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Accounting News Roundup | 02.07.12

Stanford used fake accounting to back bank: witness [Reuters]
Allen Stanford used fake accounting to prop up his offshore bank in its waning days, as withdrawal requests from investors poured in, Stanford's former top deputy said on Monday. Faced with a worrying number of withdrawals in 2008, Stanford came up with a plan to make a $600 million capital infusion into the bank, said James Davis, Stanford's former chief financial officer and the government's top witness.

Pension Fund Asks Class Status in Lehman Auditor E&Y Suit [Bloomberg]

 The Alameda County Employees’ Retirement Association asked a judge to certify a class-action lawsuit against Lehman Brothers Holdings Inc.’s former auditor Ernst & Young LLP over investment losses. The retirement system is seeking to lead the group suit on behalf of investors who lost money on bankrupt Lehman’s common stock and options, it said in a court filing. Ernst & Young helped to mislead investors by making false and misleading statements in regulatory reports about Lehman’s finances before its 2008 bankruptcy, the retirement system alleged in the Feb. 3 filing. The investors originally sued Lehman, former executives including ex-Chief Executive Officer Richard Fuld and underwriters, adding Ernst & Young as a defendant in 2010. Since then, they have settled with many defendants — Fuld and other Lehman executives used a $90 million insurance payment to pay for the accord — while continuing to litigate against Ernst & Young and a UBS AG unit that sold Lehman structured products, according to the filing.
Ron Paul: ‘I’d Really Like to Repeal 1913′ [WSJ]
Rep. Ron Paul frequently calls for repealing this law or eliminating that federal agency in his stump speech for president. The Texas Republican went further on Saturday, calling for the elimination of a whole year. Mr. Paul, appearing at a campaign rally in Rochester, Minn., singled out 1913 for his ire, garnering loud applause from a standing-room only crowd of more than 300 at a high school here. “I would like to repeal the Federal Reserve charter, but I’d really like to repeal 1913. We could get rid of the income tax, and the Federal Reserve and the foreign policy,” Mr. Paul said, his comments drowned out by the cheering crowd.
Facebook Gets an “A” in Financial Reporting [GOA]
Empahsis belongs to the Grumpies: "[W]hat motivates two Grumpy Old Accountants who are notoriously stingy for giving out A’s to their students to award Facebook this grade?  Simple: financial reporting transparency.  No games, no hype, no spin; just quality, detailed, investor-relevant disclosures not commonly found in most internet company IPO filings.  Facebook even went the extra mile to report in detail the not so flattering stuff…what an interesting concept: honest reporting. 
Accounting Posts New Record Jobs Number [CPAT]
973,400, being the number.


“Another Guy In A Chicken Suit Spotted At RBS” [DB]
For your consideration this busy season.


Posted in ANR