Category: ANR

SEC Nearing Decision on Accounting Standards [WSJ]
The Securities and Exchange Commission this week cleared the way for a long-awaited decision on whether U.S. companies should switch to using global accounting rules. The SEC chief accountant’s office issued two fact-finding papers Wednesday about the use of the global rules, known as International Financial Reporting Standards. Those papers lay the groundwork for a recommendation from the SEC’s staff to the commissioners, expected by the end of the year, on whether they should move to IFRS and away from U.S. generally accepted accounting principles. The staff’s work “gives me the confidence that lets me know they are moving toward a decision,” said Joel Osnoss, Deloitte Touche Tohmatsu Ltd.’s global leader for IFRS.

Tax Spat Stymies Debt Panel [WSJ]
Days away from a deadline, Congress’s deficit-reduction supercommittee is stymied, stumped in large part by one of Washington’s seemingly unsolvable problems: What to do with the Bush-era tax cuts? Republicans are digging in against any agreement that does not extend current income-tax rates, which are scheduled to expire at the end of 2012.

Yelp Files for I.P.O. [DealBook, S-1]
Yelp, which makes the bulk of its revenue from advertising contracts with local businesses, is not yet profitable. Though revenue rose 79.9 percent, to $58.4 million for the first nine months of this year, the company recorded a loss of $7.4 million.

Fund Transfers Are Focus of MF Global Probe [WSJ]
Regulators have unearthed new details indicating MF Global Holdings Ltd. shifted hundreds of millions of dollars in customer funds to its own brokerage accounts in the days before its bankruptcy filing, according to people familiar with the matter. Such moves could violate regulations stipulating that commodities brokers can’t mix customer funds with brokerage funds. Brokerage funds often are used to back proprietary trading positions. According to MF Global’s internal records, the transactions were as large as hundreds of millions of dollars at a time, these people said.

Rule of 72? [Tax Update]
Please keep filing tax returns after your 72nd birthday.

Barnier’s audit reforms ‘might be delayed’ [Accountancy Age]
You know how things are.

Olympus Has Enough Cash to Keep Going Amid Probe, Takayama Tells Employees [Bloomberg]
Olympus Corp. (7733) has enough cash on hand to keep the 92-year-old company in business amid a probe of schemes to hide investment losses, President Shuichi Takayama told employees yesterday. “Continue focusing on your job and responsibilities. Our treasury section will take care of financing issues,” Takayama wrote in a posting on the company’s internal website, a copy of which was given to Bloomberg News. In a posting today, Takayama said hospitals are asking for details of the scandal before they ch one hospital canceling its purchase.

Ex-Olympus boss to meet Japanese police [FT]
Michael Woodford, the former Olympus president whose revelations about suspicious acquisitions by the camera maker precipitated a scandal over improper accounting, will return to Japan next week to speak with authorities investigating the case, the Financial Times has learned. Mr Woodford confirmed to the FT that next Thursday he would meet Japanese police, prosecutors and officials from the Securities and Exchange Surveillance Commission, Japan’s financial markets regulator, in his first trip to Tokyo since Olympus fired him on October 14.

Widespread Protests Planned [WSJ]
The newly homeless Occupy Wall Street activists on Thursday plan a citywide day of demonstrations, an event that will test both the movement’s resilience following its eviction from Zuccotti Park and the city’s ability to deal with the decentralized protests. Protesters plan to start early. At 7 a.m., some say they’ll try to march on Wall Street and disrupt the beginning of the work day. So far, a heavy police presence and a warren of barricades have kept protesters from holding serious protests on Wall Street. Others will gather in Zuccotti Park. In the afternoon, they’re urging people to gather at transit hubs in each of the five boroughs. They’ve also called for student walkouts.

GOP supercommittee members’ tax plan gives party an identity crisis [WaPo]
Growing Republican support for raising taxes to help reduce the deficit has prompted a GOP identity crisis, sparking a clash within the party over whether to abandon its bedrock anti-tax doctrine. Tensions have mounted in recent days as two of the GOP’s most fervent anti-tax stalwarts on Capitol Hill — Sen. Patrick J. Toomey (Pa.) and Rep. Jeb Hensarling (Tex.) — have lobbied party colleagues behind the scenes to forgo their old allegiances and even break campaign promises by embracing hundreds of billions of dollars in tax hikes.

With MF Global Money Still Missing, Suspicions Grow [NYT]
Nearly three weeks after $600 million in customer money went missing from MF Global, the search for the cash has been hampered by the bankrupt brokerage firm’s sloppy record-keeping, an increasingly worrisome situation that has left regulators frustrated and customers in the lurch.

USC Suspends Launch of its Graduate Tax Program [TaxProf]
The University of Southern California Gould School of Law has suspended the launch of its graduate tax program because of declining job prospects for tax LL.M. graduates in the Los Angeles area. USC Dean Robert Rasmussen reports that the school will continue to monitor the employment situation and will begin the program when it is confident that the career prospects of its tax LL.M. graduates would match those of its J.D. graduates. (USC’s business school continues to offer a Masters of Business Taxation.)

Fund-Raiser for Liu Is Accused of Role in Illegal Donations [NYT]
A fund-raiser for the New York City comptroller, John C. Liu, whose campaign finances are under federal investigation, was arrested on Wednesday morning on charges that he helped illegally funnel thousands of dollars into Mr. Liu’s campaign account, according to court papers and people briefed on the case. A criminal complaint unsealed on Wednesday says an undercover agent from the Federal Bureau of Investigation posed as a businessman seeking to donate $16,000 to an unidentified candidate for citywide office in New York. That candidate, the people briefed on the case said, was Mr. Liu.

Former Bowl Official Indicted [AP]
Natalie Wisneski faces charges of filing false tax returns for the Fiesta Bowl.

As New Graduates Return to Nest, Economy Also Feels the Pain [NYT]
You selfish brats need to get out there and stimulate the economy.

Purgatory for MF Global Customers [WSJ]
More than two weeks after MF Global filed for Chapter 11, some 33,000 customers are stuck in a sort of purgatory, with no access to their cash until a trustee liquidating the securities firm says they can get it. Late Tuesday night, the office of the trustee, James Giddens, in an apparent response to customer outcries, said he had sought court permission for a transfer of about 60% of the cash in about 21,000 customer accounts still frozen, or some $520 million. If he gains court approval, the statement said, distributions could be made within days. Earlier in the day,owledged customer “frustration” and sought court approval to expedite a claims process. A spokesman for the trustee said this week it is possible customers won’t get all their money back, due to the apparent shortfall at MF Global.

Olympus seeks to reassure lenders [FT]
Olympus is seeking to reassure its lenders that it has sufficient cash flow to repay its loans, in an effort to ensure continued financial support as it faces investigations into a cover-up of large losses related to past securities investments. Lenders including Japan’s three leading banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho – and country’s largest life assurer, Nippon Life, met with Olympus on Wednesday.

UK’s SFO launches formal Olympus probe [Reuters]
Britain’s Serious Fraud Office (SFO) has launched a formal investigation into more than $1.0 billion of obscure payments and acquisitions made by Japan’s Olympus Corp., a source familiar with the matter said.[…] Olympus’s former chief executive Michael Woodford, a Briton who fled Japan around a month ago after blowing the cover on around $1.3 billion in unexplained fees and non-core acquisitions, promptly handed reams of documents to the agency.

Paterno Passed On Home to His Wife for $1 [NYT]
Lawrence A. Frolik, a law professor at the University of Pittsburgh who specializes in elder law, said that he had “never heard” of a husband selling his share of a house for $1 to his spouse for tax or government assistance purposes. “I can’t see any tax advantages,” Frolik said. “If someone told me that, my reaction would be, ‘Are they hoping to shield assets in case if there’s personal liability?’ ” He added, “It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”

Daugerdas Judge Grants Hearing on Juror Conduct in Tax Case [Bloomberg]
U.S. District Judge William Pauley in Manhattan said today he will hold an evidentiary hearing on the conduct of Catherine Conrad, Juror No. 1 in the 10-week trial. He didn’t set a date. The defendants claim Conrad hid details of her background from the court, including a law degree, at least four arrests and the fact that she was serving a sentence of probation for shoplifting. The jury, including Conrad, convicted [Paul] Daugerdas in May on more than 20 criminal counts, including conspiracy, tax evasion and attempting to impede the Internal Revenue Service. The jury also returned guilty verdicts for Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; Donna Guerin, a Jenkens & Gilchrist lawyer; and David Parse, a former accountant for Deutsche Bank AG (DBK) unit Alex. Brown.

H&R Block drops TaxACT acquisition plan after antitrust opposition [KCBJ]
H&R Block Inc. has dropped its $287.5 million plan to buy the maker of TaxACT tax preparation software. In a Tuesday filing with the Securities and Exchange Commission, the Kansas City-based tax preparer (NYSE: HRB) said involved parties had agreed to terminate the merger agreement, effective Monday.

Police Clear Zuccotti Park of Protesters [NYT]
Hundreds of police officers early Tuesday cleared the park in Lower Manhattan that had been the nexus of the Occupy Wall Street movement, arresting dozens of people there after warning that the nearly two-month-old camp would be “cleared and restored” but that demonstrators who did not leave would face arrest.

Olympus accounting tricks queried back in 1990s [Reuters]
An investment banker raised concerns about dubious accounting at Japan’s disgraced Olympus Corp as long ago as the 1990s, after he discovered it was using Bermuda-based funds to “invent” assets and patch up its balance sheet, he told Reuters. The banker’s concerns, which he says were discussed inside Wall Street bank PaineWebber, his employer at the time and the arranger of Bermuda schemes for Olympus, is one of the earliest red flags known to have been raised over the Japanese company’s accounting irregularities, which continued for two more decades. “The Japanese accounting regiment at that time was very strange,” said the banker, explaining he had raised questions because Olympus was exploiting a loophole in accounting rules that mislead investors about its real financial health.

U.S.-listed China firms welcome to come home [Reuters]
Chinese firms listed in the United States would be welcomed home, a senior Shanghai Stock Exchange official said, chiding the main U.S. auditor watchdog and other American institutions for having politicized company accounting issues. Zhou Qinye, the exchange’s vice general manager, said while only a few firms have real accounting issues, many overseas investors are short-selling Chinese companies for profit. “The current situation is the result of some institutions seeking to politicize the matter, and it’s difficult to predict where things are heading,” Zhou told a conference, referring to a spat between U.S. and Chinese regulators over cross-border inspection of audit firms.

Hire a vet, fire someone else [Tax Update]
Joe Kristan shows why wrapping your tax policy with the flag is dumb.

Overstock Abandons O.co [SA]
The shine on the trophy hasn’t even faded!

Timing Questions Emerge on MF Global Cash [WSJ]
Hundreds of millions of dollars might have gone missing from customer accounts at MF Global Holdings Ltd. as far back as four days before the securities firm filed for bankruptcy protection, people familiar with the situation said Monday. The possibility of a shortfall in customer funds on Oct. 27 suggests problems might have emerged sooner than MF Global officials initially indicated to regulators and exchange operator CME Group Inc.

PwC gets America’s Cup deal [SFBT]
A less prestigious firm simply wouldn’t be acceptable for an event that Larry Ellison is obsessed with.

Deficit Deal Might Delay Tax Overhaul [WSJ]
“There could be a two-step process that would hopefully give us pro-growth tax reform,” Rep. Jeb Hensarling (R., Texas) said on CNN’s “State of the Union.” Mr. Hensarling is a co-chairman of the deficit-cutting supercommittee that faces a Nov. 23 deadline for reaching agreement on a plan to cut at least $1.2 trillion from projected future deficits. The approach could ease the path to an agreement, by allowing Congress to reach the outlines of an agreement on tax revenues and spending cuts this year, while postponing the difficult details of a tax overhaul until nexthe issue back to the congressional tax-writing committees. On Sunday, at a press conference in Honolulu where he was hosting the Asia Pacific Economic Cooperation summit, President Barack Obama called on Republican lawmakers to soften their resistance to revenue increases as they work on a deal bring the deficit under control, saying he hoped lawmakers will “bite the bullet and do what needs to be done.”

The Folly of the Flat Tax [WSJ]
Figuring out your taxable income can be quite an effort. But once that is done, most taxpayers just look up their tax bill on an IRS-provided table. Those with incomes above $100,000 must perform a simple calculation that involves multiplying two numbers together and adding a third. A flat tax with an exemption would require precisely the same sort of calculation. The net reduction in complexity? Zero.

Olympus Sale Helped Hide Balance Sheet Hole [Bloomberg]
Olympus Corp. (7733)’s 2009 sale of its profitable diagnostics unit may have undermined efforts to expand into health care as the company sought cash to shore up a balance sheet that was hiding decades of losses. Olympus’s then-President Tsuyoshi Kikukawa said the Japanese camera maker was unable to compete in the industry, even as he bought face cream, plastic cookware and recycling companies. A day after Beckman Coulter Inc. (BEC) purchased the Olympus unit, Chief Executive Officer Scott Garrett told analysts the division’s “long and enviable track record of above-market growth” would give an immediate boost to earnings. Barclays Capital upgraded Beckman on the deal.

Rogue Traders, Rogue Firms: The CME, PwC, MF Global and the Legacy of Refco [Re:The Auditors]
FM: “The auditor has complete access, at any time, including to financial systems and reports. They are responsible for issuing an independent opinion on internal controls over financial reporting and for issuing additional reports to the regulators – which they are dependent on- regarding controls over segregated assets per the Commodity Exchange Act. So… When you think about frequency, access, independence, and the fact they get paid well for their services by the shareholders the auditor is in line as the first-responder.”

Romney Tax-Cutting Path to Budget Balance Clouded by Few Savings [Bloomberg]
“Romney may be our only hope, so let’s hope he takes a remedial math course before January 2013,” says former Reagan administration budget director David Stockman. “You can’t get to 20 percent of GDP on spending without taking a fire ax to the Pentagon budget and sharply reducing Social Security payments to the more affluent current retirees.”

Error led to Workforce Central Florida layoffs, controller contends [OS]
Oops: “Three years ago, a former financial controller at Workforce Central Florida says he made a startling discovery. For several months, he said, the agency mistakenly posted expenses twice, making it appear as if Workforce had less money than it really did. By mid-2008, those phantom costs were pushing agency executives to lay off more than 20 workers, he said. The controller said he reported his findings to Workforce’s chief financial officer and chief operating officer, hoping to avert cutbacks. But he said the chief operating officer told him Workforce board members had already been notified about the layoffs, and she was not willing to tell them there had been a mistake.”

KPMG files to shift MF Canadian accounts to RBC [Reuters]
MF Global fired all 1,066 of its brokerage employees on Friday, triggering anger and resentment about the firm’s collapse after bad bets on European debt under former CEO Jon Corzine’s leadership. KPMG said on Saturday it filed the motion with the Ontario Superior Court of Justice, seeking authority to transfer certain MF Global Canada Co customer accounts to RBC Dominion Securities Inc.

Programming note: Most of you are working so you probably don’t realize it but today is technically a holiday, therefore we will resume The Daily Grind on Monday and run a shorter editorial schedule today. Caleb returns to your loving embrace Monday morning, so thanks to all of you for a great week, it’s been fun. – AG

PwC’s LGBT employees coming to Dallas for summit [Dallas Voice]
Human Rights Campaign sponsor PricewaterhouseCoopers is holding a two-day diversity summit for members of its LGBT resource group at the Joule Hotel in Downtown Dallas beginning Friday, Nov. 11, in conjunction with Black Tie Dinner st.

Financial Scandal Fans Never Had It So Good: Jonathan Weil [Bloomberg]
If you happen to be a connoisseur of accounting scandals, then the past month or so has been about as good as it gets, capped by the unfolding disaster at Olympus Corp. (7733) On the flip side, if you work as an auditor for a big accounting firm, it just got that much harder to make the case that society should value your services.

Green Mountain’s Landslide [WSJ]
Consider Green Mountain Coffee Roasters, whose shares tumbled 39% after the single-serving coffee company said revenue increased “only” 91% against expectations of around 100%. The trouble: While the shortfall was modest, many Green Mountain investors simply can’t remember being disappointed. And the perfect performance had led them always to give Green Mountain the benefit of the doubt.

Distortions In Baffling Financial Statements [NYT]
This has been a bad year for banks. With sovereign debt no longer trusted and widespread fears of a new recession in Europe, share prices of banks have fallen sharply. But in some cases, the financial statements look ever so much rosier. JPMorgan Chase reported net income of $15.3 billion during the first three quarters of this year, 22 percent higher than in the period a year earlier and a record for the first nine months of any year. There are explanations for that — and JPMorgan Chase deserves praise for calling attention to reasons to think the numbers are misleading. But at base the problem is a simple one: Accounting for financial institutions is a mess.

Audit: IRS responded well to deadly Austin incident [The Hill]
The IRS responded competently and efficiently after a man flew a plane into Austin, Texas, offices of the agency, a new report found. The Treasury Department’s inspector general for tax administration found that the IRS was able to resume work in Austin within 18 days of the February 2010 incident, and had ensured that taxpayer data and IRS employees were protected.

FASB Chairman Adds Two Agenda Projects to Improve Financial Reporting by Not-for-Profit Organizations [MarketWatch]
Leslie F. Seidman, chairman of the Financial Accounting Standards Board (FASB), today announced the addition of two agenda projects–a standard-setting project and a research project–intended to improve financial reporting of not-for-profit organizations. The objectives of these projects encompass suggestions received by the Board from its Not-for-Profit Advisory Committee at the Committee’s September 2011 meeting.

Ex-accountants ‘drained tax avoidance scheme of cash’ [The Guardian]
Two former Vantis accountants and ex-tax officials faked documents to siphon money out of tax avoidance schemes marketed to well-known and wealthy individuals, a court heard. Robert “Roy” Faichney and David Perrin, alongside their wives Shirley Faichney and Nicola Perrin, manufactured a series of bogus documents to allow the payment of huge sums from the companies involved in the scheme to a Jersey trust, it was alleged.

Alabama Governor Fails to Prevent County’s Record $4 Billion Bankruptcy Filing [NYT]
Last-ditch efforts by the governor of Alabama to prevent a record-breaking municipal bankruptcy in his state broke down on Wednesday, as the Jefferson County Commission voted 4 to 1 to declare bankruptcy on roughly $4 billion of debt.

Ex-IRS agent pleads guilty to prostitution charge [AP]
A retired IRS agent who once investigated a fugitive Nevada brothel boss and was partners in a failed rural Nevada bordello venture pleaded guilty Wednesday to transporting a California woman across state lines to commit prostitution.

Tokyo Police Investigate Olympus Accounting [WSJ]
The Tokyo Stock Exchange on Thursday placed shares of Olympus Corp. on its watch list for possible delisting, as the Japanese police launched an investigation into the company’s decades-long cover-up of investment losses.

Are Rising Inventories at Green Mountain a Bad Omen? [The Street]
On Wednesday’s conference call, Green Mountain said it’s “confident” that no accounting fraud has occurred. The questions from analysts about growing inventories seem to signal unease about both sales projections and the merit of capital spending increases.

L.A. councilman says business tax report had editorial spin [LA Times]
The drive to dismantle -– and possibly scrap –- the business tax in Los Angeles moved forward Wednesday as a City Council committee called for an independent economic analysis of several proposals to cut it, including one that would phase it out over four years.

MF Global Commodity-Account Transfers to Brokers ‘Substantially’ Complete [Bloomberg]
The transfer of MF Global Inc. commodities accounts to other brokers is “substantially” complete, a spokesman for the liquidator of the bankrupt broker- dealer said. Many of the firm’s 150,000 customer accounts are “out of date, inactive, or very small,” leaving a much smaller number to deal with, said Kent Jarrell, a spokesman for trustee James W. Giddens.

Goldman, Morgan Stanley mull reducing mark-to-market accounting [Reuters]
Market not so great, eh?

Accounting rules hurt public pension reform [SF Examiner]
The answer lies with the professionals who oversee public pension accounting, an unelected class of rule makers and contractors holding tremendous power. Pension number-crunching by the state funds has long been thought by financial economists to be illegitimate.
This begins with the fact that they are allowed to value their liabilities using projected investment returns rather than an interest rate derived from the real-world risk characteristics of the debt.
This policy, set by the Government Accounting Standards Board, makes pension deficits appear dramatically smaller than they really are.

Shulman Says IRS Will Focus on ‘High Risk’ Return Preparers [Business Week]
Internal Revenue Service Commissioner Douglas Shulman said the agency will place greater focus on return preparers it identifies as “high risk” in the upcoming tax filing system. “Beginning soon, the IRS will send letters to tax-return preparers who have been identified as high risk,” Shulman said today at a conference in Washington sponsored by the American Institute of Certified Public Accountants. “The letters are intended to bring to these return preparers’ attention that we’ve noticed some questionable traits” on some of their returns.

A backdoor tax on the poor [The Hill]
The IRS wants poor people to pay higher taxes. And it has figured out a way to do so without a rate increase. It is called a return-free system. Instead of completing your 1040 form yourself, the IRS would fill it out for you. All you have to do is cut a check. Congress is currently considering a bill to create such a system: H.R. 1069, sponsored by Rep. Jim Cooper (D-Tenn.).

CEOs say they are confident: PwC poll [China Daily]
More than half the CEOs in the Asia-Pacific region are “very confident” of increased revenue for their companies over the next three to five years, despite the ongoing economic turbulence in Europe and the United States, according to a survey from the international accountants, PricewaterhouseCoopers (PwC).

FASB Seeks Comments on Proposal to Defer Changes to Presentation of Reclassification of Other Comprehensive Income on Financial Statements [MarketWatch]
So, you know, get those comments ready if you’re all about the OCI

Rajaratnam Ordered in SEC Case to Pay Record $92.8 Million Fine [Business Week]
Rumor is Raj is looking for a new insider trading scheme to fund the fine, any takers?

Accounting body may change its “fair value” rule [Reuters]
IASB board member Stephen Cooper told an accounting conference on Monday IFRS 9 may have to be changed as it tries to “converge” its rules with those used in the United States.
Differences between the IASB and the U.S. Financial Accounting Standards Board over aligning fair value and other rules pushed back convergence work due to have been completed by June this year.
“If we are going to consider the FASB position and think what we should do and ask constituents views, then implicitly we have to contemplate the possibility of reopening IFRS 9 and making changes. Otherwise, what is the point of consulting?,” Cooper said.

Olympus fallout hits Tokyo securities traders [FT]
Japanese brokerage stocks were caught up in the downdraft amid speculation that they may have been involved in Olympus’s activities, analysts said. Nomura Securities , which said it was unaware of any involvement in the group’s concealment of losses, saw very active trade as its shares slid 15 per cent to Y245 – the lowest since 1974, according to Bloomberg data. Daiwa Securities fell 7 per cent to Y251.

Credit Suisse To Disclose Names Of U.S. Clients Suspected Of Tax Evasion [Reuters]
Credit Suisse AG, Switzerland’s second-largest bank, has begun notifying certain U.S. clients suspected of offshore tax evasion that it intends to turn over their names to the Internal Revenue Service, with the help of Swiss tax authorities. Credit Suisse’s notification by letter, a copy of which was obtained on Monday by Reuters, says the handover of names and account details will take place following a recent formal request for the information by the IRS.

Deloitte to Lease Office Space Near London 2012 Olympic Park [Business Week]
Deloitte LLP will lease two floors in a 12-story building by London’s Olympic Park to entertain clients during the 2012 Summer Games. Deloitte, one of accounting’s “Big Four” firms, will use about 16,000 square feet (1,486 square meters) of space near the main venues in London’s East End, spokesman James Igoe said. He didn’t say how much the building’s owner, Westfield Group, will charge in rent.

US High Court Orders Fla Court To Reconsider KPMG Appeal In Case Tied To Madoff [WSJ]
The U.S. Supreme Court on Monday ordered a Florida court to reconsider a KPMG LLP appeal that seeks to stop a Florida lawsuit alleging the accounting firm failed to properly audit three funds that invested with Bernard Madoff.
Investors in the funds, managed by Tremont Group Holdings Inc., said they lost millions in the Madoff Ponzi scheme and alleged those losses were the direct result of KPMG’s failure to detect the fraud.

Promises Made, and Remade, by Firms in S.E.C. Fraud Cases [NYT]
Did you say the SEC has no balls? That’s what I heard.

Obama Needs to Fire SEC Chief Schapiro [The Street]
Opinions. Assholes. Everyone has one.

MF Global Brokerage Can Probe, Not Share Results [Bloomberg]
U.S. Bankruptcy court judge Martin Glenn said at a hearing today that the brokerage trustee, James W. Giddens, can share documents and depositions with the Securities and Exchange Commission and the Commodity Futures Trading Commission. The trustee must probe management’s possible involvement without interference from the parent company, Glenn said. “There have already been serious allegations of misconduct,” Glenn said, citing company lawyers who told the SEC on Oct. 31 that there was a significant shortfall in its collateral for segregated accounts.

Was MF Global brought down by an accounting play? [Reuters]
Felix Salmon isn’t convinced that MF Global’s accounting methods brought it down a la Lehman.

Finding more flaws in HUD’s accounting of HOME program [Washington Post]
“The data that HUD has provided to this committee is completely unreliable,” said Rep. Randy Neugebauer (R-Tex.), chairman of the House Financial Services subcommittee on oversight and investigations, which has been probing the HOME program. “HUD has almost no way of knowing whether taxpayer dollars have been wasted or used for their intended purpose.”

Old Debts Dog Europe’s Banks [WSJ]
European banks are sitting on heaps of exotic mortgage products and other risky assets that predate the financial crisis, adding to pressure on lenders that also are holding large quantities of euro-zone government debt.

More problems are found with home buyer tax credits [LA Times]
Would you be shocked to hear that TIGTA found a few of these credits went to folks such as dead people, prison inmates and 3-year-olds?

Watch Groupon CEO Andrew Mason Blow Off A Bloomberg Reporter [Business Insider]
Maybe it started when she called him “baby-faced.”

MF Global CEO Jon Corzine resigns under fire [Reuters]
Jon Corzine has resigned as MF Global Holdings Ltd’s chairman and chief executive officer four days after the futures brokerage filed for bankruptcy protection, culminating a rapid downfall for one of Wall Street’s best-known executives. Corzine said his decision was voluntary and was best for the company and its stakeholders. “I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others,” Corzine said. “I intend to continue to assist the company and its board in their efforts to respond to regulatory inquited to the disposition of the firm’s assets.”

MF Global Masked Debt Risks [WSJ]
The activity, referred to in the financial industry as “window dressing,” suggests that the troubled financial firm was shouldering more risk and using more borrowed funds to facilitate its trading than investors could easily detect from the firm’s regulatory filings. This comes as it emerged that MF Global, which filed for bankruptcy protection amid questions about its bookkeeping and whether it had properly segregated customer funds, lobbied against a Commodity Futures Trading Commission proposal that would have placed tighter restrictions on how futures-trading firms can invest cash sitting in customer trading accounts.

Corzine Is Said to Hire Criminal Lawyer [DealBook]
Jon S. Corzine has hired Andrew J. Levander, a leading white-collar criminal defense lawyer, according to three people briefed on the matter, as the former New Jersey governor deals with fallout from the collapse of MF Global, the brokerage firm he has run since last year.

Report Shows a Mere 80,000 Jobs Added in U.S. in October [NYT]
Employers added 80,000 jobs on net, slightly less than what economists had expected. That compares to 158,000 jobs in September, a month when the figure was helped by the return of 45,000 Verizon workers who had been on strike. While job growth is certainly better than job losses, a gain of 80,000 jobs is hardly worth celebrating. That was just about enough to keep up with population growth, so it did not significantly reduce the backlog of 14 million unemployed workers.

Freddie Mac seeks further $6bn from taxpayers [FT]
What’s another $6 billion between friends? “Freddie Mac, the US-controlled mortgage financier, has requested an additional $6bn from US taxpayers, following a $4.4bn third-quarter loss, the company’s worst three-month performance in more than a year.”

IRS Commissioner Doug Shulman Wants a Real-Time Tax System [AT]
And I would like Padma Lakshmi to make me breakfast everyday. Can we both get what we want?

Boehner on supercommittee: Tax increases are out, revenues could be in [The Hill]
“I think there’s room for revenues, but there clearly is a limit to the revenues that may be available,” Boehner told reporters Thursday during a roundtable discussion. He added, however, that he was only open to new revenues if Democrats agreed to significant changes to mandatory spending programs like Medicare, Medicaid and Social Security. “Without real reform on the entitlement side, I don’t know how you put any revenue on the table,” he said.

Euro’s Leaders Question Greek Membership [Bloomberg]
Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until an early December vote determines whether it deserves a fresh batch of loans needed to stave off default. “The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?” German Chancellor Angela Merkel told reporters after crisis talks hours before a Group of 20 summit set to begin today in Cannes, France. French President Nicolas Sarkozy said Prime Minister George Papandren’t get a “single cent” of assistance if voters reject the plan.

MF Global accused over fund transfers [FT]
CME Group, the US exchange operator and supervisor of MF Global’s futures brokerage business, has accused the failed broker-dealer of moving customer funds “in a manner that may have been designed to avoid detection”. MF Global left a $633m shortfall in what are supposed to be protected customer funds, the Commodity Futures Trading Commission said on Wednesday. The disclosure came as lawyers for MF Global’s bankruptcy trustee raced to arrange the transfer of thousands of commodities accounts before the law requires their liquidation.

Deloitte Plans More Asia Growth [WSJ]
Barry Salzberg, global chief executive officer of the international network of accounting, consulting and auditing firms, said in an interview with The Wall Street Journal last week in Singapore that Deloitte’s work force grew by 12,000 last year, and that he expects a similar pace of hiring in the fiscal year ending next May. Deloitte has also said it expects by 2015 to increase the total to 250,000 people, from 182,000 today.

Investors Punish Diamond for Delay [WSJ]
Investors reacted harshly Wednesday to questions about accounting at Diamond Foods Inc. that forced the snack maker to delay its $2.35 billion acquisition of Pringles into next year. The company’s stock fell 18% to $52.79 a share, a level that, if sustained, would make the deal $150 million more expensive than it would have been before Diamond announced the delay. Late Tuesday, Diamond said it would investigate allegations sent to the chairman of the board’s audit committee, Edward A. Blechschmidt, regarding Diamond’s accounting for certain crop payments to walnut growers.

WeiserMazars LLP Promotes Three Senior Managers to Partner in New York City and Lake Success, N.Y. Offices [WM]
Seth Cohen, Guillaume Wadoux and Roberto Viceconte have earned seats at the adults table.

IRS Acquiesces in O’Donnabhain: Gender Reassignment Surgery Is a Deductible Medical Expense [TaxProf]
The court held that because hormone therapy and sex reassignment surgery treat the taxpayer’s disease they are medical care, and the expenses for that medical care are deductible under § 213.

Frantic trading before MF Global UK failure – KPMG [Reuters]
KPMG also said it was working closely with company staff to transfer client positions, and that it had already closed out substantial positions. “Since our appointment we have received thousands of e-mails, telephone calls and letters from clients and related parties with highly complex requests,” Richard Fleming, UK head of restructuring, said in the release.

How Should Auditors Handle China’s State Secrets Law? [WSJ]
In the case of KPMG, it’s decided to issue a “qualified opinion of scope limitation” – essentially not being able to sign off on a company’s books – for its client, Hong Kong-listed China High Precision Automation Group Ltd.

Mission Impossible: Cutting the Corporate Tax Rate to 25 Percent [TaxVox]
It has been an article of faith among most congressional Republicans and many Democrats that the corporate tax rate should be cut from today’s top level of 35 percent to 25 percent—or even less. And backers of the idea breezily suggest this could be paid for by scaling back some corporate tax breaks. But a new report released today by the congressional Joint Committee on Taxation concludes it can’t be done.