Verizon and J.P. Morgan Class Action Lawsuit for Investment Scam

April 17, 2010

The Latest Class Action suit for SCAM by Verizon & J.P. Morgan.

http://ping.fm/oKCcz

Well, I am sure you will see a few more regarding Paulson shorting Idearc then buying them up out of bankruptcy. Naked short sellers and hedge funds helped drive the company into bankruptcy (although it was pre-planned and Idearc never technically couldn’t afford debt payments.)  Paulson just got caught shorting a company he basically advised and guided. Wall Street bankers are getting bail outs. Goldman Sachs is in trouble and just got served a nice lawsuit. Paulson, who now owns over 17% equity in Verizon Yellow Pages publisher SuperMedia, is also “implicated” in the latest lawsuit regarding Goldman Sachs and investment fraud.

You run around with thieves and crooks…. that makes you a thief and a crook! Scott Klein is learning from the best crooked Wall Street bankers. Just take a look at his latest round of bonuses, stock options, and incentives for “emerging out of bankruptcy” that was created via fraud from Verizon and the same executive team that Scott Klein is now surrounded with. Here are a few more examples of golden parachutes.

Yet SuperMedia employees either agree with me and are labeled as “disgruntled” or are too damn stupid to see fraud when it is right in front of them. Or they are too damn scared to speak up!

visit the forum dedicated to ending the sales and executive fraud at SuperMedia for more discussion!


Idearc Corporate Fraud Begins at Sales Culture

December 28, 2009

How quickly times do change.

Kinda crazy, a few years ago when people said the name “Ron Paul,” more times than not,  people probably thought of:

Also crazy is how quickly things can change. The growth of the Tea Party movement signals one of the greatest changes in my life. Not of the personal sort, but from a cultural perspective.  It appears to me, to some extent, that our opinions as consumers , businessmen, parents, teachers, consultants, employees, and citizens have changed towards corporate America, corporate greed. There is a growing movement towards ethical consumerism. Did your corporation donate money to a lobbyist? This might effect your earnings by patriotic American’s who believe in investing in moral and ethical corporations. Not just from the environmental or green sentiment, but also from that of a political sort. Business owners, like everyone else, are also consumers. They choose where they invest advertising dollars.

Who also recieved the email from Google for the $20 Million “Christmas Gift” to Charities?

Unions want to take corporate profits. Wealth redistribution if you asked me. Unions cater to workers, but who really profits in the unions? When a union is no longer non-profit they too become Crony Capitalists.

Aside from the message about “Card Check” at the end, I really believe this video communicates a growing sentiment in America toward Crony Capitalism.

I don’t believe Congress should pass the Employee Free Choice Act, maybe because I am not that big into unions, considering how bad they managed to screw the direction, profits, and innovations of many of America’s best corporations. Many American corporations are misguided my unions. It is often challenging for a business to sustain “LONGTERM” success with union involvement. Such is the case of GM being held back from innovation by its own employee labor union the UAW.  (My mother, TC Adams,  was a union steward in 1997  while working at the GTE Phone Mart in Garland Tx prior to joining GTE Yellow Pages as a sales consultant. ) GTE, then Verizon, then  Idearc, and now SuperMedia has a challenge working with the CWA Union. At Verizon/Idearc, reps in non-union states are compensated less for advertising sales than those in union organized territories. Cutting into corporate profits? Sure. Offering the company guidance from collecting information directly from clients and media consultants then sharing it  with the companies executives and so called product managers to guide the direction of the organization? Heck No!

(American Greed is a great show btw!)

I’ve always felt that I was paid too much  money just to sell Yellow Pages Advertising. Sell an ad. Move on to the next sell. Sell another. Do some paperwork. Move on the next yellow page ad sale. Man! When I was 20 years old I made over $100,000 selling Yellow Pages for Verizon! (And this was without selling “Fake Yellow Pages Ads to Fill a Phone Book.”) I think that was one of the years I earned one of my numerous Verizon Yellow Page Sales President’s Awards from Kathy Harless, the companies CEO. It was a great career. Up until I started becoming tenured in my job and craving to learn more and more about internet marketing.

Once I quickly recognized that the folks actually doing the work, managing the Google Adwords Campaigns and building the websites, got paid significantly less than those that made the big “SELLS,” it only took me a few years to really grasp what a lack of value Verizon Yellow Pages was really offering for online advertising. That’s when I began studying advanced Search Engine Optimization and Internet advertising methods and strategies.

The corporate sales culture had its flaws, but it was nothing like the direction that Idearc Media is headed, with leadership from Idearc CEO Scott Klein and his circle of crony executives.  As if corporate fraud of the personal sort from executives was not bad enough, they also don’t take accountability for the direction of the company. Ask anyone who heard quarterly earnings calls over the past few years.

If folks knew better they would be looking into Kathy Harless and her dream team of women who apparently thought it was wise to spin the company off with such a debt burden. Idearc paid the price to become a self sustaining organization. Verizon sapped the company dry of cash. Huge profits from Verizon Yellow Pages advertising sales went to fund FIOS and Verizon Wireless ventures. You would want to look into the corporate responsibility as well of Ivan Seidenburg and Verizon directors for FairPoint Communications, Hawaiian Telecom, and Idearc Media’s bankruptcies.

“Audit the Fed!”

If you haven’t been following Ron Paul’s latest movement.

After spending 9 years and 3 months in the Corporate jungle of Yellow Pages Sales from the age of 19 to 28, I want to scream out at the top of my lungs

“Audit Idearc!”

“Audit SuperMedia!”

Let’s look at just one thing that needs auditing in Idearc’s Corporate Sales Culture:

How much do Hispanic Reps in Texas earn vs non hispanic reps.Why do Hispanic Reps get paid higher commissions? Why did Hispanic Reps have lower quotas and earn more money since Verizon/Idearc began publishing Spanish Yellow Pages?

“Sell 4 different geography Solutions/SuperDirect mail drops of Spring vs selling 4 seasonal SuperDirect Mail drops of a single geography deck to keep from being charged back and losing commissions, when the clients doesn’t pay. Then disconnect the pre-paid cell phone that you are having someone answer. “

If this is the kind of advice,  Idearc local sales managers and sales reps believe will contribute to the success of the organization, may Idearc not go bankrupt but cease to exist. Idearc rewards sales. Even sales to illegal immigrants who want to start a business and have zero credit or identification. All you need is an address, business name, and a cell phone.

Quiere empezar un negocio?

Idearc does not reward taking care of the client.They do not reward media consultants for expertise beyond getting a signature on a contract to obligate a client for 12 months worth of billing, regardless of Idearc’s contribution to the success and outcome of the client. Idearc’s sales culture, unlike America’s Small Business Advertising Agencies such as this one,  do not reward results. Idearc does not reward sales based on retention or even receivables. The problem with corporate advertising sales is it is just too much about sales and not enough about advertising.

Audit Idearc’s local postcard sales have been made by hispanic reps in El Paso, Texas, and other hispanic markets. How many of the numbers in the advertisements are disconnected or ring to some newly formed paving, carpentry, locksmith, or painting company?

The Spanish phone books are a JOKE. The rates are a joke. The distribution is a joke. The profit margin is a joke. The entire thing stinks.

I don’t want a Spanish phone book at my house. (I need to remind myself to give Tim O’hare, the Mayor of Farmer’s Branch a call about Spanish phone book littering and see if the city councel can put something together to end this sort of environmental waste — I also recall Idearc changing the book’s name during O’Hare’s nationally recognized push to end the Farmers Branch sanctuary city policies towards illegal immigration.) If saturation distribution wasn’t a big enough issue, we get a few english and now spanish books! Apparently Idearc has had run overs, because they sent me two December publications of the Idearc Spanish Yellow Pages.

Idearc’s corporate fraud began when Scott Klein, the companies newly found CEO, incentivized by a $3.2 million home in Highland Park began lying to investors and employees about the state of Idearc’s business and the decline of yellow pages usage and receivables.  I still think Idearc / Super Media’s next CEO or group of executives needs to have experience with “carrying the bag” before they being hired.  I am anxious to see if he actually manages to reform the organization beyond his intense loquacious lip service work.

Most Yellow Pages advertising sales reps are greedy and unrealistic. I would say many of them are dumb, but I might lose a few friends. Seriously, how much is there to understand about an ad in a phone book. They might want to consider automating the process of purchasing yellow pages ads and transition the companies sales focus to more of a marketing/branding and promotion focused business model.

Well, time to get back to work. It takes a serious amount of energy and effort to start a business. Not as easy as buying an ad in the phone book.

I asked my future “local internet advertising boutique business partner” and chief web developer Jeff Swope what he felt makes he and I different from Idearc. (He has had the pleasure of getting an ear full of my soap box grandstanding over the years.)

His response:

We sell advertising, but advertising sales is not what we do. We are a small web Dallas area marketing boutique. We care about the success of our clients. We call our clients weekly and daily with innovative ideas. We believe that local advertising is as much about brand appearance as it is reputation and ethics. We are accountable. We are responsive.

I want to add:  We teach. My passion is to teach others what I know. I enjoy teaching my clients as well as learning from them.

What makes you the best in town is not just being the best but sharing what you know and being willing to spend the time effort and energy to learn more. I don’t have to the the authority for search engine optimization for all American Small Businesses. I just the SEO authority for my clients in Dallas-Fort Worth. My client who is a transmission shop doesn’t need to become the authority on Google for transmission repair in the United States, but just Garland, Plano, Lewisville and Dallas Tx.

Others in this organization might add that we don’t chase clients with contracts or big attorneys. When you have an issue, it is not softened by 4 mid-level managers before it gets to the desk of the CEO. In most cases you deal directly with the CEO. We have a team of pay-per-click campaign managers who don’t own the campaign after it is built. We build it for the client. We have content writers and web developers who utilize the latest innovations in Web 2.0 and content distribution. We don’t own the content or the site we build for the client. They do. If they cease doing business with our firm for any reason we can recommend another agency through the Dallas Fort Worth Search Engine Marketers Association. Benefit to the client is that most experienced developers can work with our existing efforts due to the capabilities of an open-source content management system like Joomla, WordPress, or Drupal.


Fake Yellow Pages Ads Hurt Your Business

December 8, 2009

Recently I called a few paving companies in Dallas to inform them of the new ad in the front of the book. I wanted to see if they were aware of what had taken place. I was shocked to find that a large percentage of the numbers in the Paving Contractors heading for new ads either do not work, are not real businesses, or they state wrong number when you call. Is this due to sales fraud at Idearc (which was obvious while I was with the company) or is this just a representation of all the errors in the phone book? Take a moment and make a few calls and find out for yourself.

This practice, from both the sales and advertiser perspective, hurts the perception of the value of the yellow pages as a resource, but advertisers that do not pay for advertising also takes phone calls from local paying clients. The industry needs to look at a method of monetizing all calls as well as reducing the fraud and abuse of “sales reps” vs real media and advertising consultants. I recall while at Idearc in Texas a few Hispanic reps explained a process of working with “day workers” and pre-paid cell phones to place ads under headings that did not have credit restrictions and these individuals basically offered the day workers help in creating a new company with $850.00 per month worth of advertising in the Greater Dallas directory.

Not the direction the industry needs to be heading. With so many issues to deal with, sales fraud and advertisers cheating the company by taking calls from other paying clients is not what they need to succeed.


Idearc Bankruptcy may not pass muster. Approval unlikely according to sources….

October 26, 2009

According to the Dow Jones Financial Information Services:

The New York private equity firm said if Idearc can’t settle its differences with creditors and confirm an exit plan at the December hearing, other parties should be allowed to propose alternative strategies for the company.

In its request, Idearc said it is making progress in talks with unsecured creditors. Even if the company, creditors and lenders can’t reach an agreement, it said the dispute is likely to be settled during a November trial of the lawsuit.

In the lawsuit, the unsecured creditors committee said JPMorgan Chase & Co., the agent for the lenders, failed to properly register certain copyrights. They say that means the lenders don’t hold a lien on Idearc’s most valuable assets, the intellectual property needed to print and distribute phone books.

Idearc was spun out of Verizon Communications Inc. in 2006. The company blamed the $9 billion in debt it took on as part of that transaction for its bankruptcy filing.

So, the real assets for Idearc are:

The name (lol)
idearclogo1

-the + 3000 “talented” and trained sales reps on salary
superpages_logo

Switchboard-logo

This logo is smaller for a reason.

This logo is smaller for a reason.

idearc corporate office hotel

So….. who owns the asset of the Verizon Yellow Pages name? If Idearc Media / Verizon Yellow Pages were let’s say “Being Sued for Executive Fraud” or being under investigation by the IRS for Verizon’s bankruptcy spin-offs??

In my opinion the entire spin-off of the company was a pretty bogus deal by Verizon. It stinks rotten. No offense to the fella who I have never met personally from Pepsi! He seems like a pretty funny guy! I especially love the motorcycle stunts for the national sales meeting in February during the announcement of the bankruptcy filing!

According to the Dallas Business Journal:

Phone directory publisher Idearc Inc. said Friday the U.S. Bankruptcy Court for the Northern District of Texas approved the company’s amended disclosure statement outlining the company’s plans for emerging from Chapter 11 bankruptcy.

Dallas-based Idearc said that under its proposed plan, the company’s total debt will be reduced from about $9 billion to approximately $2.75 billion of secured bank debt, with the remainder of the company’s current bank debt and bonds converted to new equity.

Scott Klein, Idearc’s CEO, said in a statement, “The court’s approval of the disclosure statement and its authorization to begin the process for soliciting approval of our plan, signals the latest step toward emergence from Chapter 11.”

Idearc was created in October 2006 when Verizon spun off its yellow pages and directories division into the standalone company. It was launched with $9.1 billion in long-term debt at its creation. Idearc and its subsidiaries filed for Chapter 11 bankruptcy protection in March.

The question of the day is: Did Verizon know that Idearc could not afford the debt burden when it spun the company off with 9.1 BILLION in debt??


Idearc Execs Sued for Fraud via Dick Larkin at YP Commando

October 13, 2009

Idearc Execs Sued for Fraud

Posted using ShareThis

Short and sweet: Scott Klein said that the company was having issues with collections due to a change from “the phone company” bill to Idearc direct billing. He also stated that they had issues with receivables in 2008 from relaxing the credit policy in 2007 (which I can confirm was something that was not disclosed to investors but only sales consultants.) Klein and his treasurer Dee Jones failed to mention the relaxed credit policies in 2007 after the switch from Verizon billing. This had a direct impact on bad debt. Klein violated securities and exchange rules by not disclosing the relaxed credit policies. The stock dropped 40% after he mentioned the decision he made in 2007 to relax credit policies.

Idearc CEO Scott Klein is not committed to the level of transparency that investors need to make proper decisions on whether investing in Idearc is beneficial to them. I have a feeling that he will not be with the company after a new investor takes over majority share of the company.

The companies executives failure to disclose information to investors does not surprise me. The company fails to discuss issues within the sales organization such as racial discrimination (Spanish Yellow Pages sales commissions in Texas) as well as racial discrimination by Scott Klein’s henchman Jesse Vickers who is black and targets folks that are “white.” It is well-known that these and other issues exist within the sales organization.

I believe that Idearc has a “way-to-heavy” amount middle management people in the way of fixing the company’s customer service issues. When a problem exists, instead of the problem going straight to the person responsible for resolving the issue, the problem is sugar-coated by middle management and the client is left with a bad taste in his/her mouth regarding the way the problem was resolved or lacktherof. Idearc fails to ask the right questions from sales reps and clients. Surveys do not work. Workers feel that survey responses may have a direct impact on employment. The environment in the organization has not been positive since the company has been in the hands of Klein and his cronies.

In my PERSONAL opinion, Scott Klein is just like Obama.  He says what he can to make you think the way he wants you to think, but his policies and acts do not mutually benefit Idearc’s clients, investors, or employees. How many of his announcements and promises made back in the February National Sales Meeting have he actually been successful and made improvements to the company? He is full of crap if you ask me.  The best he can do is create a new gimmick for sales consultants, advertisers, and consumers to be duped into believing is original. Klein copied ServiceMagic.com’s ServiceGuarantee and rebrand it the SuperGuarantee.


Are you paying for your competitor’s Verizon Yellow Pages advertisement?

October 8, 2009

As I said before, I left Idearc recently after almost 10 years with the company. I have notices lately that it has gradually been turning into a hire ’em and fire ’em style culture. The company has been churning media consultants and managers. It is obvious that they want sales. I understand that it is a sales organization.

(I edited this article to add the following supportive quote on my “opinion”)
I am offering a quote from Andrew Rudin’s comment titled: “On My Honor, as a Salesperson . . .”: Why Sales Ethics Matter

Which business risk represents the greatest threat to shareholder value? Natural disasters? Terrorism? Product defects? Piracy? Patent infringement? Lack of ethical boundaries?

If you answered anything but the last choice, think again. The massive collapse of market capitalization at Tyco, Worldcom, and Enron underscores the grave dangers posed to shareholder value when employees lack an ethical compass. The cumulative decline in market capitalization resulting from fraud at these three companies was $136 billion, according to Public Citizen’s Congress Watch.

These scandals originated in the executive suite and required an ecosystem of compliant people to execute. What about ethical problems that originate elsewhere? What happens when ethical violations spiral from what are euphemistically called “aggressive sales practices?” In 1998, ethical violations at Prudential Insurance became so pervasive that the company’s management eventually estimated its liability from the pending class-action lawsuit at $2 billion. Among the voluminous courtroom testimony from the case was this nugget: “Your judgment gets clouded out in the field when you are pressured to sell, sell, sell.”

The company is allowing sales fraud to take place by Hispanic sales reps in the Texas area for Spanish yellow pages products and also paying these reps higher commissions to boot.  (before you throw stones at me for stating this: If this subject were taken to court, I am more than 100% positive that it can be attested that what I am saying is true, and I have documentation to prove such) I think Idearc needs to read this article from Harvard Business School.

Idearc has to keep the print business and is forced to make it work. If it doesn’t work Idearc will not survive as a company. It is too horrible at servicing the internet business and offering the level of service it can offer with a print product. It is theoretically impossible for them to retain the same margin going forward as print rates start dropping and so does advertiser count. Idearc has lost many clients during the recession and it will be a challenge to win them back. I am also sure that they will also consider wiping existing client debt away (which is going to be great for sales reps commissions) to increase the amount of opportunity for sales results once they emerge from bankruptcy. Reminds me of the class action law suit regarding credit limits. Idearc will keep paying commissioned sales consultants for .com and ppc sales when the majority of the money goes to Google and Yahoo but declare the revenue not based on the management fee for PPC but the actual client budget (investors correct me if I am wrong?). Seriously, do you really think that Superpages.com is more than 10% of local search? Although, I do see value in both it’s print and online offering, your typical search marketing “uneducated” Idearc sales consultant is just in it to make a buck from a company that wants to get paid with unachievable margins. Yet in my professional opinion they have a few media consultants at the company who are worth more than weight in gold. Folks that have experience that even Harvard Business School could not teach. Working with so many different industries and on different forms of marketing, promotion, message and ad buying is a huge asset. Just my .02 cents.

If you need further visual proof of my statement on sales fraud… just grab a copy of the SuperDirect Postcard decks for the Greater Dallas area…. why are there so many Hispanic surname painting, remodeling, flooring, concrete, and landscaping companies in the decks? They are not making money if they keep allowing the credit limit to be given so freely in an attempt to show positive sales results while telling Wall Street that it was having issues with Receivables. Company motto going forward needs to be reward good paying clients for quality leads. Stop forcing paying clients to foot the bill for non-paying clients advertisements. Why should a reputable company lose calls to a no-pay business? It is hard enough competing in today’s marketplace without all the fraud. I think Idearc doesn’t need but 5-10 clients per category. Have a set rate per lead. Build a call center to screen the leads. Offer existing worthy clients premium opportunities. Kill all the free listings!

It was also apparent that Idearc wants a culture that rewards calling the same clients over and over with the same old spill. Reps are told to disregard notes that state “do not call” or NITC (not interested in telephone call). Now, I don’t know what Idearc’s upper management thinks about this and whether it is just local sales managers, but the thought of beating a client into a sale does not do much to resolve the issues it companies have with client churn. But hey….. according to some clients they just want your credit card number!

I will also mention that I have clients that are making serious ROI on advertising in the product. It does work. It just takes the right ad message, the right ad price, and the right position in the product. Media buyers need to step in and start buying ads for clients vs commissioned sales reps who have no clue what the business can and can not afford. Transparency in pricing will go a long way to helping the yellow pages industry. Make pricing more like Google and give up on this idea of a “affluent homeowner” using and urban scoped directory that takes a zillion lbs of paper. Heck, I remember someone actually stating that if you stacked the Greater Dallas Yellow Pages one on top of the other it would reach the outer atmosphere…. if this is true…. No wonder Ed Kohler at http://www.thedeets.com is going nuts!

Cheers,
Mike Stewart
(former Idearc Media Consultant speaking out)
http://www.dallasSEOguru.com