SocGen, Kerviel & True and Fair View

March 11, 2008

Yesterday, in response to Floyd Norris, I offered what may fairly be read as a “clean opinion” on Societe Generale’s use of the IFRS “true and fair view” override to report in 2007 (instead of 2008) its net loss from the Kerviel debacle. Mr. Norris today responded with his entry, “Defending SocGen.” Truth is, my […]

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Société Générale sets Floyd Norris in orbit over IFRS

March 10, 2008

When it comes to IFRS, some Wall Street pundits need to breathe into a paper bag. Last week, Floyd Norris (pic, left), in his NYT piece, “Loophole Lets Bank Rewrite the Calendar,” did all he could to ignite “a debate over how well international accounting standards [known as “IFRS”] can be policed in a world […]

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Surgeon Whistleblower Moves the Ball on Tuomey Regional

March 3, 2008

Sumter, South Carolina orthopedic surgeon Michael Drakeford’s qui tam suit — originally filed in 2005 against Tuomey Regional Medical Center — is moving forward, according to recent reports by The State.com and Modern Healthcare Online. Dr. Drakeford was the original plaintiff. However, as is typical in whistleblower cases, the U.S. Justice Department has “intervened” as […]

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IFRS for U.S. by 2010?

February 20, 2008

In a previous entry, I highlighted the SEC’s movement to require U.S. companies to prepare their financial statements using International Financial Reporting Standards (a.k.a. “IFRS”).* In that entry, I speculated that the transition to IFRS would be rapid but didn’t offer a specific timeline. Having parsed more closely some of Chris Cox’s comments at a […]

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Lerach, S-corps & the Savvy Guy Syndrome

February 11, 2008

Today, attorney William Lerach was sentenced to two years in the federal pen for obstructing justice and making false statements. He once won a $7 billion judgment against Enron for . . . (drum roll) making false statements. It’s a classic example of what I call the “savvy guy syndrome,” a behavioral disorder in which […]

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When your stock falls, expect an insider-trading investigation

February 5, 2008

On top of everything else, Société Générale now faces European and SEC investigations into possible insider trading. Today’s Wall Street Journal headline reads “SEC Probes French Bank: U.S. Investigation of SocGen Focuses On Stock Sales.” When a publicly traded stock falls dramatically, you can expect market regulators to begin trolling for impropriety in trades by […]

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Coming to America: IFRS for U.S. companies

February 1, 2008

Most corporate accounting and finance people are heavily engaged this time of year slogging through audits and preparing data for tax returns. The furthest thing from their minds are huge changes in accounting standards now lurking at the SEC. And I don’t mean the Southeastern Conference.

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Wanted: A Whistleblower Statute for Bank & Securities Fraud

January 28, 2008

The case of French bank Société Générale, in which a single trader’s off-the-reservation trades cost the bank €4.9 billion ($7.2 billion), highlights a systemic control weakness in global financial markets. No system of regulation, operated from outside and above individual companies can be expected to corral determined fraudsters on a timely basis. Friday’s Wall Street […]

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Fed Soothing Markets?

January 22, 2008

When the WSJ Online runs a headline like the one below, you can be pretty sure that whatever the Fed has done hasn’t soothed the markets. More soothing news at the Wall Street Journal Online.

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When the Dow Drops, Expect a Flood of Fraud Claims

January 22, 2008

Today, the DOW Jones Industrial Average temporarily fell 465 points, roughly 3.8% of Monday’s close.  When the market falls like this,  lots of shares will have sold at a loss, locking in investor “damages” equal to the original purchase price minus the sale price.  Company executives, boards and auditors should brace for impact as the […]

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