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5 Companies That Had A Rough Week

For the week ending Feb. 15, CRN looks at IT companies that were unfortunate, unsuccessful or just didn't make good decisions.

The Week Ending Feb. 15

Topping this week's roundup of those having a rough week is Cognizant, which is paying a $25 million fine in a foreign bribery case and saw two of its former executives indicted on criminal charges.

Also making the list this week are Facebook, which is reportedly facing a massive, multibillion-dollar FTC fine for its data privacy practices; Amazon for losing its "Top Internet Company" position in a key report; a serious cyberattack against VFEmail that destroyed nearly 20 years of email data; and, on the week of Valentine's Day, a reported bug in the OkCupid dating app.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.


Cognizant Fined $25M In Bribery Case As Two Former Execs Indicted

Cognizant has agreed to pay a $25 million fine to settle bribery charges while two former top executives who allegedly arranged the deal were indicted this week on federal criminal charges of conspiracy to violate anti-bribery laws.

The charges and fine stem from 2014 when senior Indian government officials allegedly demanded a $2 million bribe from the construction company building Cognizant's corporate campus in Chennai, India.

Gordon Coburn, Cognizant's president at the time, and Chief Legal Officer Steven E. Schwartz authorized the contractor to pay the bribe, the U.S. Securities and Exchange Commission said in a statement. Coburn and Schwartz, who both stepped down from their posts in 2016, have been indicted on criminal foreign bribery charges.

Cognizant agreed to pay the $25 million fine to settle civil allegations that it violated the Foreign Corrupt Practices Act.


Amazon Dethroned As Top U.S. Internet Company: Report is no longer the top U.S. Internet company, surpassed by Google owner Alphabet, concludes a report from New York investment bank Citigroup. Amazon was moved down from the No. 1 spot to No. 4, behind Alphabet, Netflix and Facebook.

The ranking is based on a number of financial metrics including stock valuation and stock buybacks, as well as expected momentum this year in revenue and profit margin growth. Amazon's downgrade was prompted by slowing growth in advertising dollars and retail sales in North America.

Also cited in the Citigroup ranking were new prohibitive e-commerce regulations in India that could hinder Amazon's growth in that country and the distractions around the company's abandoned plans to build an "HQ2" in New York City and CEO Jeff Bezo's extortion allegations against the National Enquirer.


Facebook Could Be Hit With Multibillion-Dollar Fine For Cambridge Analytica Data Scandal

Facebook is in negotiations with the Federal Trade Commission to reach a settlement – including a massive multibillion-dollar fine – over Cambridge Analytica's improper use of Facebook user data.

The potential fine could be the largest ever levied by the FTC.

The settlement talks, first reported by The Washington Post Thursday, said the negotiations involve Facebook's data privacy practices and Cambridge Analytica's access to – and use of – data from 87 million Facebook users in violation of a 2011 data privacy consent decree between the social media giant and the FTC.


VFEmail Hit By Catastrophic Hack, Years Of Data Destroyed

Email hosting company VFEmail was attacked by a hacker and suffered what the company called "catastrophic destruction" of its servers and potentially the loss of more than 18 years of customers' emails.

The VFEmail site posted an alert on its home page Monday saying the company had "suffered catastrophic destruction at the hands of a hacker" and that "this person has destroyed all data in the U.S., both primary and backup systems."

The alert added that the company was "working to recover what data we can," but the Krebs on Security website quoted VFEmail owner Rick Romero as saying he feared all mail for U.S. users, going back to the company's 2001 founding, was likely lost for good.


Critical OkCupid Bug Exposes Daters’ Data To Application Takeovers

A critical flaw in the OkCupid dating application could allow an attacker to steal a user's credentials, launch man-in-the-middle attacks or compromise a user's application, according to a ThreatPost report.

The vulnerability, reported during the week of Valentine's Day, no less, is in the Android version of the OkCupid application. Attackers could exploit the bug to monitor the application's usage, read all messages and track a user's geographic location, Threatpost said. Hackers could even send daters malicious links with self-replicating malware.

The discovered flaw is separate from reports earlier in the week in which some OkCupid users said their accounts had been compromised – reports that OkCupid has denied.

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