Bonum Certa Men Certa

The SEC is Going After Microsoft (Again), Not Just Goldman Sachs

US Securities and Exchange Commission Seal



Summary: The SEC (U.S. Securities and Exchange Commission) contacts Steve Ballmer regarding oddities in Microsoft's latest financial report

WE WISH to begin with factual background that a lot of people are unaware of. A few months ago, right around the time that Microsoft's CFO quit he was also paid millions of dollars by Microsoft to keep his mouth shut. This is not a standard transaction. This could indicate malpractice and there is reason for prejudice because the SEC previously caught and investigated Microsoft for financial fraud (Microsoft eventually settled), after a Microsoft employee, Charles Pancerzewski, had blown the whistle and presented to the judge convincing evidence of fraud taking place at Microsoft. Microsoft paid Pancerzewski millions of dollars to shut him up and eliminate his evidence [1, 2]. It's a typical maneuver from Microsoft, which also hires/pays critics to walk away and not share their knowledge with the public. We gave several examples of this before.



A few days ago we wrote about Microsoft's close relationship with US banks/the Fed, which are aflood with misconduct these days. They contact Microsoft for help brainwashing the public [1, 2, 3, 4, 5, 6, 7, 8, 9], as we noted some days ago when we wrote about the SEC suing Goldman Sachs for fraud. For those who have not read that previous post, Microsoft's CEO was asked to create a seasonly game to teach the public about deficit crunching (Microsoft too has debt) and as this new article shows, using games to brainwash minds is not out of the ordinary (war games are the most famous example).

PepsiCo International and Microsoft have teamed up to create an integrated digital advergaming campaign to take advantage of what's expected to be increasing interest in soccer as the World Cup gets underway.


But anyway, here is the interesting development. Pogson has found this document [PDF] buried inside the SEC's Web site. Since it is available as a PDF, we decided to append it at the bottom as plain text. Microsoft's response is an HTML-formatted mail and here is what Pogson makes of it:

Then, in the last quarterly report, M$ combined that other OS and “live” segments. I guess they thought a zigzag in the curve would hide something like the inflection in the client OS stuff. Further, internally, they use a different set of books, omitting some important details. So, investors should be comforted knowing that internal decisions are made on false assumptions. We have known for years that including the browser in the OS was done not for good business reasons but to exclude competition from the market. I guess that other search engine is more of the same.


There is actually more to it because Microsoft is 'embellishing' its numbers by deferring revenue, for example [1, 2, 3, 4]. One writer asks about Microsoft: "Are we seeing a revival?" Well, only if Microsoft's lies are being believed because in the previous quarter just about any business unit at Microsoft was down. Yes, it was mostly down, but Microsoft claims a surge.

Let me be clear. I'm not a fan of Microsoft (NASDAQ:MSFT). I dislike its products and I don't much like its business policies. I'm a child of the open source world and a fan of cloud computing, and Microsoft has long been a dirty word as far as I'm concerned. It's probably a dirty word as far as many investors are concerned.


Wallstcheatsheet.com, which is another news site, has just published the article "Proof Microsoft has Become Irrelevant" and it says:

If this keeps up [for Bing] , Microsoft may want to rename it ‘Ding’ because that’s how big an impact they’ve had in the search space.

For the moment, Kin and Bing are not making huge waves.


We wrote about it in the previous post. Bing as a "success" is part of an illusion Microsoft is spreading and Kin is a major disappointment which we'll address in the next post. There is more to Microsoft's financial reports than meets the eye. Don't believe what you see next week when Microsoft releases another report and immediately spins it as "success". Microsoft is not honest about its financial situation.







Mail Stop 4561 December 11, 2009 Mr. Steven A. Ballmer Director and Chief Executive Officer Microsoft Corporation One Microsoft Way, Redmond, Washington 98052-6399

Re: Microsoft Corporation Form 10-K for the Fiscal Year Ended June 30, 2009 Filed July 30, 2009 01-14278

Dear Mr. Ballmer: We have reviewed the above-referenced filing and have the following comments. Please be as detailed as necessary in your explanation. After reviewing this information, we may raise additional comments.

Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. Form 10-K for the Fiscal Year Ended June 30, 2009 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Segment Product Revenue/Operating Income (Loss) Online Services Business, page 25

1. We note that the operating loss for your Online Services Business increased by 102% and 84% in 2008 and 2009, respectively, and is a significant portion of your




Mr. Steven Ballmer Microsoft Corporation December 11, 2009 Page 2

consolidated operating income in 2009. Tell us whether these increasing losses are indicative of future results and the consideration given to identifying and quantifying any related known trends, events and uncertainties that would reasonably be expected to have a material impact on your liquidity, capital resources and/or results of operations. Refer to Item 303(A) (3) (ii) of Regulation S-K and Section III.B.3 of SEC Release 34-48960.

Item 8. Financial Statements and Supplementary Data

Note 22. Segment Information and Geographic Data, page 77

2. Tell us what consideration you gave to reporting revenue from external customers for each of your products and services or each group of similar product and services in accordance with paragraph 37 of SFAS 131.

3. You indicate that your financial reporting systems provide more than one measure of segment profit and loss for management to operate the business, including internal profit and loss statements prepared on a basis not consistent with U.S. GAAP. Tell us what consideration you gave to reporting the segment information that is most consistent with that used in your consolidated financial statements. In this regard, we note that the segment information provided beginning on page 23 is presented in accordance with U.S. GAAP. Refer to paragraph 30 of SFAS 131.

4. We note your statement that segments are not designed to measure operating income or loss directly related to the products included in each segment, due to your integrated business structure. Further explain this assertion and tell us what operating costs are excluded from each segment. In light of this apparent limitation of the data, indicate how the segment information presented is reliable and relevant to users of your financial statements.

5. You state that “inter-segment cost commissions are estimated by management and used to compensate or charge each segment for such shared costs and to incent shared efforts.” Clarify for us what is meant by these estimated inter-segment cost commissions and tell us what consideration you gave to describing in the note the basis of measuring this allocation. Also, clarify what is meant by allocating cost commission “to incent shared efforts.” Explain your basis for determining the appropriate amounts that will provide motivation and justify why management believes the allocation methodology is reasonable. Refer to paragraphs 25(b) and 29 of SFAS 131. *******

Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please submit all correspondence and supplemental




Mr. Steven Ballmer Microsoft Corporation December 11, 2009 Page 3

materials on EDGAR as required by Rule 101 of Regulation S-T. If you amend your filing, you may wish to provide us with marked copies of any amendment to expedite our review. Please furnish a cover letter that keys your response to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing any amendment and your response to our comments.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

● the company is responsible for the adequacy and accuracy of the disclosure in the filing;

● staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

● the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Corporation Finance in our review of your filing or in response to our comments on your filing.

You may contact Melissa Walsh, Staff Accountant, at (202) 551-3224 if you have any questions regarding comments on the financial statements and related matters. If you need further assistance, you may contact me at (202) 551-3226

Sincerely,

Craig D. Wilson Sr. Asst. Chief Accountant


Comments

Recent Techrights' Posts

Slopwatch: LinuxSecurity, UbuntuPIT, and Google News
We've also just noticed more slop from UbuntuPIT
Microsoft Windows is No Longer an Operating System, It's Surveillance Project
Why is this even legal to preload on PCs outside the US?
Qualcomm Arduino Takes Aim at Raspberry Pi
Qualcomm is a Microsoft partner
 
Upgraded R.R.R.R.R.R. Today
The Web of 2025 is full of garbage, not limited to slopfarms
Freedom From Proprietary Prisons
Forking always an option
IBM's Watson Died in 1956, Now Watson Dies Again
IBM is becoming just a reseller of GAFAM and other stuff
Microsoft Says That Constant Mass Layoffs Are Success, the Media Isn't Buying This Microsoft Narrative Anymore
If people in the media feel an obligation to repeat whatever lies Microsoft tells, what point will there be to the media?
Links 08/10/2025: "Mali Puts Free Speech on Trial" And Apple Enforces Dictatorship
Links for the day
Links 08/10/2025: ‘Death to Spotify’ and Law to Ban Loud Commercials on Streaming (Dis)Services
Links for the day
Links 08/10/2025: Real Innovation and Nina.chat is Dead
Links for the day
Links 08/10/2025: Y2K38 Bug is a Vulnerability, Chat Control in Europe a Threat
Links for the day
How and Why Once-Legitimate Sites Turn Into Slopfarms
Many sites will go offline and many social control networks will shut down once they realise or even openly admit they spend money and time gardening a bunch of bots and slop
UbuntuPIT Became a Slopfarm and Gnoppix Tarnishes Its Own Brand With Slop
It fits all the characteristics of mildly-edited (if at all) slop
Slopwatch: Linux Journal and Other Slopfarms
GAFAM needs to go the way of the dodo
Gemini Links 08/10/2025: "Seek Seek Revolution" and Gradient Backgrounds
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, October 07, 2025
IRC logs for Tuesday, October 07, 2025
Stagnation of the Economy and What Free Software Can (or Could) Do For It
If your economic model is based on a pyramid of lies, it won't last very long
Social Control Media is Sinking
it would rightly seem like the era of centralised "social" sites (they're not social, they're about controlling the users) is ending, not overnight but gradually
Participation in Cancel Culture Detrimental to One's Career
A cautionary tale
Passion Wins
we've increased the number of birds we feed to 100+
How Solderpunk and Sean Conner Started Gemini Protocol (and, Collectively, Geminispace) Back in 2019
Based on the "official" history
Arduino is Now a Patent Bully (Qualcomm)
Qualcomm has just bought Arduino
Many Years of Microsoft Cancellations and Faked (Acquired) Revenue "Growth"
XBox is basically the "next Skype"
The Comment TheLayoff.com Has Just Censored for Criticising a Ridiculous Puff Piece of IBM Management
If comments get censored for their "style" rather than their substance, then society will be worse off
The Power of Writing Down Facts
The more we write and publish, the more people will know what happened
Microsoft's Non-Denying Denial About XBox's Death is Already Being Shattered to Pieces
Like Microsoft's 'open' 'hey hi', heralding meaningless non-committing agreements with AMD is little more than vapourware
Slopwatch: UbuntuPIT Joins the Slopfarms Club
Slopfarms gonna slop
Links 07/10/2025: Privacy at Risk, GAFAM Remains Off the Hook
Links for the day
Gemini Links 07/10/2025: Modern Retro Console Idea and Batch vs Bash
Links for the day
Links 07/10/2025: International Criminal Court (ICC) Convicts Ali Kushayb; Moroccan Imprisoned for 'Offensive' Shirt
Links for the day
Links 07/10/2025: EU' Chat Control is Back, US Cracks Down on Democracy
Links for the day
Techrights Pursues Justice and Truth Because, Without Those, Society Descends Into Chaos
most people reject dogma and pseudoscience
Upcoming Talks by Richard Stallman in Helsinki, Göteborg, and Rome
Join with him and share the software
Something Bad is Happening in the Open Source Initiative (OSI)
The latest OSI blog post is from a Microsoft operative and a few weeks ago the Executive Director left
TLS 1.3 Dominates Geminispace (99% of Known Capsules)
it's nowadays safe to assume almost every capsule can handle TLS 1.3
Why soylentnews.org Has Been Having Technical Difficulties Lately
The network has been going up and down quite a lot this past week
A Statement Against Violence
The facts are on our side
They've Run Out of Things to Rebrand or Label as "AI"
The next few years will be interesting because if Microsoft lays off tens of thousands of workers each year, there won't be much left except mountains of debt and dying brands
The Register MS is Still Being Paid to Participate in the "AI" Ponzi Scheme Which Will Crash the Economy
The Register MS is hoping to get lucky by tricking people into a scam
Richard Stallman Confirms His Talk in Göteborg This Coming Friday
"The hosts say that the list will not be given to the state"
Most of the "Linux" Results This Morning in Google News Are LLM Slop From the Same Slopfarm, Plagiarising Phoronix
The main question is, does Google even care at this point?
Gemini Links 07/10/2025: Civil War and "Goodbye Web"
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, October 06, 2025
IRC logs for Monday, October 06, 2025
Evidence Contradicting Microsoft's Non-Denying Denials and Expectation of Many Layoffs Soon
"Microsoft has had this constant drip of layoffs for months."
The "AI Revolution" is Going Very Well, Right?
money that does not exist and alleged potential that is pure fiction
Links 06/10/2025: Scam Altman Himself Admits He Runs a Scam Based on a Bubble, US Administration Adopts “War From Within” Narrative to Crush Opposition/Dissent
Links for the day
Slopwatch: Fake Ubuntu 'Articles' and Google News Helps People Who Plagiarise Phoronix Using LLMs
Michael Larabel can't possibly be happy about that
6,000 Pages/Articles a Year
Today in one month from now the site turns 19
When Things Become So Ubiquitous That They're Almost Nameless
The notion or the concept of software freedom isn't tied to any particular brand or project, so it should still resonate
At Least 3 Richard Stallman Talks in Europe Confirmed So Far, Next Week in Rome There's Another
Dr. Stallman has not announced this yet
IDG Seems to Have Abandoned Sandra Henry Stocker's UNIX/Linux Column
Unless we hear otherwise or see some update/s, this may mark another death blow from IDG
Gemini Links 06/10/2025: Winter Nights and "Virtue Signaling"
Links for the day
Links 06/10/2025: Scientific Awards and Typhoon Matmo
Links for the day
IP Kat Gone Bonkers, Pushing Slop in Patents (Likely Illegal, With Severe Consequences)
AstraZenecaKat: "Last time, this Kat covered some practical steps on how to ensure client confidentiality when using AI tools (IPKat)."
Links 06/10/2025: Grokipedia as Malicious Slop, US 'Martial Law' a "New Normal"
Links for the day
Fake Economics and Clown Computing Circuses
who's gonna pay for these scams?
Nobel Prize in Economics Does Not Exist, It's Propaganda From Sveriges Riksbank
"It is that time of the year when it is important to remind people that there are no Nobel Prizes for professional wrestling, astrology, or economics"
Rust is Eating Linux
That's a recipe for problems
Cindy Cohn (Executive Director of EFF) is a Millionaire, Earned Almost $30,000 Per Month Before Departing While the EFF Lost Money
EFF is "Big Business"
Non-Denying Denial From Microsoft (Again) Regarding the End of XBox Consoles
It's kind of hilarious that even the site chosen by Microsoft to relay its BS, based on past loyalty, isn't quite buying it
Bringing Back Lost Articles From the 1990s: Microsoft Products Leave Door Open to NSA
Nothing has changed since then
When the Slop Bubble Pops People Will Say Richard Stallman Was Right (Again)
What was once known as Computer Science turned into "IT"
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, October 05, 2025
IRC logs for Sunday, October 05, 2025
Links 06/10/2025: Science, Hardware, and Andrej Babis Making a Comeback
Links for the day