Which changes in accounting principle are material?

October 24, 2012

What misstatements or omissions are “material” and which are not?  With the recent roll-out of the SEC’s new whistleblower regulations, it is a popular question among companies and prospective whistleblowers.  This brief summary offers insights into this important topic as it applies to changes in accounting principle. First, despite recent IFRS rumblings, SEC regulations require […]

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Confidentiality agreements blocked by SEC Rule 21F-17

June 20, 2011

For whistleblowers and their past or present employers, one of the more important features of the SEC’s new whistleblower program regulations is Rule 21F-17,  copied in part below.  Over the years, targets of whistleblower claims have employed increasingly aggressive and sophisticated tactics — including “gag orders,” TROs, and breach of confidentiality agreement or even trade-secret-theft […]

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Sharing PHI with attorneys: OK under HIPAA?

December 30, 2010

The single largest group of health care whistleblowers are health care workers themselves — nurses, doctors, dentists, therapists and billing professionals — who encounter fraud on the job.  Do such health care workers violate HIPAA by disclosing patient protected health information (“PHI”) when blowing the whistle?  There is no need for them to do so.  […]

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“Right GAAP” and the move to IFRS

September 3, 2010

Whenever “risk-management” professionals characterize their prognostications as near-certain, I get nervous.  Memories of the Berlin Wall, Black-Scholes, Long-Term Capital Management, Salomon Brothers and AIG dance before my eyes.  Today’s exhibit A: Bruce Pounder’s September 2, 2010 CFO.com article, “Why the SEC Won’t Flip the IFRS Switch.” Pounder’s “most significant” point — that “for the SEC […]

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SEC settles Dell fraud case: Execs pay millions

July 26, 2010

Is the SEC on a roll or just looking over its shoulder at salivating securities whistleblowers? On the heels of settling with Goldman Sachs last week for $550 million, the SEC yesterday announced its $111+ million take from settling accounting fraud charges against Dell Computer and several current and former Dell executives including Michael Dell, […]

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SEC-Goldman settlement driven by H.R. 4173?

July 24, 2010

Was it mere coincidence that the SEC suddenly settled with Goldman Sachs for $550 million — a figure widely seen as a fraction of what Goldman should have paid — on the same day, July 15, 2010, that the new SEC whistleblower bounty program finally passed both houses of Congress?

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Dodd-Frank H.R. 4173 now before the Senate

July 15, 2010

The leviathan Dodd-Frank bill, newly renamed the “Restoring American Financial Stability Act of 2010,” has been taken up by the Senate.  On CSPAN-2, Hawaii Senator Daniel Akaka is now droning on about how “too many investors don’t know the difference between a broker and investment advisor.”  Note well:  Both “Wall Street Reform” and “Consumer Protection” […]

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Dodd-Frank: SEC Whistleblower Facelift

July 8, 2010

Thinking of blowing the whistle on securities fraud?  Thanks to the  Dodd-Frank Restoring American Financial Stability Act of 2010 (H.R. 4173), it now makes financial sense to consider it. Securities whistleblowers may not have much company in cheering H.R. 4173 but Section 922 is a major improvement over the largely non-functional anti-retaliation provisions of the old […]

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Michael Mann v. Ken Cuccinelli: Is Academic Freedom a License to Lie?

July 6, 2010

Does “academic freedom” include the right to falsify data in government grant applications? One might think so, to hear Rachel Levinson Waldman, senior counsel for the American Association of University Professors. She (and 810 Virginia professors) have objected to Virginia Attorney General Ken Cucinelli’s civil investigative demand or “CID” (shown below) that the University of […]

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SCOTUS to SEC on PCAOB: “Fire at will!”

June 28, 2010

With today’s SCOTUS decision in Free Enterprise Fund v. PCAOB, the Public Accounting Oversight Board (“PCAOB”) survives but with less swagger and self-importance than before.  This decision holding unconstitutional the “dual for-cause limitation” on the President’s ability to fire PCAOB members leaves the PCAOB’s form intact but downgrades its political independence.

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