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TOPIC: Allegations of criminal conduct against CN


Barely a pulse...

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Allegations of criminal conduct against CN
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CN facing allegations it engaged in criminal conduct and fired employee over whistleblowing: US court documents

Source: Jorge Barrera and Kenneth Jackson - APTN National News

Canadian National Railway was allegedly engaged in criminal conduct by defrauding shareholders and U.S. federal regulators by manipulating data to boost its efficiency and, by extension, its share price, according to a whistleblower complaint filed in U.S. federal court.

The complaint also alleges that CN has an unwritten policy of retaliating against whistleblowers and that the alleged criminal conduct was endorsed by a senior official in CNs head office to keep the companys share prices high.

The case was filed in early August with the U.S. federal courts Western District of Tennessee by a former trainmaster employed by wholly-owned subsidiaries of CN, Wisconsin Central and Illinois Central Railroad. CN consolidates the financial statements of both rail firms within its own financial statements.

Timothy Wallender alleges that he was fired in September 2012 by CN for blowing the whistle on widespread fraud committed by the century-old Canadian railway company.

http://aptn.ca/pages/news/2013/09/25/cn-facing-allegations-it-engaged-in-criminal-conduct-and-fired-employee-over-whistleblowing-us-court-documents/

Wallender alleges that the fraud was committed under the direction of CNs former executive vice-president and chief operating officer Keith Creel, who is now with Canadian Pacific, according to the complaint filed with the U.S. court.

None of the allegations have yet been proven in court.

CN said it would not comment on the individual allegations.

As this is a pending litigation matter and particularly as CN has not been served with the federal court complaint, CN has no comment at this time. Please note that Keith Creel is no longer a CN employee. He is president and chief operating officer at Canadian Pacific Railway, said CN spokesperson Mark Hallman.

A spokesperson for CP said the company would not be commenting on the court action.

As this is a matter currently before the courts, CP has no comment at this time, said Ed Greenberg in an emailed statement.

Creel, who joined CP in February 2013 and is its president and chief operating officer, has been issued a summons, along with Andrew Martin, the general superintendent of the Harrison Yard in Memphis, Tenn., Wisconsin Central and Illinois Central Railroad.

The litigation is just starting, and I dont expect to hear anything until they get served, said one of Wallenders lawyers Eugene Laurenzi, who is with Memphis-based law firm Godwin Morris Laurenzi and Bloomfield.

Wallenders allegations centre around the alleged manipulation of the terminal dwell time of rail cars in the Harrison Yard. Terminal dwell time is based on the amount of time a rail car spends in the yard before its hooked into another train for transport. The times are key indicators to a rail companys performance and impact its share price, according to Laurenzi.

CN claimed in Oct 2012 that it has a 20 to 25 per cent advantage relative to its peers, in terms of train speed and dwell time, according to Wallenders complaint which quotes from the Brokerage Research Digest.

CNs CEO Claude Mongeau said in the companys 2011 report to shareholders that we work hard to run more efficient trains, reduce dwell time at our terminals and improve overall work velocity, the complaint states.

CN outperforms six other major railroads in North American on dwell times, according to online data tracked by Railroad Performance Measures. CNs times are based on nine of its yards, including the Memphis yard, five yards in Canada and three other yards in the U.S.

Canadian Nationals supposedly favorable statistics on terminal dwell at Harrison Yard are based on persistent and pervasive fraud, according to Wallenders complaint.

Wallender claims Martin, his supervisor, ordered employees to change the program on CNs computers to automatically show trains departing 30 minutes earlier than they actually left, create records showing lower than actual dwell times in the yard, falsely list trains as having left the yard while they sat on the tracks, and report non-defective cars as defective, among other orders.

By using this scheme, Canadian national was able to create records that falsely showed lower than actual dwell time for Hunter yard, the complaint said.

Wallender also claims Martin ordered CN employees to not report derailments and collisions to the Federal Railroad Administration.

Despite complaints against Martin and two investigations by CNs human resources department, the supervisor was never fired, the complaint alleged.

Wallender claims that Martin told employees at the Harrison Yard that he had a green light and carte blanche from Creel to implement his schemes for using false records to show lower than actual dwell time at the yard.

Creel protected Martin from being fired so his share-based compensation would not be impaired, according to the complaint. A significant part of Creels compensation depended on his ability to inflate the price of Canadian Nationals shares.

In 2011, Creel had a salary of $558,842, a restricted stock award of $872,583, stock option awards of $676,706, a non-equity incentive plan compensation of $713,947 and, as of the same year, unexercised options for 43,250 CN shares.

Despite his complaints Wallender was fired on Sept. 30, 2012, for listing a train as having arrived before it was physically present.

Wallender, however, believes he was fired as a result of CNs unwritten anti-whistleblower policy because he tried to complain about mail, wire and securities fraud along with violations of SEC rules on regulations and violations of federal laws relating to fraud against shareholders.

Wallender is seeking reinstatement at the same level, back pay with interest, general and special damages and reimbursement for litigation costs.



-- Edited by Thunderwagon5000 on Thursday 26th of September 2013 08:36:16 PM

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Would that mean it isn't proper to put you out when you weren't even on the engine yet?

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Force Majeure

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LAMCO execs should be profusely sweating right now.

The basis for the lawsuit itself is nothing short of genius!

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Cy Valley wrote:

Would that mean it isn't proper to put you out when you weren't even on the engine yet?



Huh ? Nooo, that's not even an issue. If you worry about details like that, that are none of our business , you are just going to be worried all the time. Relax, and don't ask so many questions.  It likely does suggest that persistently asking questions about why certain "busy" road switchers haul cars out into the country one day and back into the yard the the next day, on and on ad nauseum will give you that distinct and ominous feeling there is a scope pointed your way with the cross hairs lined up on your back. 



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Purveyor of Positive Attitudes

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I am shawked by the malicious and slanderous allegations. LINTCO is the most efficiently run corporashun in 'Murica, North and South. I have never seen trains reported as departed before they arrive, trains taking the"back way" out of the yard to avoid passing the scanner, trainmasters fired for falsely reporting interchange times, trainmasters fired for hanging the helpers on at the yard rather than letting the trains leave the yard and promptly stall on the hill 6 miles away...

I can't believe my head didn't just explode.

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Barely a pulse...

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Me either. Lintco says my attitude of indifference to their program of cutting dwell times is a bad influence on the new guys. But, really I just don't care.



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Uke


Cured

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Shippers gotta know someting ain't quite right when their carloads seem ta get lost enroute... Especially when they use LINTCO's own "tracking" software ta follow their shipments.

Look for similar ta come ta light eventually now that Hillbilly Harrison has been installed as pres. of CP. He's bound ta show 'em how it's done properly... Railroading that is. And ta prove his point, he'll point to CN's success. Yep!

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Unstable & Irrational

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This if phun!

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Barely a pulse...

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" A friend " suggested that they really don't even know where their locomotive fleet is half the time, never mind the phrickin carloads. Could that be a "weird or what ?" true fact or is it Saskatchiewayne River mud  ?  Doh !



-- Edited by Thunderwagon5000 on Monday 30th of September 2013 01:08:16 PM

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Sunovabeetch!

They are letting all the cats out of the bag...

Corse they just put car scanners on the inbound and outbound engine leads, as well

as the servicing tracks. That way they know what time the power arrived and left, what

time it was serviced, how long it took to service it, etc etc.

Corse, they also put in a scanner on the hump lead, just before the crest. no more pencil whipping

100 empty hoppers over the hump to up the days car count...



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Barely a pulse...

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Another cowardly defector from the brown shirt ranks squealing like a stuck pig.

The Mafia stole my guitar . Muddy waters overcome. nodisbeliefno

 

Lawsuit says CN cooks books

A whistleblower lawsuit in the United States is accusing CN Rail of fudging its numbers to increase executive bonuses and to make it appear to be North America's most efficient railroad for investors.

Tim Wallender, a former CN trainmaster based at the company's Harrison Yard in Memphis, Tenn. has filed a lawsuit under the U.S. Sarbanes-Oxley Act which was passed into law to protect whistleblowers following the Enron scandal in the early 2000s.

CN is asking that Wallender's claims that it routinely reported fraudulent efficiency statistics to shareholders and customers be thrown out. CN claims he repeatedly reported train movements falsely and got fired for it.

Wallender, 42, does not deny fudging the numbers but insists he was ordered to by his boss.

http://www.cbc.ca/news/whistleblower-lawsuit-says-cn-is-cooking-its-books-1.2187724

 

 



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Unstable & Irrational

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I just posted the article on my facebook page........ I say again, this is phun! When Tony Ingram visited Philly, I was standing next to him, I let it slip that I was a big supporter of the Sarbines-Oxley act......

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