September 27, 2022

Accounting News Roundup: Bryan The Jeweler; Scott London’s Handicap; The Masters Tax Break | 04.11.13

Trader Who Received Tips From KPMG Partner Issues Apology [Bloomberg]
Bryan Shaw, a trader who said he received insider tips from fired KPMG LLP partner Scott London, apologized and said he’s been cooperating with the Justice Department and U.S. Securities and Exchange Commission. “During 2010 through 2012, I received non-public information from Scott London about a number of companies and then profited substantially from stock trades based upon that information,” Shaw said in a statement provided yesterday by Nathan Hochman, a lawyer at Bingham McCutchen LLP in Santa Monica, California. “I cannot begin to apologize for my incredibly stupid actions.” […] Shaw is listed in online business directories as a partner with Encino, California-based Shaw Diamond Co., a wholesale jeweler and diamond broker founded in 1957. “Over the past several months, I have fully cooperated with the FBI, the SEC, and the U.S. Department of Justice in their ongoing investigation of this matter,” Shaw said in his statement. “I expect that my actions will result in significant civil and criminal consequences, but I realize that this is the painful price I will pay for my transgressions.”

Tips Traded on Golf Course Led to KPMG Executive’s Downfall [DealBook, Earlier]
Both are members of the North Ranch Country Club in Westlake Village, Calif., according to the United States Golf Association Web site. Mr. London has a 10 handicap and Mr. Shaw plays to a 12, the U.S.G.A. says.
 
How Your Accountant Quits [WSJ]
David Weinberg, chief financial officer of sneaker retailer Skechers USA Inc., was working after lunch Monday when two senior partners from accounting firm KPMG appeared in his Manhattan Beach, Calif., office. The men sat down in a conference room. The KPMG partners read from a prepared statement, answered a few questions, then left. The whole episode took less than 45 minutes.
 
After KPMG, Audit Firms Reconsider Procedures [DealBook]

James D. Cox, a securities lawyer at Duke University, called the case a “bombshell that has the industry circling the wagons on training.” The profession, he said, “suffers from an acute case of schizophrenia. They drink the tea about being professionals, but the other side is that they identify all too closely with their clients.” […] The sector has already been under scrutiny, particularly after the accounting scandals of the last decade. A proposal by the Public Company Accounting Oversight Board, which regulates the profession, would require accounting firms to disclose an engagement partner’s name on a client’s audit reports and other papers. After the KPMG case, that could gain new support. The accounting oversight board would take up the matter “within the next three to six months,” said a board spokeswoman, Colleen Brennan. “I can envision that the KPMG case will be used to promote a listing of the names,” said Charles D. Niemeier, a former board member now in private practice at the law firm Williams & Connolly.

Split FASB Proceeds With Complicated Lease Standard [CW]
In a regular weekly board meeting, FASB voted 4-3 to issue the package it has developed after years of re-deliberating its 2010 proposal. At least two board members said they planned to include alternative views, or different ideas on how to approach lease accounting. The board has struggled long and hard over how to develop a logical approach to account for the wide variety of leases companies typically enter, with some resembling the financed purchase of assets and others serving more as short-term rental agreements.

The Masters: A Tax Break Unlike Any Other [Forbes]
Will Phil Mickelson be so put off by the idea of having to pay oppressive new tax rates on the $1.5 million winner’s purse that he’ll start purposely firing balls into the water a la Roy McAvoy in Tin Cup? Regardless of who sits atop the leaderboard on Sunday afternoon, however, understand that some of the biggest winners of the weekend will have never lifted a club. That’s because courtesy of a tax break that’s steeped in Masters history, dozens of local residents will be pulling in upwards of $25,000 in tax-free cash over the course of the four-day tournament by renting their homes to visiting spectators.

Why Transparency Is Like Porn [Tax Analysts]
Christopher Bergin: "
We want to end abuse of the corporate tax system by companies shifting profits around, and, we want to do it in a transparent way. What should we do? I've got it! Get rid of the hidden deals facilitated by [advance pricing agreements]. I mean, you can’t get any more non-transparent than completely secret."
 
Teen daughters find strength to lift 3,000-pound tractor off father [NBC]

Jeff Smith of Lebanon, Ore., was trying to pull a stump out of his garden last Monday when his muddy boot slipped off the clutch. The tractor flipped, and the steering wheel pinned his chest to the ground. The daughters, 16-year-old Hannah and 14-year-old Haylee, heard him screaming and ran to help. They reportedly lifted the tractor enough to free his torso and give him room to breathe. “It’s amazing. You hear about this kind of stuff — this adrenaline rush, being able to pick cars up and slide people out,” Smith told KGW, the NBC affiliate in Portland. “You never realize it’s really there until you actually witness it.” The girls tried to dig their father’s arm out but struck compacted dirt. Hannah got on her four-wheeler and found a neighbor, who brought his own tractor and used its shovel to finish freeing Smith, the Albany Democrat-Herald newspaper reported. Smith was treated at the hospital for a broken wrist and other injuries. Hannah said she called her mother before the ambulance ride. The mother thought it was an April Fool’s joke.

 

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