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Accounting News Roundup: The [dot]CPA Domain and Insider Trading | 09.08.17

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What’s the AICPA up to?

“Congressmen concerned about misuse of .cpa domain” is an Accounting Today headline and sure, I suppose some members of Congress don’t have anything better to do. The issue in this case is that the AICPA has been trying to secure “.cpa” as a generic Top-Level Domain (“gTLD”) string for a few years. There’s been some concern, however, from the Internet Corporation for Assigned Names and Numbers (“ICANN”) that the .cpa domain could be used with sinister intentions:

In a letter last month, the lawmakers pointed out that a 2013 communique by ICANN’s Governmental Advisory Committee identified several domain extensions connected to regulated or professional sectors, including the accounting profession. “The GAC recognized that ‘these [gTLDs] are likely to invoke a level of implied trust from consumers, and carry higher levels of risk associated with consumer harm,’” they wrote. “Further, the communique highlighted that gTLDs such as ‘.cpa’ could be used to deceive consumers of CPA services in the United States and around the world if granted to those outside the global CPA community.”

Maybe I’m reading too much into this, but my hunch is the AICPA put these members of Congress up to this. It took me only a minute or so to find this 2015 letter from the AICPA  to ICANN complaining about “unfair and prejudicial consequences” of the decision to “defer consideration of AICPA’s December 2014 Change Request.” There’s been more correspondence and whatnot, but ultimately things have gone nowhere. Ultimately, it seems the AICPA wants to be the master of their domain, but there are lots of hoops to jump through and lots of cajoling to be done. Since they’ve had no luck so far, the AICPA has finally called in the big guns to put pressure on ICANN, making the case that tight controls around who gets a .cpa domain are necessary.

Which is fine! I guess wrangling over these things is part of what the AICPA does. It is interesting, I think, that it’s gotten to the stage where they’ve decided to tag in their pals from Congress.

Insider trading

Although not strictly accounting-related, every once in awhile, an insider trading settlement is worth sharing for nothing else but its wonderful irony. Today it’s the case of a former Amazon financial analyst (maybe a fancy accountant?) and his former fraternity brother who were stars of an SEC Litigation release yesterday:

The SEC alleges that Brett Kennedy accessed nonpublic 2015 first quarter earnings information without authorization while working at Amazon and shared it with Maziar Rezakhani, who illegally traded on the financial results before their public release to make more than $116,000 in illicit profits. According to the SEC’s complaint, Rezakhani paid Kennedy $10,000 in cash for the tip and also shared the trading profits with Sam Sadeghi, who was advising him on his brokerage account trades and joined Rezakhani at a meeting with Kennedy to discuss the nonpublic information. The SEC’s complaint alleges that Rezakhani and Sadeghi aimed to establish a successful track record with the trading in Rezakhani’s brokerage account and together open a hedge fund in New York that would accept investments from others.

Ah, yes, nothing shatters big hedge fund dreams quite like trading on material, non-public information. The best part is this, however:

According to the SEC’s complaint, Rezakhani boasted on at least two trading-related internet communication platforms in the days leading up to Amazon’s earnings announcement that he was predicting first quarter revenue of $22.7 billion and earnings per share of -$0.12, writing that the “numbers are so obvious” that a “5 year old can guess what they will do.”

Yes, even 5-year-olds who steal the answers to the test can score a 100%. It won’t surprise you that Rezakhani is already doing time for an unrelated fraud conviction.

By the way, who at the SEC makes sure the most amusing and/or embarrassing bits of information from each investigation are put it into the communication for the outside world? If I ever decide to go into public service, I am finding that job.

Previously, on Going Concern…

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Image: iStock/jejim