Big Frauds

Uber's C-suite set poor tone at the top

Part 2 of 2

On Nov. 28, 2017, just a week after Uber revealed that it was the victim of a huge data breach affecting more than 57 million accounts, a U.S. federal court judge slammed the company a day before jury selection was set to begin in a trade secrets trial between Uber and Waymo, the self-driving car unit of Alphabet, Google’s parent company.

“I can no longer trust the words of the lawyers for Uber in this case,” said Judge William Alsup in court.

Uber previously hadn’t disclosed the breach to authorities or the affected account holders for more than a year. Instead, it paid $100,000 to a 20-year-old, live-at-home hacker to keep the breach a secret. (See Uber paid 20-year-old Florida man to keep data breach secret, sources said, by Reuters, Dec. 6, 2017.)

Alsup made the “trust” statement after the U.S. Attorney’s Office of Northern California had presented him with a letter in which Richard Jacobs, a former manager of global intelligence at Uber, outlined claims of an advanced corporate espionage program at Uber to Angela Padilla, Uber’s deputy general counsel.

According to an article in The New York Times, the letter’s discovery caused Alsup to delay the Waymo trade secrets trial.

“If even half of what is in that letter is true,” Alsup said in court, “it would be an injustice for Waymo to go to trial.” Alsup told Uber’s lawyers, “You should have come clean with this long ago.” (See Rebuking Uber Lawyers, Judge Delays Trade Secrets Trial, by Cade Metz, The New York Times, Nov. 28, 2017.)

In the January/February issue, we examined how Uber and its competitors have changed the hired car industry — and thereby changed the industry’s fraud profile. Here in part two, we take a deeper dive into some of Uber’s fraud, ethics and compliance issues that the business and mainstream press highlighted in 2017.


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