CFO Kevin Krakora was largest inside trader during mass August 2007 sell-off, near historic company high, as reported exclusively by The BRAD BLOG

Diebold's bad month gets worse...

Brad Friedman Byon 3/25/2009, 8:19pm PT

It's been a bad month for Diebold (DBD), what with the findings in CA that their voting machines drop votes and their audit logs allows deletion of records; their admission that all of their voting machines fail to record ballot deletions, and that their ATMs were hacked, likely by insiders, just to point to a few of their recent embarrassing headlines.

But things are getting still worse by the minute, it seems. This, from Cleveland's Plain Dealer today:

Diebold Inc.'s chief financial officer has stepped down in the wake of a U.S. Securities and Exchange Commission investigation into possible violations of federal securities laws. Kevin Krakora, 53, who also stepped down as executive vice president, will remain in a nonfinancial reporting capacity until the matter is resolved, Diebold said Wednesday in a filing with the SEC.

There are more details at the Dealer (though caution is advised: most of their reporting is based on statements given by Diebold, so bring plenty of grains of salt!).

That said, The BRAD BLOG broke an exclusive story, in August of 2007, concerning a mass sell-off by 10 Diebold officers who had all managed to unload hundreds of thousands of dollars' worth of stock, each on the very same day on Aug. 7th, when the share price was near an historic high. It fell quickly and preciptously thereafter (15% in the next week alone) following news of Diebold spinning off its election company into a "new company" named Premier Election Solutions.

The largest sale of stock made on that day, Aug. 7th 2007, was by Kevin Krakora, the CFO who stepped down today. He had sold $167,107 worth of stock (3,150 shares) at the near-historic high of $53.05 per share.

Diebold stock plunged in value more than 50% over the next several months, following the mass Aug. '07 selloff. It's been falling ever since, with one exception in March of 2008 when United Technologies Corp. (UTC) attempted an unsuccessful takeover of the company. The stock shot up momentarily on that news, but has been largely falling again ever since.

Shares of Diebold closed on Wednesday at $21.53, down 5.4% on the day. The last time the stock was at that bargain basement price was prior to George W. Bush's "election" (aided in part, by the way, by a Diebold tabulator in Volusia County, FL, which gave negative 16,022 votes to Al Gore --- an anomaly which has never been explained by anyone).

We couldn't tell you whether the news of Krakora's stepping down today has anything to do with our coverage of the questionable insider trading in August of '07. Or whether it stems from other questionable Diebold activities --- they've been facing a class-action securities fraud lawsuit from shareholders since 2005; under SEC investigation since 2006; and under DoJ investigation since 2007; and admitted overstating '07 earnings in early 2008.

But if we helped in any way, you're welcome, America!



