T-Mobile Will Pay $200 Million To Settle Sprint's Alleged Lifeline Abuse (engadget.com) 5
T-Mobile is paying the price for the reported misdeeds of its recent acquisition. From a report: The carrier has agreed to pay a $200 million settlement over FCC allegations Sprint abused the Lifeline program for low-income communications, claiming subsidies for 885,000 customers that weren't using the initiative. The agreement also requires that T-Mobile honor the rules of a consent decree.The provider has to reform company procedures and training to ensure that it only makes legitimate Lifeline claims. A senior manager has to ensure T-Mobile complies with the order, and the company has to submit periodic reports for three years after the start of the decree.
Do your research before buying out. (Score:1)
We have had a few high profile mergers and buyouts of companies. That Ended up causing a big loss. Because the company they bought wasn't quite up to snuff with Ethical Business Practices.
I am not saying T-Mobile is an ethical business, But if you are going to buy a company you should do the following.
1. Make sure it is running by the books
2. It has a product to sell
3. Said product actually works.
Would have been better to split it up (Score:1)
Breaking up Sprint into multiple companies, then purchasing the parts they want would have made more sense in hindsight. Leaving a little company behind purely on paper with the name Sprint to hold the liability and let it default on its debts and legal obligations.
How could we have know they played dirty tricks? Well it's simple, if a company is large and successful you have to kind of assume that someone is going to come after them for their shady past.
Not the first time this BS happens (Score:3)
When Toshiba bought Westinghouse's nuclear division it was hiding massive debt from all the delays in constructing US nuclear reactors.
The debt only surface a couple years after the acquisition. The result? Toshiba had to sell off their crown jewels, the NAND division, and the Westinghouse nuclear division was sold again to American investors, while Toshiba was stiffed with the debt.
What the difference of fine vs profit from fraud? (Score:2)
1. Corporation does fraudulent thing and makes 500 million (not the real number, I made this up, couldn't find the real number)
2. Government finds out about fraud
3. Corporation says oops our bad we didn't mean to do fraud
4. Lawyers hash out deal
5. Government settles for 200 million fine instead of lengthy court battles
6. Corporation doesn't have to admit wrongdoing and profits 300 million from fraud
7. Goto step 1