October 4, 2022

ANR: KPMG Fires L.A. Partner for Passing Insider Info; Judge Tosses Longtop Fraud Claim Against Deloitte; IRS Giving Free Lunch Getting a Second Look | 04.09.13

KPMG Fires a Senior Partner in an Insider Trading Episode [NYT]
KPMG said late Monday night it had fired a senior partner in its Los Angeles office after learning that he had provided inside information to an unnamed individual “who then used that information in stock trades involving several West Coast companies.” The audit firm, one of the Big Four, did not name the partner. It said that as a result of the discovery it had resigned as the auditor of two companies, “after concluding today that the firm’s independence has been impacted as a result of this individual’s behavior.” The firm did not name the companies, but added, “We have no reason to believe that the financial statements of these companies have been materially misstated.”

Deloitte's China unit wins dismissal of fraud claim over audit [Reuters]
 A China unit of the accounting firm Deloitte Touche has won the dismissal of a securities fraud claim over its audit of Longtop Financial Technologies Ltd, which has been accused by federal regulators of failing to file accurate financial statements. In an opinion issued in federal court in Manhattan on Monday, U.S. District Judge Shira Scheindlin dismissed a claim against Deloitte Touche Tohmatsu CPA Ltd (DTTC) brought by investors in Longtop, who alleged that the accounting unit issued audit opinions giving Longtop a clean bill of health even though it was aware of potential red flags. Scheindlin concluded that the investors, who purchased American Depository Shares of Longtop on the New York Stock Exchange, had not met the pleading requirements under federal securities law.
 
Sen. Max Baucus moves to reshape tax code [WaPo]

Senators arrived in a Finance Committee conference room to find crystal bowls filled with green and white M&Ms imprinted with pictures of President Ronald Reagan, as well as Democratic Rep. Dan Rostenkowski and Republican Sen. Bob Packwood, the committee chairmen who engineered the last tax overhaul, in 1986. They found a detailed schedule of 10 more meetings, where committee staff members will present option papers for achieving such popular goals as simpler filing rules. And they found Baucus in emphatic agreement with Sen. Orrin G. Hatch (Utah), the ranking Republican on the panel, according to notes taken by a Democratic aide in attendance, that the committee should aim to produce a tax-reform plan by August, when Congress will once again need a face-saving deal to justify raising the legal limit on the $16.8 trillion in federal debt. The move throws Baucus, a conservative maverick who often infuriates Democratic leaders, into uneasy contention with his more liberal colleagues to shape the next phase of the federal budget battle. With Republicans and Democrats advocating vastly different plans for getting the nation’s debt under control — and the White House due this week to offer a proposal — Baucus argues that his committee is best positioned to forge a bipartisan compromise and avoid another economy-shattering showdown.

FDIC Fires Back At PwC's Bid To Dodge $1B Negligence Suit [Law360 (Subscription)]
The Federal Deposit Insurance Corp. on Monday pushed back against PricewaterhouseCoopers LLP’s bid to toss the FDIC's suit over Colonial Bank's $1 billion loss in the Taylor Bean & Whitaker Mortgage Corp. mortgage fraud scheme, saying the auditor’s interpretation of the U.S. Supreme Court’s O’Melveny & Myers decision is faulty.

E&Y's Lloyd’s of London audit put out to tender [Accountancy Age]
Lloyd's, which made pre-tax profits of £2.77bn last year, said it was "satisfied" with E&Y's performance as auditor but that the audit should be subject to a competitive tender during 2013 "as a matter of good governance", the market stated in its 2012 annual report.

Silicon Valley's Mouthwatering Tax Break [WSJ]
When outsiders visit Silicon Valley, the first thing they often notice is the food: Cafeterias brimming with free gourmet meals and snacks offered to employees of Google Inc., Facebook Inc. and other technology firms. But not all is as it seems in the buffet line. There is growing controversy among tax experts about how to treat these coveted freebies. The Internal Revenue Service also has been focusing on the topic, according to attorneys who practice in the area, examining whether the free food is a fringe benefit on which employees should pay additional tax. Tax rules around fringe benefits are complex, but in general they categorize meals regularly provided by an employer as a taxable perk, similar to personal use of a company car. That leads several tax experts to wonder if some companies providing free food may be skirting the rules. "I clearly think it ought to be taxable income," said Martin J. McMahon, Jr., a tax-law professor at the University of Florida, who argues that in most cases the meals are really part of a compensation package.

New York’s Highest Court Affirms Constitutionality of Click-Through Nexus [Tax Trials]
That's fancy talk for the Amazon Tax.

Louisiana Governor Jindal Sets Aside Tax Reform Proposal, Urges Legislature to Develop One [TF]
FINE! YOU DO IT. 

Witnesses: Man drove 90 mph with genitals hanging out the window [WJHL]
"After the waving, it turned into a lot of beeping, him grabbing his chest area, and asking me going 'please, please' (clasping hands together) with his hands, may I… show me yours," witness Kelly Street said. […] "At over 90 miles per hour, he had his penis out [the window]… he was masturbating… and that's when it got really, really bad. I wouldn't look over any more, and I wrote his tag number down on my hand, which I believe he noticed, and he exited very quickly," Street said. Detective Terry Christian says it's Street's writing down of the license tag number that served as a catalyst for William Blakely's charges. "It went on for so long an nobody's addressed it," Christian said, referring to the dozens of phone calls the department has received over the course of three or four years – she said, related to Blakely's behavior. Ages of the alleged victims range from 16-65.

 

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