen of cliché K-Mart furnishings and interior paint lines) got popped for securities fraud after she avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock in 2001? Yes, she was subsequently found guilty in March 2004 of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. When all things were said and done, she was sentenced in July 2004 to serve a paltry five-months in a federal correctional facility and a two-year period of supervised release that included an electronic bracelet, which I’m surprised she didn’t turn into a jewelry line.

Martha was labeled “M. Diddy” by fellow inmates because of the absolute fear she invoked amongst even the most hardened criminals. No one dared cross her as she perfected her moonshine peach lemonade and equally gangster lemon soufflé. When she did end up finishing her hard-time, she merrily returned to her Martha Stewart Living Empire and subjugates us to Martha Stewart branded vitamin supplements, maternity clothing and convection ovens. Justice would have been much better served had she toiled in the prison yard donning her artisan skills on handmade license plates.

Now in all fairness to M-Diddy, she seems like Mother Theresa when compared to one of the most prolific white collar criminals to date, Tyco’s former chief executive, L. Dennis Kozlowski, who systematically created a corporate culture of greed and excess, secretly authorizing the forgiveness of tens of millions of dollars of loans to dozens of executives to keep their loyalty¹. It gets better. At Mr. Kozlowski’s direction and without board approval, 51 Tyco employees received $56 million in bonuses — and $39 million more to pay the taxes on the bonuses — that offset loans extended by the company.

Kozlowski spent tens of millions of dollars in personal spending with company money including his $16.8 million apartment on Fifth Avenue — along with $3 million in renovations and $11 million in furnishings — and a $7 million apartment on Park Avenue for his former wife. Some of the items below would even make Martha Stewart envious:

• $80,000 American Express bill
• $72,000 fee to Germán Frers, a yacht maker;
• $17,100 traveling toilet box (um…what is a traveling toilet box?)
• $15,000 dog umbrella stand (Cat umbrella stands come in at only $7,000)
• $6,300 sewing basket
• $6,000 shower curtain
• $5,960 for two sets of sheets
• $2,900 set of coat hangers
• $2,200 gilt metal wastebasket
• $1,650 notebook
• $445 pincushion (How is that even possible?!)

In the end, some semblance of justice prevailed when Kowalski and other nefarious individuals at Tyco received extensive sentencing (Mr. K getting a maximum of 25 years himself).

Watch out white collar criminals, there’s a new sheriff in town!

It was only a matter of time before something had to be enacted to curb and dissuade these types of unethical business practices. The Sarbanes-Oxley Act of 2002 was created to protect investors by improving the accuracy and reliability of corporate disclosures. The legislation, often referred to as SOX, amends mail and wire fraud infractions with harsher punishments and imposes fines and prison sentences of up to 20 years for anyone who knowingly alters or destroys a record or document with the intent to obstruct an investigation. While most provisions of the act focus on financial records, they were clearly not meant to stop there. For example, during an investigation, discovery requests can be submitted to IT departments. In addition, such requests could require access to all e-mail communication².

The legislation not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation’s electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for “not less than five years.” The consequences for non-compliance are fines, imprisonment, or both. IT departments are increasingly faced with the challenge of creating and maintaining a corporate records archive in a cost-effective fashion that satisfies the requirements put forth by the legislation².

Quick data retrieval is another requirement under Sarbanes-Oxley, which makes perfect sense. In the event a company is subpoenaed, the last thing a corporate legal team wants to do is wait a week for their IT department to pull the right records, which is a detriment to crafting their defense.

Emulex and Quantum – Helping CEOs stay out of prison (legally of course)

Partners and appliance integrators continue to certify and adopt Emulex 16Gb Fibre Channel (16GFC) Host Bus Adapters (HBAs) because we offer the best performing HBA available today, enabling the most compelling application throughput and I/O scalability³. In addition, our superior reliability and extensive interoperability testing allows for seamless deployment across multiple platforms.

Emulex recently announced broad partner adoption of its LightPulse® 16GFC HBAs worldwide. Emulex 16GFC HBAs are the most widely deployed 16GFC HBAs by OEMs, with more than 70 percent of the overall revenue market share for 2012⁴. Quantum, a global expert in data protection and big data management solutions, specifically certified Emulex 16GFC HBAs with their solutions in order to achieve the most scalable solutions for its data archiving and backup solutions. Chiefly, a key requirement was addressing the strict data retrieval access times specified by SOX.

Quantum wanted to take advantage of the Emulex 16GFC adapter’s superior performance and low latency benefits required for their data recovery solutions. In particular, The Quantum LTO6 drives within the Quantum Scalar i500 and i6000 libraries leverage Emulex 16GFC HBAs to deliver increased bandwidth for improved backup and recovery performance. This is important, as applications drive increased storage growth, resulting in the need for robust and rapid backup to minimize both data loss downtime and most importantly, recovery times.

Make no mistake about it, SOX can bite a corporation in the caboose if they aren’t prepared for an audit and that’s why they require a cost-effective, reliable and easy-to-manage solution with options to scale from terabytes up to many petabytes. When coupled with Emulex 16GFC HBAs, Quantum Scalar libraries deliver improved backup and recovery performance to address SOX requirements, now and in the future.

Unfortunately, I am certain we will continue to see unethical business practices that deem the wrath of SOX in the future (e.g. Bernie Madoff). However, for every white collar criminal there are a million white collar good-guys trying to do the right thing. How about starting with Emulex 16GFC adapters? It the surest way to avoid having to knit dog sweaters with Martha Stewart in prison.

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1. The New York Times, 2002

2. TechRepublic: Sarbanes Oxley Compliance Regulatory Review, August 2005

3.  Demartek: Emulex LPe16000B 16 Gb Fibre Channel HBA Feature Comparison, December 2012

4.  Dell’Oro Group: Fibre Channel Adapter Vendor Report 4Q12, February 2013

Tags: 16Gb Fibre Channel, 16GFC, Emulex, Quantum, technology
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