• BofA Denies It Misled on Merrill Bonuses – In other words, piss off. [WSJ]
• Swine Flu May Cause 90,000 U.S. Deaths, Report Says – We’re looking forward to hysterical 24 hour swine flu coverage again. [Bloomberg]
• Bureau of Prisons Denies Madoff Has Cancer – Chest hair removal and getting high is definitely accurate though. [DealBook]
• Philadelphia Eagles Pass on $10k Tax Credit for Hiring Ex-Convict Michael Vick – That explains it. [TaxProf Blog]
• IRS Could Target Off-Shore Hedge-Fund Investors Next ‘Expect U.S. investors in off-shore hedge funds in places like the Cayman Islands, who failed to properly report earnings to the IRS, to be the next target of U.S. tax authorities’ [WSJ]
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KPMG Can’t Get Rid of the Countrywide Rash
As you probably remember, Countrywide Financial once owned a lot of shitty mortgages. This wasn’t clear to many of the company’s investors so when the things turned sour, lots of those investors lost boatloads of money and then Bank of America came in to pick up the scraps. KPMG was the auditor of Countrywide and the shareholders sued both companies because, gosh, that’s basically what happens when a bunch of money is lost for no good reason and you had a front row seat for the action. Accordingly, the two firms settled with CTW shareholders last year for $624 million. KPMG, for its part, chipped in $24 million. That’s rumored to be in the ballpark of what John Veihmeyer spends every year on Notre Dame gear, so the firm was probably thinking it got off pretty easy. Unfortunately, things are just getting started since other countries hadn’t had a chance to jump into the mix.
From Zero Hedge:
Norway’s Government Pension Fund, which is another name for its Sovereign Wealth Fund, has just announced it is suing Bank of America for mortgage fraud. Not only that but it is also going after Countrywide, obviously, but far more importantly, is also suing KPGM [sic], the auditor on the Countrywide transaction, and, drumroll, ole’ Agent Orange himself [That’s former Countrywide CEO Angelo Mozilo for those of you not up to speed].
So what, you say? Norway is just some Scandinavian wasteland with a lot of blondes and the occasional psychopath? Not the point!
[J]ust like the US lawsuit spigot opened ever so slowly at first, it is now gushing, and is absolutely certain that every company (ahem insolvent German banks) that ever bought a mortgage from Countrywide, Merrill and Bank of America will serve the local branch of the bank with a summons over the next month.
In other words, this little breakout may turn into a full-fledged epidemic.
Bank Of America’s Legal Woes Go Global After Norway’s Sovereign Wealth Fund Sues For Mortgage Fraud [ZH]
Also see:
The Fund suing large bank in the U.S. for fraud [DN.NO (Beware, the translation is brutal)]
What if Accounting Firms Had Their Own Version of WikiLeaks?
We were a little surprised to learn that both KPMG and PwC had brief mentions in the WikiLeaks cables, however it is far less surprising that they were quite humdrum and didn’t bring anything new to light.
[…]
Wikileaks also published (09LONDON2598, for official use only, originating from U.S. Embassy in London, created November 11, 2009) KPMG’s sceptical reaction on the Queen’s opening speech in Parliament on November 18, 2009, where Her Majesty sets out one of the priorities for new legislative session – to develop a new Financial Services Bill, requiring form systemically important banks to establish plans for recovery and resolution, that ensure banks’ financial continuity, later called by journalists “living wills”.
Like we said – meh.
Now, what happens within a Big 4 or other large accounting firm is rarely a matter of national security (Francine may disagree with us) but there’s little doubt that firm CEOs, partners and other notables have said things that would range from the slightly embarrassing to the absolutely mortifying. Consequently, reactions to those statements would also range widely from mere chuckles to ”OH NO YOU DI’INT!” Because our imagination has a tendency to run wild, we’ll dispel a few of our own scenarios that we imagine being in the Big 4/mid-tier version of WikiLeaks:
• Prior to the unveiling, Bob Moritz emails Tim Ryan, “Between you and me, the new logo looks like a half-finished Lego™ project.”
• Barry Salzberg and Jim Quigley are known inside some Deloitte circles as “Team Propecia.”
• After the OT loss to Michigan State, John Veihmeyer is so upset that he sends an email to Henry Keizer stating, “THAT’S IT! NO RAISES THIS YEAR.” Keizer responds to JV, reminding him that ‘if that punk Jimmy Clausen had stuck around’ they wouldn’t be in this situation and he shouldn’t take it out on the firm’s employees.
• Emails between two Ernst & Young partners in Jericho, reveal that they’ve been hoarding the extra bathroom keys because they can’t stand asking the receptionist.
• Various Deloitte partners are quaking because it is common knowledge that Arnie and Annabel McClellan have an elaborate spreadsheet detailing their various fetishes.
• In numerous exchanges Stephen Chipman begs Ed Nusbaum to let him ‘drop this ridiculous accent’ just like Ross did on Friends.
• High-level executives at McGladrey considered putting ecstasy in the punch so people would be happier but ultimately decided against it (Phoenix/Vegas went their own way) because it would have resulted in too many accountants dancing for no apparent reason.
• Jack Weisbaum = The Most Interesting Man in the World. (Just like several actual WikiLeaks, everyone knew this to be true but it was not discussed openly.)
Perhaps you have your own theories or documentation regarding other exchanges. Please share with the group at this time or email us.
Cheaters at PwC Canada Thought Sharing Answers With Each Other Was “Collaborative Culture”
Last week, CPA Ontario announced a settled disciplinary matter with PwC Canada, the matter being […]