Entr510: Case Study: Joe Costello
Student Name
Keller School of Management
Date
ENTR510
Part A
What is your opinion of the behavior of the following actors
Joe Costello: Joe Costello was the CEO of the Cadence Design System during the great Silicon Valley intellectual property theft. Joe constantly fought the critical against the Avant to seek justice and finally he got it. During this complete prosecution phase he faced many hurdle and criticism from the industry leaders and from customers as well. He ignored all those criticism and faced the hurdle effectively and got justice for the wellness of the Cadence Design System, which again created the very good reputation of it in the market. Joe …show more content…
seems to be very dedicated to his work and having very good ethical values and was totally against the unethical act of any one. He continued his struggle against the Intellectual theft until he got the justice for his company. As media houses and industry leader criticized him and his board customer and friends urged him to leave the case but still he didn’t stopped his fight. Vice president of Avant blamed him that he is attacking him personally but he didn’t care about any criticism and finally proved that he was right. Finally Cadence design got the huge amount of $460 million just because of dedication and determination of Joe Costello.
Gerry Hsu: Gerry Hsu was the CEO of the Avant. With 6 former employee of the Cadence, he started the Avant. This person was involved in the great conspiracy against the Cadence by stealing the source code from the Cadence. Gerry was the victim of that offence by still he was blaming the Costello that he is attacking me personally and was claiming that Avant products are better than the Cadence. But finally he convicted by the court and got the 7 years of prison and civil lawsuit. Even though Avant was the public company but still he was operating it like a sole proprietorship. He always used to put his family member as the payroll employee with huge salary. He has also invested on many companies. So totally he was selfish and dishonest person and resulted in the great tread-theft and persuaded others to do that also.
Former Cadence employees that went over to Avant: All Cadence employees who went to the Avant were the part of great conspiracy against the Cadence. Every one breached the confidentiality agreement of the employer and stolen complete product code. Just because of stolen code Avant become the more than $1 billon organization, all six person breached the integrity just to earn money. Finally 6 former Cadence employees convicted by the court and got 7 years of prison. All 6 collectively created the history in the Silicon Valley by great trade-theft.
Customers and potential customers of Cadence and Avant: Before the final investigation and court judgment, the entire customer did not believe that Costello claims that Avant is using the stolen source code in their product.
Customers were satisfied with the Avant products. Customers were also blaming the Costello that he is wasting everyone’s times. One of Cadence customer saying that- “If Joe is right, this would make an example of someone who went over and didn’t come back” and that proved right at the end of this case. Before the final decision normal customer were criticizing the Costello for wasting the time and taking the Avant fight …show more content…
personally. After the final decision when 6 Avant managers convicted for the trade-safety theft. Customer perception changed and decided not to buy any product from the Avant. So it show that customer were taking very quick decision either it was criticism of Costello or leaving the Avant as their vendor for the design products.
Avant!’s auditors: External auditors who was auditing the Avant was seems very effective and they found many irregularity in the Avant. They ware doing the good work, which comes positive for the Cadence. External Auditors found incomplete and missing contract documentation and inadequate information about the recording of the revenue. Auditor found many mistakes, which include the lack of, timely and accurate account reconciliations in a number of areas, including cash, unbilled accounts receivable, prepaid commissions, and investments in affiliates. So Auditor did their job transparently and represented the clear picture of the Avant financial practices.
Avant!’s lawyers: Avant’s lawyer seen the things in other ways and they sere insisting that Avant never used the stolen code from the Cadence. But they were wrong because one unintentionally left bug in the product was also present in the Avant Products. So all these circumstances were showing that Avant’s lawyer were wrong and were given their service to the wrong person or company whose foundation was started with the trade-theft, intellectual property theft.
The prosecutors: The prosecutors started the case hearing on May 14, 2001 and were very persistent and heard every thing from both side and given the best judgment what they can give. Prosecutor rejects the plea of all 6 Avant’s manager and given them the 7 year of prison. The tactics used by the Avant managers and lawyer to stall the case did not misguide prosecutor. Finally prosecutors had given the decision in the favor of Cadence, which was the great victory by the Cadence against the trade-theft.
What is the responsibility of the venture capitalist(s) who funded ArcSys (Avant!)?
“If the company is already selling a product, the prospective venture investor will want to talk with current customers as well as prospects” (DOTZLER, 2001). So for the venture capitalist, it is important to look at the current situation of the all the pending cases against the company. Capitalist must have to look at the every aspect of the company about his business procedure, technology used and product being selling. But when IPO of the Avant was launched in the June1995, Avant got the $31 dollar of investment from the venture capitalist. After that Avant become unstoppable and done 13-acquisition of $230 million. Venture capitalist invested on the Avant when there was serious investigation was in progress against the Avant. But Hsu assured them that all the charged against them are bogus so venture capitalist got persuaded and invested very much. After the Avant become the more than $1 dollar company. So before investing, it is required that have a deep analysis about the current status of the company and its business, technology and products. “An ideal background which would enable one to evaluate products and technologies would be technical training and work experience in an operating company in engineering, science, or clinical affair” (DOTZLER, 2001). So before investment background verification is very necessary to invest in right place with right peoples.
What is the responsibility of the underwriter who handled ArcSys/Avant!’s IPO?
Underwrite is actually an organization who take all the responsibly for the deciding quantity and pricing of the shares. Underwriter also takes the responsibility to arrange the investors also so that maximum shares can be sold. So underwriter who handled Avant IPO launching is also responsible for such big blunted case. Due to IPO’s launch Avant got the huge investment from the Venture capitalist after which Avant given the tough competition to Cadence and Synopsys Inc. So Under write are also responsible for the expansion of such a devil in the Silicon Valley who cheated the customer with the copied code and trade-theft, intellectual property theft because in investigation storage devices were found which was containing the source code of the Cadence.
Evaluate Avant!’s board of directors
Board of director Avant seems that they are preventive measure to save them from any controversy because when in 1995, Hsu asked the board of director to reconsider hiring Igusa but they refused for it and saying that they can not allow anyone what is facing the criminal investigation and after some time in police got the hard drive filled with Cadence source code. So I think that decision of Board of director was right. But company base was founded with that kind of theft itself. Hsu was very convincing person and convinced the Board of directors and that all the case s against him are bogus and baseless. Board of directors was always generous to Hsu. Hsu act like putting his close friends and the Board of directors also ignored family member in the top position and paying very salary. So in this case it seems that every thing as running with the mutual consent of Hsu and remaining board of directors.
Should there be a corporate death penalty as Dan Gillmor proposed?
“The Sentencing Guidelines also provide for a “death penalty” for organizations whose primary purpose is criminal.
The Guidelines implement this death penalty by setting a fine “sufficient to divest the organization of all its net assets” (Noonan, 2012). So in united state there is provision if any company is doing criminal activity then its penalty can be the death penalty. From all the investigation by the CBI and police it is clear that foundation of Avant was the fraud, theft, trade-theft, persuading other to do theft for shake of some money. To retain in the market and to earn money Avant did the fraud where they can. For example they persuaded the “Igusa” to steal the area-based program and later on launched it over night. So what they did was not acceptable at any cost. I think that for the rise of Avant every body was responsible including investors, IPO under writer and shareholder. So I strongly believe that, for such kind of unacceptable offence death penalty should be the appropriate punishment. Shareholders and investors should get their money by selling Avant and rest of the amount should be paid the Cadence for the loss they occurred due to
Avant.
Part B
What could Cadence have done to better protect its intellectual property?
It is very difficult to come up with internal intellectual property fraud. But still some corrective measure could have taken to prevent the intellectual property fraud at the Cadence. As we can see that all the fraud were taken by transferring the source code into some hard drives. So any organization must ensure that no data would be transferred to any physical storage. So if At that Cadence had implemented the secure IT policies that all the port for the data transfer would be disabled and any external device can not be identified by the computer system. So it had not been possible to transfer the data in the hard drive what Avant guys done on their last days. So if any data need to be transferred then they need some special privilege from the network administrator so that if any body want to transfer any thing then it firstly request to network administrator then after analyzing the reason why it is required, network administrator can do that for that particular employee. “First, they can always consider the role of best practices and established standards in defending against insider attack” (CERT, 2011). Organization should use the logging of the network activities so that some analytical activity can be performed on that to guess the future action by the insider fraudulent activity.
References
Theft of Intellectual Property and Tips for Prevention (The CERT Division). Retrieved from http://www.cert.org/blogs/insider-threat/post.cfm?EntryID=75
DOTZLER, F. (2001). What Do Venture Capitalists Really Do, and Where Do They
Learn to Do It? THE JOURNAL OF PRIVATEEQUITY.
Noonan, K. (2012). The Case for a Federal Corporate Charter Revocation Penalty. 80(2).
Bygrave, William D. Entrepreneurship, 2nd Edition. John Wiley & Sons, 2012. VitalBook file. Bookshelf.
Keller School of Management
Date
ENTR510
Part A
What is your opinion of the behavior of the following actors
Joe Costello: Joe Costello was the CEO of the Cadence Design System during the great Silicon Valley intellectual property theft. Joe constantly fought the critical against the Avant to seek justice and finally he got it. During this complete prosecution phase he faced many hurdle and criticism from the industry leaders and from customers as well. He ignored all those criticism and faced the hurdle effectively and got justice for the wellness of the Cadence Design System, which again created the very good reputation of it in the market. Joe …show more content…
seems to be very dedicated to his work and having very good ethical values and was totally against the unethical act of any one. He continued his struggle against the Intellectual theft until he got the justice for his company. As media houses and industry leader criticized him and his board customer and friends urged him to leave the case but still he didn’t stopped his fight. Vice president of Avant blamed him that he is attacking him personally but he didn’t care about any criticism and finally proved that he was right. Finally Cadence design got the huge amount of $460 million just because of dedication and determination of Joe Costello.
Gerry Hsu: Gerry Hsu was the CEO of the Avant. With 6 former employee of the Cadence, he started the Avant. This person was involved in the great conspiracy against the Cadence by stealing the source code from the Cadence. Gerry was the victim of that offence by still he was blaming the Costello that he is attacking me personally and was claiming that Avant products are better than the Cadence. But finally he convicted by the court and got the 7 years of prison and civil lawsuit. Even though Avant was the public company but still he was operating it like a sole proprietorship. He always used to put his family member as the payroll employee with huge salary. He has also invested on many companies. So totally he was selfish and dishonest person and resulted in the great tread-theft and persuaded others to do that also.
Former Cadence employees that went over to Avant: All Cadence employees who went to the Avant were the part of great conspiracy against the Cadence. Every one breached the confidentiality agreement of the employer and stolen complete product code. Just because of stolen code Avant become the more than $1 billon organization, all six person breached the integrity just to earn money. Finally 6 former Cadence employees convicted by the court and got 7 years of prison. All 6 collectively created the history in the Silicon Valley by great trade-theft.
Customers and potential customers of Cadence and Avant: Before the final investigation and court judgment, the entire customer did not believe that Costello claims that Avant is using the stolen source code in their product.
Customers were satisfied with the Avant products. Customers were also blaming the Costello that he is wasting everyone’s times. One of Cadence customer saying that- “If Joe is right, this would make an example of someone who went over and didn’t come back” and that proved right at the end of this case. Before the final decision normal customer were criticizing the Costello for wasting the time and taking the Avant fight …show more content…
personally. After the final decision when 6 Avant managers convicted for the trade-safety theft. Customer perception changed and decided not to buy any product from the Avant. So it show that customer were taking very quick decision either it was criticism of Costello or leaving the Avant as their vendor for the design products.
Avant!’s auditors: External auditors who was auditing the Avant was seems very effective and they found many irregularity in the Avant. They ware doing the good work, which comes positive for the Cadence. External Auditors found incomplete and missing contract documentation and inadequate information about the recording of the revenue. Auditor found many mistakes, which include the lack of, timely and accurate account reconciliations in a number of areas, including cash, unbilled accounts receivable, prepaid commissions, and investments in affiliates. So Auditor did their job transparently and represented the clear picture of the Avant financial practices.
Avant!’s lawyers: Avant’s lawyer seen the things in other ways and they sere insisting that Avant never used the stolen code from the Cadence. But they were wrong because one unintentionally left bug in the product was also present in the Avant Products. So all these circumstances were showing that Avant’s lawyer were wrong and were given their service to the wrong person or company whose foundation was started with the trade-theft, intellectual property theft.
The prosecutors: The prosecutors started the case hearing on May 14, 2001 and were very persistent and heard every thing from both side and given the best judgment what they can give. Prosecutor rejects the plea of all 6 Avant’s manager and given them the 7 year of prison. The tactics used by the Avant managers and lawyer to stall the case did not misguide prosecutor. Finally prosecutors had given the decision in the favor of Cadence, which was the great victory by the Cadence against the trade-theft.
What is the responsibility of the venture capitalist(s) who funded ArcSys (Avant!)?
“If the company is already selling a product, the prospective venture investor will want to talk with current customers as well as prospects” (DOTZLER, 2001). So for the venture capitalist, it is important to look at the current situation of the all the pending cases against the company. Capitalist must have to look at the every aspect of the company about his business procedure, technology used and product being selling. But when IPO of the Avant was launched in the June1995, Avant got the $31 dollar of investment from the venture capitalist. After that Avant become unstoppable and done 13-acquisition of $230 million. Venture capitalist invested on the Avant when there was serious investigation was in progress against the Avant. But Hsu assured them that all the charged against them are bogus so venture capitalist got persuaded and invested very much. After the Avant become the more than $1 dollar company. So before investing, it is required that have a deep analysis about the current status of the company and its business, technology and products. “An ideal background which would enable one to evaluate products and technologies would be technical training and work experience in an operating company in engineering, science, or clinical affair” (DOTZLER, 2001). So before investment background verification is very necessary to invest in right place with right peoples.
What is the responsibility of the underwriter who handled ArcSys/Avant!’s IPO?
Underwrite is actually an organization who take all the responsibly for the deciding quantity and pricing of the shares. Underwriter also takes the responsibility to arrange the investors also so that maximum shares can be sold. So underwriter who handled Avant IPO launching is also responsible for such big blunted case. Due to IPO’s launch Avant got the huge investment from the Venture capitalist after which Avant given the tough competition to Cadence and Synopsys Inc. So Under write are also responsible for the expansion of such a devil in the Silicon Valley who cheated the customer with the copied code and trade-theft, intellectual property theft because in investigation storage devices were found which was containing the source code of the Cadence.
Evaluate Avant!’s board of directors
Board of director Avant seems that they are preventive measure to save them from any controversy because when in 1995, Hsu asked the board of director to reconsider hiring Igusa but they refused for it and saying that they can not allow anyone what is facing the criminal investigation and after some time in police got the hard drive filled with Cadence source code. So I think that decision of Board of director was right. But company base was founded with that kind of theft itself. Hsu was very convincing person and convinced the Board of directors and that all the case s against him are bogus and baseless. Board of directors was always generous to Hsu. Hsu act like putting his close friends and the Board of directors also ignored family member in the top position and paying very salary. So in this case it seems that every thing as running with the mutual consent of Hsu and remaining board of directors.
Should there be a corporate death penalty as Dan Gillmor proposed?
“The Sentencing Guidelines also provide for a “death penalty” for organizations whose primary purpose is criminal.
The Guidelines implement this death penalty by setting a fine “sufficient to divest the organization of all its net assets” (Noonan, 2012). So in united state there is provision if any company is doing criminal activity then its penalty can be the death penalty. From all the investigation by the CBI and police it is clear that foundation of Avant was the fraud, theft, trade-theft, persuading other to do theft for shake of some money. To retain in the market and to earn money Avant did the fraud where they can. For example they persuaded the “Igusa” to steal the area-based program and later on launched it over night. So what they did was not acceptable at any cost. I think that for the rise of Avant every body was responsible including investors, IPO under writer and shareholder. So I strongly believe that, for such kind of unacceptable offence death penalty should be the appropriate punishment. Shareholders and investors should get their money by selling Avant and rest of the amount should be paid the Cadence for the loss they occurred due to
Avant.
Part B
What could Cadence have done to better protect its intellectual property?
It is very difficult to come up with internal intellectual property fraud. But still some corrective measure could have taken to prevent the intellectual property fraud at the Cadence. As we can see that all the fraud were taken by transferring the source code into some hard drives. So any organization must ensure that no data would be transferred to any physical storage. So if At that Cadence had implemented the secure IT policies that all the port for the data transfer would be disabled and any external device can not be identified by the computer system. So it had not been possible to transfer the data in the hard drive what Avant guys done on their last days. So if any data need to be transferred then they need some special privilege from the network administrator so that if any body want to transfer any thing then it firstly request to network administrator then after analyzing the reason why it is required, network administrator can do that for that particular employee. “First, they can always consider the role of best practices and established standards in defending against insider attack” (CERT, 2011). Organization should use the logging of the network activities so that some analytical activity can be performed on that to guess the future action by the insider fraudulent activity.
References
Theft of Intellectual Property and Tips for Prevention (The CERT Division). Retrieved from http://www.cert.org/blogs/insider-threat/post.cfm?EntryID=75
DOTZLER, F. (2001). What Do Venture Capitalists Really Do, and Where Do They
Learn to Do It? THE JOURNAL OF PRIVATEEQUITY.
Noonan, K. (2012). The Case for a Federal Corporate Charter Revocation Penalty. 80(2).
Bygrave, William D. Entrepreneurship, 2nd Edition. John Wiley & Sons, 2012. VitalBook file. Bookshelf.