September 25, 2022

Accounting News Roundup: Corzine’s Dilemma; Zynga’s 10-K; Grant Thornton’s New Head of Tax | 03.26.12

MF Global’s Corzine May be Liable if Customer Risk Known [Bloomberg]
The ex-Goldman Sachs Group Inc. (GS) co-chairman gave “direct instructions” to move money from a U.S. account to meet an overdraft with JPMorgan Chase & Co. (JPM) just days before MF Global’s bankruptcy, according to a memo by congressional investigators. Such accounts may have contained assets belonging to both customers and MF Global. The U.S. Department of Justice and federal regulators are investigating the firm’s Oct. 31 collapse. Corzine, a Democrat from New Jersey who served in the U.S. Senate and as governor, told Congress last year he never directed customer funds be used improperly. Though showing he deliberately used customer money would be the key to a criminal case, former prosecutors said Corzine, who hasn’t been charged with any wrongdoing, could be deemed liable in civil cases for misuse of customer money simply for ordering the hole in JPMorgan’s account plugged, if it turns out customer funds were used. “It’s not whether he specified,” John Moscow, a former chief prosecutor in the office of Manhattan District Attorney Robert Morgenthau, said yesterday in an interview. “The economics of the situation were he was out of money. The bottom line is, he was taking a risk with somebody else’s money.”

Health Law Heads to Court [WSJ]
In taking up President Barack Obama's health overhaul Monday, the Supreme Court wades into an issue that not only could sway this fall's elections but also could help define for generations what Congress is and isn't entitled to do. The court this week hears three days of arguments on the law's constitutionality, with a ruling expected in late June. The administration and its allies say the court must uphold the law to ensure that Congress can tackle national problems by employing comprehensive solutions. In jeopardy, critics say, is the fundamental American conceit that the federal government should be restricted in what it can require of citizens.

Zynga's First 10-K: Zestful Zephyrs [GOA]
The Grumpies investigate the method behind the madness of the company that brought you Farmville.

How to Put More Distance Between Banks and Their Auditors [American Banker]
FM: "Audit committees could be forced to put the audit out to competitive bid every seven to 10 years or so, with a "comply or explain" regime that requires disclosure about the decision to switch firms or retain the incumbent. That would likely push audit committees, and the CFOs and CEOs who inappropriately influence them at times, out of their comfort zone. Audit firms may even quit more often when company executives try to bully them rather than rolling over and playing dead. It’s always better to walk out on your own terms than be kicked out."

SNC-Lavalin says CEO quits; finds accounting issues [Reuters]
SNC-Lavalin Group Inc said its Chief Executive Pierre Duhaime resigned after the company said it had identified material weaknesses in its internal control over financial reporting. In February, the Canadian engineering and construction company had said it expected to record payments of about C$35 million "relating to certain payments" in the fourth quarter that were linked to construction projects that were unrelated to the expenses. At that time, it had revealed a probe into the mysterious payments and warned that the impact of Libya's civil war would push its 2011 profit well below earlier forecasts. The news had stripped the company of almost 20 percent of its market value by early March. On Monday, the company said based on the findings of the independent review, it does not believe that these payments are related to Libya.

Griffith Named to Lead Grant Thornton’s Tax Services [GT]
Doreen Lilly Griffith becomes GT's National Managing Partner of Tax on August 1.

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