Lehman Excel snafu could cost Barclays dear A formatting fubar involving an Excel spreadsheet has left Barclays Capital with contracts involving collapsed investment bank Lehman Brothers than it never meant to acquire. Working to a tight deadline, a junior law associate at Cleary Gottlieb Steen & Hamilton LLP converted an Excel file into a PDF format document. The doc …
How about Lehman employee(s) snafu
Cos it was the software that did what the employee told it to do
And it was the employee(s) who didn't final proof a multi-million dollar contract document
Anyone who has worked with office/PDF and assumes that the pdf will always be an exact replication of the screen view is a dickhead
IT - cos there is no IT angle to this cock-up
Java and MS strikes again.
Yeah, it is not so much the technology (though of course it is), or the techies (and yes it should be), and more to do with how these businesses don't use tech correctly.
Spreadsheets should be banned, they are bane, they are meant to be used for quick jobs of little importance, but for some reason accountants think the spreadsheet is the computer, bunch of thicko's. Why anyone would entrust any monies to them is beyond me.
Spreadsheets are fantastic, for small users handling a moderate amount of relatively simple data, and for quick and dirty bulk operations (approximate estimates, outline coding etc). They are unsuitable for large amounts of complex information, data that needs to be critically accurate or where more than 2 or 3 users are involved. Oh, and keeping people happy with pretty and meaningless graphs.
Yes, I'm a fan of Linux, but this is nothing to do with Microsoft being crap (even though Excel can't even do compound interest properly, so I don't know why anyone in the financial sector would touch it with a barge pole), it's using the wrong type of software for the job. Converting to pdf is actually not their fault either - the user has every right to expect something as simple as that to "just work"
Anyone using a spreadsheet for a complex transaction such as this deserves to have their intellect rated on a par with Ms Hilton's.
Does anybody else remember the episode from "The Fall and Rise of Reggie Perrin" where he wants to hijack a lorry load of strawberry dessert? He waves a load of continuous stationery in front of the security guard who says "Oh, the computer, well, that's all in order then" and hands over the keys [details may be hazy, but roughly like this].
A spreadsheet has a lot of attributes: it is a data repository; it is a load of executable code; it is documentary output. And yet, because they can be "understood" by the layman, time and again we see the most basic software engineering disciplines being omitted. "Oh, this formula didn't copy into this cell correctly".
So while there is clearly a specific error here, it absolutely reflects a systematic failure on the part of Barclays. And one which is sadly, pretty universal.
Adobe Acrobat is a notoriously unrealible conversion program when it comes to the finer details. It will convert a basic document quite well but it will ignore the finer details of even very common and well understood document formats like Word or Excel. Even the latast, which I recently purchased to update my dated copy, still can not figure out the difference between section page numbers and document page number in a Word document. The igoring of the hidden attribute of an Excel sheet, I believe, is an option that is turned off by default rather than a bug, but it must be stressed: If this is an important document and you are conveting it using Adobe Acrobat - read the resulting PDF file before sending it out. I have been using (and swearing at) Acrobat Professional for many years and it will embarrass you if you give it a chance. Note: There are free alternatives that screw up just as much but at least you get more than you paid for.
Still doesn't come back to the applications being used - particularly when anyone with any experience at all of those apps would be aware of their shortcomings. People who expect complex apps to wipe their arses for them just cos a marketing bloke told them it would deserve all they get when things go titsup.
And managers who expect multimillion dollar contract papers to be prepared without timetabling final proofing should be fired.
Though if they'd use OO Calc it would have been OO Calc's fault.
As an AC said earlier, spreadsheets should NOT be used for that sort of thing.
And why are spreadsheets (especially with lots of markup that can be ignored all to easily) used in this way?
MS touted them as the be-all and end-all of "data presentation". That was their fault.
It is also the fault of the user, both for using a spreadsheet incorrectly and for having bought into the bullshit about how great and "enterprise ready" Excel was.
It was the managers fault for making them use it (it's often a manager who DEMANDS the document works on their desktop, so it must be MS). And their fault for putting the deadline in.
It was the solicitors agreement that didn't have "these are interim purchases, considered at short notice and to be ratified later".
Legal ramifications? Well Barclays won't swallow it so they'll appeal. It isn't a slam-dunk so it WILL go to court and they may have to suck it up anyway. If they do, the only option they have left to avoid the problem is to sue the legal company who misused the documents. Good luck in suing a solicitor, though.
NOTE: Just because it was something's fault, doesn't mean that it was the only one to blame. Women do that when you say "don't dress flaunting your bits" as advice for avoiding assault. They often think that because you blame the woman's actions, you MUST be giving the man's actions a bye on it.
"even very common and well understood document formats like Word or Excel"
Shit, man. ANOTHER statement I was lucky not to have gotten a cup of coffee before reading.
WELL UNDERSTOOD????
PWAAHAHAHAHAHAHAAA!
Even MS don't understand it.
Common I could have given you (though WHICH version means it isn't even that).
Others have already pointed out that Excel was the wrong tool for this job. Likewise, 'hiding' the data to be excluded was the wrong way to remove it. Converting to PDF was arguably the one aspect they got right - except it seems they converted it in the wrong way, since the hidden attribute shouldn't have been ignored.
They deserve to be beaten with a big cluestick and have their computer access revoked for a few months. Six months of doing all the paperwork on actual paper should teach them not to entrust billion dollar deals to a cheap graphing package.
Barclays screwed up three times over here, but it wasn't Acrobat which was at fault (nor, indeed, was Acrobat necessarily even involved at any point!) - just operator error and a poor choice of software.
And ONLY one thing about them. "The printer was working that day!". If anyone assumes anything more about the printout, they deserve what they get.
Anyone can make up something convincing to show off. It is VERY easy to do. The observant will know this and take action accordingly. The stupid will get what they deserve. It is similar to taking Wikipedia as gospel truth. Don't believe everything that is printed/on the web!
Ignore at your own peril!
"And ONLY one thing about them. "The printer was working that day!"
That's assuming way too much... more like "those part of the printer were working at the exact moment it was printed" (think: a monochrome printout has no need for the colour cartridge(s) to be working)
Sorry
As an accountant I consider spreadsheets a tool and like other tools it's my responsibility to understand it and use it appropriately. It does frighten me the number of professional people I meet who use spreadsheets badly with little or no training and not even prepared to teach themselves as I did.
All tools have limitations and as a user you have to work within them. There are best practices when it comes to spreadsheets the same as there are for most tools, whether they get followed is another matter.
I'm sure the same can be said for programming and a lot of other disciplines, just because there are best practices doesn't stop people from taking shortcuts and producing buggy code.
I'd recommend anyone to lookup the "subversive spreadsheet" which is some research done by the Revenue on spreadsheet risk.
To sum up the basic premise is a single error in a single spreadsheet will subvert all of the controls of all of the systems behind it.
If you forget that then your pretty much going to be screwed at some point.
You don't use Adobe Acrobat to CONVERT Excel or Word!!! You PRINT to a PDF converter after doing a preview, and you WILL have what you were expecting.
All you eejits on here who bleat on about how it's Microsoft's fault or Java getting involved, for one, Acrobat is NOT a Microsoft product, and for two, it's not Java either. Use a proper piece of software that does print conversion to PDF (and there are many out there used by legal eagles and the like) and this does not happen.
And why is Excel a bad format for this? What would you prefer to use that is commonly used in financial and legal practices? Access just to satisfy your boneheaded belief that that stuff belongs in a database, properly cross-indexed? Or Word perhaps? Which is just as retarded, if not more retarded than Excel? Excel does (and did) what it was good for. Crunching lots of numeric data, and being able to transform the data as the people who built it wanted.
And it's also good at hiding data that is not relevant at the time (Barclays hid the rows of the contracts they DIDN'T want and told the associate to use the ones that were visible). Now if you don't know how to print (and make sure that hidden content is not printed) to a PDF generator, then perhaps you need some retraining.
This is a non-story, although an amusing one. Nothing wrong with using spreadsheets for one-off calculations, or printing them out, or using PDFs. Technical snafus and mistakes can happen to anyone at any time, whatever you do, whether it's paper and pencil, you miskey something into your calculator, if the photocopier gets stuck and skips an important page, if you mistype a letter on a typewriter, or anything else. And trust me, using XML and EDI and writing special software for this is hardly likely to be LESS error prone, quite the opposite in fact.
As to who's to blame for the current financial crisis the answer surely is obvious. It's anyone and everyone who's ever subsidised their lifestyle on credit cards or bank overdrafts, desperate to have a slice of the good time today and living on the never never on the assumption things will keep on going the way they always have. In order words, you and me and all of us.
When you paste a filtered table from the Mac version of Excel into the Mac version of Word, it all appears to go swimmingly. Later you discover that whilst it looked like it had only pasted the filtered cells in, it's actually pasted the whole table.
Sounds like the same thing has happened here.
So Barclays, part of the cash starved UK and world banking system which is desperately in need of taxpayer capital injections can afford to pay $1.35 billion?
Where's the money coming from I wonder, I'd hope not taxpayers funds.
It also makes me wonder whats going to happen with the HBOS and Lloyds TSB deals given both banks have apparently asked for a share in the capital funding available.
It's one thing to bail out these dimwits for the sake of the whole economy, but letting them profit off of the situation means that the sort of mentality that got us into this mess is still in charge. Certainly they don't seem to have taken any lessons on board about controls and risk management.
Couldn't happen to a more deserving bank, hope they get loaded with even more toxic debt. Barclays = scum of the earth.
Tipical Barclays moment, to Lehmans before the crash. "Sure we'll help you out, how much do you want us to buy? Oh wait, it would be cheaper if we let you go to the wall, then buy it. More profit for us then and we could prob find another mug to sell it on to.Bye bye!!
Hello Gordon, we have just got this fantastic deal, sure fire do you want in?
Come the revolution, Barclays first against the wall.
No sensible suggestions on what should have been used I see.
'A proper document'. (www.properdocument.com ?). Ah yes. That's the solution. We can add up all the numbers by hand and then scribe them to vellum.
Surely the Reg readership would prefer to stick it to the 'junior LAW associate' than the much beloved Excel ? This is what happens when you let liberal arts students loose with technology (etc etc etc).
Ok, so I admit I'm no techie, but from what I have read above, IF the spreadsheet had been sent to Barclays - amended/changed/whatever, then sent back to Lehmans, then re-sent to Barclays. IF they had change controls round the spreadsheet, they would have been able to compare the two versions - hidden sheets/hidden cells shown in all their glory. No one is superman (or woman) and can easily spot the changes made without a little help. So IF you are going to use spreadsheets, put the controls around them. It's not rock science. I could post which company I work for, but that would be tacky!!
Just one thing to say, those few hours to spare should have been used to proof reading. Especially for multi-million dollar deal. The amount of rows/cells is irrelevant, given Barclays' resources.
And to be honest, having used spreadsheets for years and being IT professional, I wasn't aware of such awful bug. PDF has always been presented as a digital print and that's what it should be.
Barclays with all their might should give a long thought to their deal making first and then choices of their software. It would be interesting if Barclays will do something about making sure that Macromedia will fix this bug.
:-)
1. Barclays is not asking, nor have asked, for public funding. Its capitalization plan, approved by British authorities, is entirely based on private funding.
2. Barclays pulled from negotiations on the purchase of the whole Lehman Bross business, with the load of bad assets of its all international branches. It took over its North American arm, with US balance sheet only.
3. As El Reg noted, snafu was on the side of law firm employed by Barclays to prepare the contract.
Always Remembered Instructor's Advice:
.Never send something without reading it through at least once.
.Never trust 'The Computer' to do your thinking for you.
.Trying to hide something on the 'Net is like trying to stuff the mushroom cloud back in the shiny uranium sphere.
.Delete, don't "hide". Someone will find it if you leave it there.
.Once you've deleted everything you don't want, cut-n-paste to a new blank document.
.Never forget the "Track Changes" feature can bite your ass.
.To err is human. To really fsck up, trust the computer.
.Artificial Intelligence is no match for Natural Stupidity.
.Information might not want to be free, but the chances of it escaping are directly propertional to the grief it will cause you.
I still have the greatest confidence in the mission, Dave.
"And why are spreadsheets (especially with lots of markup that can be ignored all to easily) used in this way?
MS touted them as the be-all and end-all of "data presentation". That was their fault."
Wrong a wrong oh. The spreadsheet as we know it was invented by a chap called Dan Bricklin, a programmer who decided to do an MBA, during which he saw a professor doing a gert big dirty calculation (production planning, IIRC) across multiple blackboards, each containing rows of cells, the value of which depended on other values in other cells. Bricklin set out to computerise the whole process and set up a company called Software Arts with another bod, whose name eludes me for the moment (GIYF) and the result was Visicalc, the first computer spreadsheet, and the killer app for the Apple II which elevated it above the status of an expensive toy and placed it onto the desks of corporate 'merka. this would be around 1978/9 or so.
Later, along came Mitch Kapor, set up Lotus, and got another chap (whose name again eludes me, which is shocking really) to knock up Lotus 123, the killer app for the nascent IBM PC. (~1982 ?)
MS had a complete dog of a Visicalc rip off called Multiplan running on CP/M, but it didn't see the light of day on an MS platform (as Excel) until about 1987, IIRC, and for a long time they were playing catch up to 123, which was the tool of choice for professional spreadsheet users such as accountants and the like.
So it's a bit bleedin' rich to blame MS for popularising spreadsheets. Because they didn't, m'kay ?
In ascending order of antiquity, Lotus 1-2-3, Supercalc and Visicalc !!
When Visicalc first came out it was an instant hit with the financial community and sold more Apple 2Es than Apple's own marketing did !! This led to a legacy of using spreadsheets for everything in that industry that still exist today, hence this problem !!
As for conversions to PDF, Ghostscript works and its free !! If you don't like it, they will cheerfully refund what you paid for it !!
Use crap, get crap. What the fuck was a company that size (I'm assuming they weren't using a 2 person law outfit) doing using a cheap-arse spreadsheet package to handle that much data? I'm guessing the "employee" in question was never actually trained on the package, and expected to learn all the intricacies on their own time? So yet again a corporation opts for a cheap solution and gets creamed. Meanwhile, it's the employee who got stuck with actually trying to make the inappropriate solution work that gets the blame for the corporations (read: managers) lack of planning.
As I recall, it was a spreadsheet that did for BZW; they'd been using it for a while to mastermind whatever it was they did and then, as more Masters of the Universe played with it, it led them to believe that what it said was true... People just don't seem to learn...
It is similar to taking Wikipedia as gospel truth.
OH CRAP! Now yer gonna get the religious right up in arms.
@ac - All you eejits on here who bleat on.... I think you mean sheeple, but thanks for the boneheaded and retarded. you're on a roll. Pretty soon you might get up to "the databases are coming!"
@mark - we need a male dumbass icon...ha ha ha ha you owe me a keyboard now.
I didn't talk about who invented it.
I talked about who got into the heads of PHB's that EVERYTHING could be solved with Excel. Lotus123 wouldn't have worked better, nor VisiCalc. Then again, they weren't used for a database. Or the prime and endpoint both of your information.
MS and its inclusion of VBA to operate the system as well as the spreadsheet contents and then their attempts to make VBA a "prime selling point" that caused people to believe they could use a spreadsheet in such a way.
The spreadsheet could have been used as the primary data source but the information extracted to a document (a real one, even MS Office with a suitable template would have worked, and not using OLE to move it) and then the document checked over (against the spreadsheet would be OK).
Spreadsheet -> output
output -> Document
Document -> synopsis
Spreadsheet -> synopsis
check synopsis match
Check document.
Send.
Forget your history much? Or are you one of those young'uns who thinks the world began in 2000? Ever wonder why 1-2-3 was called 1-2-3? Well, back in [makes wobbly movement with hands] 1982 or so, the integrated package was making its first steps into the world: VisiCorp, flush with cash from VisiCalc, had announced the groundbreaking Visi-On, Ashton-Tate had Framework and Lotus had 1-2-3, so called because "It's a spreadsheet, a database and a charting package." Oh, and for VBA, substitute 1-2-3 macros.
From memory, PHBs moved from 1-2-3 to Excel because Excel was:
a) cheaper
b) worked better on Windows - while Lotus weren't as incompetent as WordPerfect, their Windows version was, in the early 90s, a piece of shit because, after all, OS/2 was what professionals used: IBM said so... - and
c) LDC took their eye off the ball and built Improv - i.e. they built the product they thought people *should* want - rather than improving 1-2-3 - which paying customers *did* want.
"I talked about who got into the heads of PHB's that EVERYTHING could be solved with Excel. "
And you're still wrong, spreadsheets were a PHB favourite before Excel was even published, and as far as the PC using PHBs are concerned, you can point the finger firmly at Kapor's Lotus Development which spent the bulk of it's $3 Million venture capital specifically on marketing into corporations before Excel even existed as a product.
Not that it would have mattered much, PHBs wanted spreadsheets, they were the killer app for business computing.
PHBs have loved spreadsheets since there have been spreadsheets to love.
Spreadsheets run most businesses. Any of the moronic posts "decrying this ghastly situation" are clearly written by people trapped in poverty and confusion. The core of this sad story is that the morons who control all the stacks of wonga handed over to them by d'workers consider it all to be a bit of a laugh and not really worth taking seriously. A clerical error leading to huge losses is something which should never ever happen.
Anyone working in retail or stock control knows the checks and balances built into the systems to make sure nothing goes missing. Yet when dealing with vast wealth some distressed chinless wonder can hoik huge chunks of money into the ether without batting an eyelid. Where's the iso 9001 procedure manual for these saps? I suppose the Boris Johnsons of this world should be put to work somewhere, just keep them away from real people's savings.
This is minor clerical error. Easily fixed by the court. The hyperbole here is fascinating. Its incredible how people with no actual knowledge of the situation or understanding if even the basic concepts of what happened, nonetheless feel the need to pontificate wildly.
No one is losing money or a job over this.
Take the time to read the actual court submission (a pdf file no less!). It is not just the hidden rows. There was once a column called "Critical?" and each row had a "Y" or "N" in it.
They are claiming they don't want any of the things that were marked "N" in that column. Problem is, someone deleted that column and then had no idea which ones were "Y" or "N".
Sounds like a lawyer, not IT, error to me.
I have just been given an attachment which is a simple list of a few accounts I need to check.
It has been sent to me as an xls spreadsheet file.
Why?
Because "It's Excel. It can do ANYTHING!!!".
Bah.
Stupid fuckers.
So now, rather than just read the info, I've got to open up an expensive package that isn't all that quick and cut and paste the content into a text file so I can automate the search.
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