Warren Buffett’s Berkshire Hathaway Inc. (BRKA, BRKB) took an accounting charge to reflect the declines of three stocks in its investment portfolio after regulators asked about the company’s policy for writing down investment losses. But Berkshire Chief Financial Officer Marc Hamburg complained that the current stock prices don’t reflect the worth of the shares, and predicted in a letter to the U.S. Securities and Exchange Commission that “each security’s market price will grow to at least the intrinsic value that existed” when Berkshire made the investments. [Dow Jones]
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Grant Thornton Survey Shows That CFOs Might Be Ignoring the SEC’s XBRL Deadline
It has been well established in these pages and elsewhere that the SEC has had its share of problems. Take your pick: 1) missing the biggest financial fraud in the history of the world 2) hiring an army of porn-addicted accountants and lawyers to protect our markets 3) waffling on IFRS 4) did we mention missing huge frauds?
To be fair, the Commission has been working hard to redeem itself by cracking down on dubious activity (from Goldman to Overstock), hiring more fraud experts and giving those tranny porn-obsessed employees a second chance.
Regardless of the turnaround-in-progress, CFOs in this country seem to have ceased taking the SEC seriously. Sure the 10-Ks and Qs still get filed but those were in place long before the wheels fell off.
In a recent survey, Grant Thornton found that, despite a SEC deadline for public companies to utilize eXtensible Business Reporting Language (XBRL), a fair amount of CFOs don’t seem all that worried about reporting their financial statements using the technology:
64 percent of public companies do not currently report financial results using eXtensible Business Reporting Language (XBRL); and of those, half have no plans to in the future even though the SEC mandated that public companies have to report their financials using Interactive Data by 2011.
“It’s concerning that almost a third of public companies still have no plan on using XBRL to report their financials despite the requirement that all public companies comply with XBRL filing requirements by mid-year 2011,” said Sean Denham, a partner in Grant Thornton’s Professional Standards Group and a member of the AICPA’s XBRL Task Force. “I foresee a lot of companies playing catch up as the 2011 SEC deadline approaches.”
Whether this lack of action can be attributed to defiance, fear of technology, or pure laziness is not explained but we wouldn’t rule out the possibility that the SEC has an outright mutiny on its hands.
A third of public companies have no plans to use XBRL – despite SEC mandate requiring XBRL use by 2011 [GT Press Release]
Also see: XBR-Lax [CFO Blog]
Some People Aren’t Too Concerned About the Walgreen CFO’s Second DUI
Yesterday we shared with you the unfortunate tale of Walgreen CFO Wade Miquelon picking up his second DUI in just over a year. While Mr. Miquelon is obviously responsible for his own actions, this whole mess could have been avoided if WAG would just splurge a tad and get him 24/7 car service. Sure you might catch some shit from Footnoted but isn’t that better than people getting hurt?
Anyhoo, most of the coverage on this story is in and around Chicago but naturally, analysts that cover the company were asked about the whole ordeal and frankly, since jumping behind the wheel after a few highballs doesn’t seem to have any effect on Wade’s professional capacity, it’s really NBD:
Dereck Leckow with Barrington Research […] sees no reason for investors to be concerned.
“Certainly, it’s rather embarrassing, but he’s not been found guilty of anything at this point,” said Leckow.
“At this point in time, it’s not something to be concerned about,” he concluded. Leckow has an “Outperform” rating on Walgreen shares and a $46 price target.
The risk for investors, if anything serious were to result from the latest charge, is that Miquelon is regarded as key to restructuring that’s been going on at Walgreen.
“Wade has been very valuable for the company’s cost-reduction efforts,” observes Scott Mushkin of Jefferies & Co. “If there were any problem that would take him away from his responsibilities at Walgreen, that would be a negative,” said Mushkin.
As we noted yesterday, WAG isn’t commenting on this “personal matter” but some people are wondering aloud about Wade’s decision-making ability:
Companies have to disclose “events that occurred during the past 10 years and that are material to an evaluation of the ability or integrity” of an officer. This includes whether the person “was convicted in a criminal proceeding … (excluding traffic violations and other minor offenses),” according to the Securities and Exchange Commission.
So the question becomes when does such an issue stops being a “personal matter” and starts becoming a “material” one. And what does it say about a person who makes such repeated mistakes, risking himself and others in the process? Can shareholders trust him with running the finances of their company?
The answer is, it depends.
“Some companies might have disclosed the second arrest right away; some might have said something somewhere,” said Edward Best, a partner at law firm Mayer Brown. “Other companies could reasonably have concluded, ‘Hey, the guy still showed up Monday morning.’ He’s still able to fly to New York to meet with rating agencies, investors and bankers. It’s not a material issue.”
One thing is for certain – Miquelon is losing his license for three years effective November 10th, so Walgreen has a couple of weeks to arrange for that car service.
Walgreen: Street Unperturbed By CFO DUI Arrest [Barron’s]
Walgreen CFO Arrested on Drunk Driving Charges … Again [Daily Finance]
Walgreens CFO charged for 2nd time with DUI [Chicago Breaking Business]
Groupon’s CFO Should Quit
Last Friday, Groupon announced that some of their numbers weren't exactly up to snuff. This […]