Oh My Fraud

Over the course of Erik Lie’s career, seemingly small decisions have transformed into defining moments. Everything from leaving his native Norway to study at the University of Oregon, to a squash partner’s nudge that he pursue a career as a finance professor. But it was his choice of a research topic—executive compensation—that led to the most significant moment of all: uncovering one of the most explosive corporate scandals of the 21st century.

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Buy Erik's New Book
https://www.amazon.com/gp/product/B0DV4BLF8J?tag=randohouseinc7986-20
Connect with Erik Lie
https://eriklie.com/
https://www.linkedin.com/in/erik-lie-627a7351

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CONNECT WITH CALEB

Twitter: https://twitter.com/cnewquist
LinkedIn: https://www.linkedin.com/in/calebnewquist/

Sources:

On the Timing of CEO Stock Option Awards [Management Science]
Does backdating explain the stock price pattern around executive stock option grants? [Journal of Financial Economics]
He's Making Hay As CEOs Squirm [BusinessWeek via Wayback Machine]
Erik Lie [Time 100 via Wayback Machine]
Backdating Scandal Ends With a Whimper [NYT]
Erik Lie [Iowa Tippie College of Business]
Catching Cheats | Everyday Forensics to Unmask Business Fraud [Berret-Koehler]
Meet the Fraud Professor: Daniel J. Taylor of The Wharton School [OMF]

85 MIN

OCT 8, 2025

The Belgian Waffle

A scrappy Flemish speech recognition company tries to put its hometown on the global tech map.

Sponsors
Routable - http://ohmyfraud.promo/routable
Bluebook - http://ohmyfraud.promo/bluebook

(00:00) - A Pie to the Face
(01:00) - Welcome to Oh My Fraud
(06:00) - Welcome to Flanders, Belgium
(07:30) - Meet the Founders: Jo Lernout and Pol Hauspie
(09:30) - The Dream of Voice Recognition
(15:12) - Going Public in a Crowded Market
(17:42) - Creating the Flanders Language Valley
(21:42) - Gaston Bastiaens and His Wine Cellar Wager
(26:23) - Microsoft's $45 Million Investment
(29:23) - The Philosophy of Pie Throwing
(30:53) - Explosive Growth and Suspicious Numbers
(32:53) - Dragon Systems and Dictaphone Acquisitions
(35:23) - The Korean Revenue Mystery
(38:23) - Wall Street Journal Starts Digging
(42:18) - "I Lied About Everything"
(43:48) - The Resignation and Bankruptcy
(47:48) - The SEC Reveals the Fraud
(49:48) - Criminal Convictions and Symbolic Justice
(50:48) - Lessons Learned: Fake It Till You Make It
(52:18) - What Happened to the Technology
(53:48) - Closing Thoughts

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Download the app:

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CONNECT WITH CALEB
LinkedIn: https://www.linkedin.com/in/calebnewquist/

Email us at [email protected]

Sources:

How Hype Hurt Lernout & Hauspie [Bloomberg via Wayback Machine]
How High-Tech Dream Shattered In Scandal at Lernout & Hauspie [WSJ]
Lernout & Hauspie Speech Products: Financing From Start-up through IPO [INSEAD, Herwig Langohr, Benoit Leleux, Danny Lein, July 2000, accessed on Sept. 16, 2025]
Lernout & Hauspie Speech Products: The Question [INSEAD, Arnoud De Meyer, Bart Pycke, January 1998, accessed on Sept. 16, 2025]
Quarterdeck Office Systems [Wikipedia]
Patent Is Won By Quarterdeck [NYT]
Internet Hype Gives New Life to Quarterdeck Stock [LAT]
Gaston Bastiaens [Apple.Fandom]
Today in Apple history: Apple exec bets his wine cellar on Newton [CultofMac]
Will Microsoft's Stake in Lernout & Hauspie Drive Growth in Speech? [Speech Technology Magazine]
In Brussels, Gates Takes a Pie in the Face [Reuters via Wayback Machine]
Bill Gates Being Hit in the Face With a Pie (1998) [YouTube]
Noël Godin [Wikipedia]
He Plasters Paris’ Elite With Cream Pies [LAT]
Bernard-Henri Levy Pied again in Belgium [YouTube]
FM Interviews: Noël Godin [First Monday]
Lernout & Hauspie Shares Drop Amid Puzzling Revenue Results [WSJ]
Lernout & Hauspie Surges In Korea, Raising Questions [WSJ]
Lernout's Bastiaens Will Step Down From CEO Post at Software Concern [WSJ]
Lernout to Refile Financial Reports; Co-Founders Resign as Chairmen [WSJ]
Lernout Files for Bankruptcy Protection, Says Cash at South Korean Unit Is Missing [WSJ]
The Talk of Flanders Has Most Speechless [AP]
Lernout & Hauspie Speech Products, N.V., Litigation Release No. 17782, Accounting and Auditing Enforcement Release No. 1648, October 10, 2002 [Securities and Exchange Commission]
Lernout & Hauspie Speech Products, N.V., Litigation Release No. 18014, March 4, 2003 [Securities and Exchange Commission]
Lernout & Hauspie Founders Guilty in Fraud [WSJ]
Goldman Sachs and the $580 Million Black Hole [NYT]

54 MIN

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