Bradley said that bets taken from those alleged to be with CBS skewed the odds significantly on “Survivor” contestants.
At least two players have been identified as CBS employees and other names may be connected to the network or may be aliases, Bradley said. The biggest payoff, $8,000, came on a $1,000 bet placed on the fifth “Survivor” at 8-to-1 odds.
Odds will be offered on the seventh “Survivor” but all bettors will be carefully monitored, BoDog President Rob Gillespie said in a statement.
The players’ current bets on “Survivor: Amazon” have been canceled and their money refunded, Bradley said. “Some have been right, many have been wrong.”
By Lynn Elber
The show narrows the field to two finalists in filmed competitions.
Callers to the Bodog.com offices were told that wagers were no longer being accepted on “Survivor.”
BoDog requires that bettors must not have knowledge of an event’s outcome. He declined further comment on the allegations, or on any action CBS might take.
Betting on events other than sports or racing is banned in Las Vegas sportsbooks, a spokeswoman for the Nevada Gaming Control Board said Thursday. Most offshore sportsbooks accept such alternative bets, said BoDog’s Bradley.
He wasn’t aware of any other possible legal sanctions.
They wagered correctly on who would be the final two contestants in both the fourth and fifth editions of “Survivor,” Bradley said. One person was said by BoDog to work in a “production role” for CBS.
“Throughout the history of ‘Survivor,’ many have believed they knew the outcome of the show,” Ender said. The winner is unknown until he or she is chosen in a vote by other contestants during a live broadcast.
“We’re pretty sure this is the case,” Bradley said. All Rights Reserved.
An online sportsbook said it has dropped betting on CBS’ “Survivor” after allegedly finding that network employees were wagering – and winning – on the hit reality show.
The Costa Rica-based BoDog.com found at least two CBS employees betting on the show’s outcome, said BoDog spokesman Lance Bradley. Asked if BoDog might consider legal action, he replied: “It’s not something we’d want to pursue, as a matter of precedent.”. The players in question opened accounts with BoDog before “Survivor: Marquesas,” the fourth show, and bet only on the show and no other events.
For the current “Survivor,” the bets in question affected the odds for contestants Jenna Morasca of Pittsburgh, Pa., and Matthew Von Ertfelda of Washington, D.C.
“Only ‘The X-Files’ has more conspiracy theories than ‘Survivor,’” CBS spokesman Chris Ender said. This material may not be published, broadcast, rewritten, or redistributed. The suspicion is they had insider knowledge, he said.
“This then begs the question of whether it was obvious at the time. Enron executives Kenneth Lay, Jeff Skilling and Andrew Fastow — all convicted of white collar crimes — emblemized the bad side of the one percent before the term existed.
Many transactions — ultimately at the collapse of the company — involved some of the largest banks in the country.
Former Enron CEO Jeffrey Skilling reportedly led the company’s risky bets to revolutionize the market for natural gas and commodities trading. Skilling was sentenced to 45 years in prison and fined $45 million.
8. Higher capital requirements and less leverage reduce the danger of a catastrophe.
“One lesson we haven’t learned from Enron is that corporations will engage in conflicts of interest, and some won’t stop until action is taken,” he said.
Opinions over the role of regulators are mixed. “Often that means they don’t get paid at all. Names like AIG and WorldCom may have replaced Enron in the vernacular when referring to corporate meltdowns and greed. history. We need to create the right incentives to keep people honest – or at least not afraid to speak out.”
Olympus managed to hide losses for two decades and admitted only recently to doing so. “Lots of people were aware or should have been aware. “We could have taken the opportunity to preserve the valuable in the new finance and carve out the excess. Unlike Enron, Olympus came clean on its own.
7. We didn’t, but we still could and we still should.”
10. Conflicts of interest continue to occur
Alex Gibney, filmmaker who produced “Enron: The Smartest Guys in the Room,” said the big lesson that wasn’t learned was Enron was aided and abetted by the most important investment banks in America and around the world.
“We muddled through and avoided more Enron-type frauds and collapses, which isn’t bad. Still building fragile financial structures
“Just because it’s a big respectable bank, don’t think they’re not into gambling,” Gibney said.
“We could have taken a deep look at the special purpose vehicles, derivatives, repos, and the rest of the ‘new’ finance that was core to Enron’s business model, in order to see what needed to be done better,” Mark Roe, professor at Harvard Law School, said. “At some level, we might be better off with a simple cigarette-style warning — this investment is not guaranteed; you could lose all of your money — than the phone book style SEC reports that are currently distributed to investors.”
“They employed brilliant people. I would argue that at best, the firm smelled very bad.”
Lubben said the recent financial crisis showed that small investors still do not fully understand where shareholders stand in the priority line — the “food chain” — of large corporations.
“These frauds don’t happen in a vacuum,” Weiss said in agreement. “The outright fraud of the type that was the core of Enron’s ultimate collapse — bogus transactions that generated accounting entries but not real profits — was contained after Enron (even if other frauds, like Madoff’s arose).”
Weiss said one could not understand how Enron valued things, or management had discretion in the valuations which allowed management to choose their profit number.
. It was his CFO, Andrew Fastow, allegedly idolized Skilling, and did his part to cook the books, hiding billions of dollars in debt.
Given the lopsided votes in favor of the law, Weiss said it was likely not well-read by lawmakers before it was passed.
Stephen Lubben, law professor at Seton Hall University School of Law, said recent years have also shown the limits of the ever-increasing disclosure obligations imposed on companies.
Weiss said the Sarbanes Oxley Act, which created new standards for accounting firms, boards and management, was a “clear overreaction” to the Enron scandal, which is “understandable.” Weiss said good and bad came as a result of its passage in 2002.
“You’re not so far out on the ledge,” he said.
6. In 2001 Enron employees lost $1.2 billion in retirement funds and $2 billion in pension funds while Enron’s top execs cashed in $116 million in stock, according to the film, “Enron: The Smartest Guys in the Room.” The average severance pay was $4,500 while the top executives were paid bonuses totaling $55 million.
9. “You probably could have gotten benefit of Sarbanes Oxley with a smaller law that avoided the pitfalls that companies complain about.”
Peter Elkind, editor at large with Fortune magazine, investigative reporter and co-author of Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron with Bethany McLean, said business, especially the financial world, can’t be left to regulate itself.
Ten years after the energy and commodities firm Enron collapsed under the weight of a massive fraud, much has changed about how corporate America does business and much, unfortunately, has remained the same, with new frauds and excessive risk-taking exposed all too frequently.
“The risks that traders take pose risks for all of us,” he said.
2. Many in the business community say business regulation is doing more harm than good for an already fragile economy.
Elkind said regulatory agencies need to have the weapons and funding to closely monitor new, ever more powerful financial instruments.
In 2006, Skilling was convicted of 19 criminal counts, including one count of insider trading, related to his role in the massive fraud. Corporate leadership makes all the difference in the world–for good and for bad
“When you pass these laws, it adds a level of complexity that is hard for many companies, especially small companies,” he said. Many say regulators need teeth to enforce rules and weed out shady accounting. Instead of the massive amount of documents can’t we do one thing at a time, isolate and make it clear, so we have a sense of the repercussions?”
Corporations still use accounting tricks to hide debt. Excessive leverage is as dangerous as a bad bet
“We did learn some lessons and people were more careful, but greed creeps back in again,” said Lawrence Weiss, professor of international accounting at Tufts University’s Fletcher School of Law and Diplomacy.
“The changes made after Enron did little to avoid the shocking failures at AIG and other financial companies,” he said. Enron allegedly made prepay deals worth billions of dollars, such as pretending to engage in energy swaps with other companies but they were actually dealing with offshore companies that were banks, in essence to receive loans. Regulators and the regulated continue their dance
Weiss said at the most basic level, the key lesson from the South Sea Bubble, Enron, and Madoff Ponzi scheme is knowing whether a business itself makes sense.
Sen. If it’s too good to be true, it probably is
“Conflicts of interest will continue to plague Wall Street until regulators use the new Dodd-Frank provisions to prohibit them,” he said.
That’s the good news, Roe said.
Enron allowed its chief financial officer, Andrew Fastow, to set up a fund called LJM and engage in suspect deals that made Enron’s books look better, Levin said. The company collapsed in a matter of months as the media and the public became aware of its faulty accounting and business practices.
Before the bankruptcy of WorldCom in 2002, Enron’s bankruptcy was the largest in U.S. Skilling was alleged to have dumped $15.5 million in Enron stock in an insider trade more than two months before the company declared bankruptcy. Preferred stockholders get preferred treatment
“After Enron, we could have, but didn’t, take the opportunity to re-think what’s the core of what’s economically valuable in managing risk in the derivatives business and financing firms via repos and special purpose vehicles,” Roe said. In Enron, and more recent cases like GM and Lehman, this really seemed to surprise some investors. “And they could do this and make a fortune, and no one could copy it? How was it shown on their financial statements?”
Weiss said the same could be said of the Dodd-Frank Act, or Obama’s healthcare plan.
“Some people like them a lot, but they’re just so complex. Today banks have refused to devalue their troubled assets, say some economists.
1. But we still built, and we’re still building, too many fragile financial structures that fail too often.”
“The basic answer is that a common shareholder only gets paid if everyone else has been paid,” he said. Important names make mistakes too
First, Weiss said, the cash flows did not match the profits even after many years which should have raised a red flag. Lawyers, bankers, auditors and many employees saw stuff that they knew was wrong or was suspicious and said little or nothing. Obviously this is a problem in all bankruptcy cases, but it is especially acute in a situation where a big, well-known company fails will little warning.”
Elkind said companies must clearly disclose the risks they are taking and regulators need to require them to do so.
Examples include Bear Stearns and Lehman Brothers in the run-up to the financial crisis and MF Global’s implosion just recently, he said.
“One of the things most people forget about Enron, it wasn’t an outlier,” he said, explaining that it engaged in risky activities with venerated banks.
“For Enron, the firm was growing at a fantastic rate and the question was how were they doing it? The answer, one knows with hindsight, was they were committing massive fraud,” he said. Okay, but how did these people create the wealth? What exactly were they doing? Trading energy, trading weather futures, trading broadband,” he said. Next, it was difficult if not impossible to understand exactly how the firm made money.
The company’s 20,000 employees lost not only their jobs and medical insurance but retirement savings in company stock. Carl Levin, D-Mich., chairman of the permanent subcommittee on investigations which reported on the role of Enron’s board and investment banks’ response to lessons learned from Enron, said the Enron scandal did not put an end to corporate malfeasance..
Once the darling of Wall Street, Enron was the country’s seventh-largest company with a soaring stock price that grew more than 100 percent in 2000.
“If it looks too good to be true it probably is, or people’s inherent greed often gets the better of their judgment,” he said.
3. In the years after Enron was exposed, companies like Goldman Sachs and Citibank set up synthetic CDOs, sold shares in them to clients, and then made money betting against their own clients.
If you increase capital requirements for financial institutions, you decrease risk, Elkind said