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ANR: Corzine in Trustee’s Crosshairs; Deloitte Investigating Indiana’s Lost Tax Revenues; Nazis and Tax Policy Rhetoric Don’t Mix | 06.05.12

MF Global Autopsy Flags Risks by Corzine [WSJ]
A bankruptcy trustee blamed former MF Global Holdings Ltd. Chief Executive Jon S. Corzine for events leading to the financial firm's collapse, saying he may pursue legal claims against the former financier for ramping up risks and failing to safeguard money belonging to customers. James Giddens, the trustee trying to recover money for the company's U.S. brokerage unit, said in a 275-page report Monday that he may pursue claims of "breach of fiduciary duty and negligence" against Mr. Corzine and other officials at the firm for revving up the firm's risk-taking appetite without improving controls needed to keep customer funds safe. He cited Mr. Corzine's giant trading bets and failure to put systems in place to prevent improper transfers of customer money. Monday's highly anticipated report was the most detailed autopsy yet of MF Global, which filed for bankruptcy protection on Oct. 31. The firm's customers still are owed an estimated $1.6 billion.

UK needs new accounting rules for banks – BoE's Haldane [Reuters]

Britain needs separate accounting rules for banks to allow investors and regulators to properly evaluate risks, as trying to do so now was like trying to "pin the tail on a boisterous donkey", a senior Bank of England official said. International Financial Reporting Standards (IFRS), which set accounting methodology, give a "hit and miss" view of the solvency of banks, Andrew Haldane wrote in this month's edition of the accountancy and business magazine Economia. Haldane, the Bank of England's executive director for financial stability, said Britain's accounting rules were so badly flawed that getting an accurate view of a bank's assets was like trying to "pin the tail on a boisterous donkey".

Deloitte chosen to audit Indiana Department of Revenue [FWJG]
Administration officials, with input from legislators, have selected financial firm Deloitte to handle an audit of the Indiana Department of Revenue after uncovering more than $500 million in financial miscues since December. “It was a consensus decision,” State Budget Director Adam Horst said. New York-based Deloitte will first perform a risk assessment to determine the likely weaknesses in the system and what internal controls require focus. The cost of the assessment will be less than $250,000.

'Zombie' companies holding back UK economy, says Ernst & Young [Telegraph]
Britain's recovery is being held back by a wave of "zombie" companies that should be allowed to fail but are instead undermining capitalism, according to Ernst & Young. The accountant said that the financial crisis had created an environment where it is "too difficult to fail", with businesses being kept afloat to the detriment of the broader economy. As a result, so-called "financially undead" companies are clinging on, despite the recession, making markets and the economy inefficient. "The expected jump in the number of companies falling into administration has not materialised," a report by E&Y said.
Filmmakers Shoot for Breaks [WSJ]

Declining theater attendance and crumbling DVD sales have squeezed profit margins in the movie business, making tax breaks an essential part of producers' calculations about where to film. Supporters of states' tax-incentive programs say that every dollar spent directly on a film production results in $5 to $6 in spending at hotels, restaurants, caterers and other contractors—making the incentives an inexpensive stimulus for local economies. Critics of the programs say such "multiplier effects" are overblown and that tax breaks often function as rewards for activity that would have taken place anyway, rather than true incentives. "In the harsh light of reality, film subsidies offer little bang for the buck," argued a 2010 report from the left-leaning Center on Budget and Policy Priorities.
Loose Talk About Nazis and Tax Policy [ Thorndike]
An analysis from Joe Thorndike.
Former bath-salts addict: 'It felt so evil' [CNN]

The man is strapped onto a gurney and restrained, yet he is singing, making faces and twitching. "You know where you're at?" a paramedic asks him, but Freddy Sharp can't answer. He was, he explained later, off in his own world after overdosing on synthetic drugs known as "bath salts." "I'd never experienced anything like that," Sharp told CNN's Don Lemon. "It really actually scared me pretty bad." He said he was hallucinating about being in a mental hospital and being possessed by Jason Voorhees, the character from the "Friday the 13th" movies. "I just felt all kinds of crazy," said Sharp, now 27, of Tennessee, who says he hasn't used bath salts in months. "It felt so evil. It felt like the darkest, evilest thing imaginable."


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