Category: Big 4

If it happens at a Big 4 accounting firm, we’re talking about it here.

Compensation Watch ’10: KPMG Discussing a Mid-Year Bonus (or Something)

After moves by Deloitte, PwC, McGladrey and now Grant Thornton, we have now heard that KPMG is discussing a mid-year surprise.

The only thing is, there aren’t a lot of details at this point. The firm’s first quarter is not over until the end of this month, so the pool likely hasn’t been determined and it isn’t known whether the mid-year comp will be paid as a bonus or as a merit increase. Our source on the matter speculates that it will be a bonus rather than a raise but it is fairly certain that it will be structured in a way that will incentivize employees to stay with the firm. There has been steady stream of people leaving (which is not atypical this time of year) and there are hopes that this show of love will stem the tide.

So while it appears that the House of Klynveld has heard your grumbling about anteing up, time (and the amount of money) will ultimately determine if this will satisfy the troops.

If you’re familiar with the talks or you have more details, email us the details and discuss your thoughts below.

UPDATE – circa 2:10 pm: Some thoughts on a non-bonus approach:

Pure (educated) conjecture on my part, but I would assume that the mid-year “surprise” would be a raise, as the firm is apprehensive at this point about giving bonuses, because people could just take them and leave. Harkening back to our SOX-404 years (2005), we gave multiple raises, bonuses and awards throughout the busy season (i.e., if you worked 60+ hours in a week, immediate $200 award) with a bonus at the end of the tunnel. I seriously doubt any early 2011 compensation would be front-loaded.

And then, in case you weren’t already aware, there’s this:

In other news, [the Dallas] office has been reaching out and giving offers to people they have previously laid off and are seeking out experienced hires. Not sure if it’s firm-wide, but an interesting sign of desperation nonetheless.

Insider Trading Charges Throw a Wrench into Former Deloitte Employee’s Plans for Sexy Mobile App

[caption id="attachment_22306" align="alignright" width="260" caption="Drew Altizer Photography via The Bay Citizen"][/caption]

Having a nice Friday evening, Going Concern faithful? Wonderful. Ordinarily, we would leave you to your weekend activities but something came to our attention that simply couldn’t wait.

Earlier in the week, we told you ��������������������, the former Deloittians who were charged with insider trading by the SEC. Arnold and Annabel were giving tips to Annabel’s sister, Miranda Sanders, and her husband, James, who traded on the information. The SEC alleges that the scam amounted to approximately $23 million in gains for everyone involved.

For all intents and purposes, Arnold McClellan probably was your run-of-the-mill tax partner at Deloitte until he opted to use his insider knowledge to make some money for himself and his in-laws. Likewise, you might expect that Annabel was just a humdrum Deloitte employee who landed a partner (he’s 13 years her senior) who got involved in a insider trading scam. But someone sent us a link to a report in the Bay Citizen that informs us that she had a very interesting venture in the works.

You see, Annabel left the firm (exactly when, is unclear) after working in the London, San Jose and San Francisco offices and presumably was ready to be a stay-at-home mom. When that became monotonous, she and a friend figured they would take their interest in knockin’ boots to launch a mobile app called “My Nookie.”


The website for the app has been taken down but the Bay Citizen was able to get a lot of the details:

The “about” tab for McClellan’s website details a vision for a new kind of social networking site:

My Nookie

Friends love to talk about sex and My Nookie is the app your sex life and social life can’t be without. Journal and rate your partners and sexual encounters. Share sexperiences with your closest friends, take sexting to the next level and relive your rendezvous with those five star partners.

Fun and tasteful with activity illustrations, My Nookie is fully loaded with features to flirt, play, tease and share. Feeling adventurous? Shake your phone and dare to try something new. Keep it handy on your iPhone because you never know …..

Features:

• Detailed diary of your sexual activities with date, partner, location, ratings and notes

• Partner contacts with profile, including photo, rating, activities performed, notes and tally

• Sex activity illustrations and descriptions, with the option to add your own

• ‘Shake It’ feature which suggests an activity to try

• Personal profile with ‘nookie’ summary

• Share all or some of your entries, partners, and profile

• Send a sexy invite to a partner or potential partner with alluring pictures

• Email, text or call your partners right from the app

What happens in My Nookie stays in My Nookie with optional pass code lock and discreet mode.

The Bay Citizen reports that My Nookie isn’t available in Apple’s app store (frankly, we’ll be surprised if passes Steve Jobs’s sniff test) but they have some screen shots (examples are on the following pages).

Unfortunately, now that Annabel has legal troubles to contend with, the Citizen reports her partner in the My Nookie venture, Milly Hanley, has taken over the project entirely. Arnie’s lawyer stated that he wasn’t involved with this venture while Annabel’s counsel simply stated that My Nookie was unrelated to their involvement and referred the Citizen back to Ms. Hanley who claims she can’t recall how she met Annabel.

The story around the McClellans is even weirder the more we poke around. Andrew Ross quotes a source in the San Francisco Chronicle:

“While they’ve been described as socialites, they’re definitely not at the top of that heap. I think a more apt description is they were attempting to scale the social heights.”

According to a report Wednesday in the online Bay Citizen, “in recent weeks, citing vague legal troubles, the couple had told friends that they were considering moving their family, which includes two school-aged sons, to South Africa.”

Perusing around a little bit more, Annabel’s Facebook page seems pretty locked up (definitely not accepting new friends) and we found the blog “My Nookie” which has the same feel as the mobile app and was started by “three friends in our 30s and 40s,” the third woman possibly being Jeanette Harris, who, the Citizen article states, hosted a benefit last year with the other two women.

From the blog’s “About Us” page:

We’re three friends in our 30s and 40s who realized that somewhere between meeting our husbands and getting married, we clammed up when it came to talking about our sex lives. MyNookie.com is where we can open up about everything we’re thinking about when it comes to sex and sexual health. And it’s where you can turn to for creative solutions and accurate information—because sex is too important to feel like you’re missing out.

Sure sounds like it could be our three amigas, doesn’t it? So with these developments, this story has gotten exponentially more interesting. We invite anyone with knowledge about the situation to email us and we’ll keep you updated as we learn more. Oh, and be sure to leave your thoughts on the app in the comments. Ms Hanley is probably looking for feedback.

Ernst & Young Study: U.S. Is Great for Renewable Investment If You Don’t Count the Red States

China has everyone beat, no shocker there, but if you don’t count Sarah Palin’s real America the red, white & blue is #2!

Ernst and Young counts only perhaps half (or is it three quarters?) of the 300 million people in the US as “US”, by considering only those states that are doing anything about renewable energy, like California…The “US” excludes all the dirty states that lack renewable policy; states like Wyoming, Indiana, North Dakota, Kentucky, Oklahoma and so on.

Ernst & Young: U.S. Blue States Nearly as Attractive as China for World Renewable Investment [Reuters]

One E&Y Office Is Under the Impression That KPMG Is Not Their Competitor

This marks the time of year that your firms ask you to give back to your community in various ways. The most common way that we’re aware of is to contribute to your firm’s respective United Way Campaign. This push usually involves numerous emails and maybe even a little dog and pony show where one partner essentially guilt-trips you into giving to the charity of the firm’s choosing rather than your own.

The Big 4 firms are quite competitive in their fund-raising efforts and a tipster had some thoughts on the tally in the Atlanta office of Ernst & Young (photo after the jump).

[A]pparently EY Atlanta doesn’t believe that KPMG exists (or is considered their competition)

Not to mention that these progress indicators are oddly phallic-looking…


It’s also worth calling attention to E&Y’s abysmal phallic filling performance compared to Deloitte and PwC. Our tipster’s points are duly noted and we’ve concluded that it’s either an obvious show of disrespect by E&Y Peachtown aimed right at KPMG OR the House of Klynveld happens to be blowing everyone out of the water and the Atlanta brass is saving everyone the embarrassment.

Knowing what we know about KPMG employees’ enthusiasm for the United Way Campaign, the latter scenario seems unlikely. Other theories and reactions are welcome at this time.

Some Clarification on the Bathroom Situation at E&Y Jericho

Yesterday, we shared a story with you that probably caused you to thank your lucky stars that you don’t work in Norway (especially if you’re a woman). In that post, we called back to our old report from January about the secure lavatories at Ernst & Young’s Long Island location in Jericho.

You may have been under the impression that someone within E&Y was responsible for the lockdown, however, thanks to an enterprising E&Y employee, we now know who the keymasters really are:

I don’t work in the Jericho office, but got shipped out there for random clients for most of this summer. The bathrooms are in the common areas shared by all tenants of the building, so the keyed entry to the bathrooms is mandated by the building management, not EY (not that I’d put it past the partners to come up with something like this, though).

Also, while there are keys for each bathroom, there are also entry codes you can use instead. So you can grab one of the communal keys (kinda gross), or remember the terribly difficult four digit code (0001 if I remember correctly).

As a side note, I remember the admin mentioning that the original set of five keys for the men’s room was down to two. I’m wondering why someone would make off with these nasty over-sized germ farms.

Okay, so the missing keys aren’t news but what’s it going to take to get some extras made? And, again, who’s making off with the keys in the first place?

And while it’s good to know that the E&Y brass in Jericho aren’t actually the ones putting the clamp on the johns, would it kill them to spring for some private restrooms that non-E&Yers don’t have access to? It’s one thing to have to schlep to the front desk to get a key every time; it’s entirely another to be sharing a bathroom with the entire building. What is this, Penn Station?

Seriously, how much time and cost would it take to throw in some pots, sinks, urinals and XLERATORs®? It’s a health issue for crissakes.

Some Ernst & Young Employees Got Paid to Look at a Plethora of Porn

Really not sure why or how E&Y landed this gig but work is work.

Police may be called on to investigate reports [New South Wales] [Members of Parliament] or their staff accessed websites containing sexually explicit images of young people.

The findings were contained in an independent report by Ernst & Young, commissioned in September after an unauthorised audit of computer use in the NSW parliament showed “adult” websites had been visited from the offices of some MPs.

The report, tabled in parliament yesterday, says that of the 72 most-used websites on parliamentary computers over a 10-month period, 35 “appear to be adult-related sites”.

Nine contained sexually explicit images of young people, some of whom may be under 16.

Nearly 50% of the most-used sites over a 10 month period? And some that could involve minors (in NSW)! That’s impressive even by SEC standards.

Ernst & Young Rang the Closing Bell Today

We don’t recognize anyone but you’re invited to point any notables out.

.

And you just know that somewhere, Dick Fuld is slobbing around in a old CU sweatshirt, muttering about backroom number-crunching dweebs that are still in business.

[via NYSE]

(UPDATE 2) SEC Charges Deloitte Tax Partner with Insider Trading

~ Update includes clarification of partner’s employment status and statements from accused’s attorneys via MarketWatch.

~ Update at circa 7:20 pm ET includes statement from Deloitte

If you thought all this insider trading fun was just for hedge funds you would be sorely mistaken. Deloitte seems to have another case of a partner who can’t seem to control himself when he gets some insider info. Earlier this year, former Deloitte Vice Chairman Tom Fla> shelled out $1.1 million to settle charges with the SEC.

This time around, it’s still a family affair – husband, wife, wife’s sister and brother-in-law job – and it went overseas:

The Securities and Exchange Commission today charged a former Deloitte Tax LLP partner and his wife with repeatedly leaking confidential merger and acquisition information to family members overseas in a multi-million dollar insider trading scheme.

The SEC alleges that Arnold McClellan and his wife Annabel, who live in San Francisco, provided advance notice of at least seven confidential acquisitions planned by Deloitte’s clients to Annabel’s sister and brother-in-law in London. After receiving the illegal tips, the brother-in-law took financial positions in U.S. companies that were targets of acquisitions by Arnold McClellan’s clients. His subsequent trades were closely timed with telephone calls between Annabel McClellan and her sister, and with in-person visits with the McClellans. Their insider trading reaped illegal profits of approximately $3 million in U.S. dollars, half of which was to be funneled back to Annabel McClellan.

The UK Financial Services Authority (FSA) has announced charges against the two relatives — James and Miranda Sanders of London. The FSA also charged colleagues of James Sanders whom he tipped with the nonpublic information in the course of his work at his London-based derivatives firm. Sanders’s tippees and clients made approximately $20 million in U.S. dollars by trading on the inside information.

So not a bad haul. The kicker is, Annabel was also employed at Deloitte, working in the London, San Jose and San Francisco offices. The McClellans provided information to the Sanders on several companies including Kronos, Inc., aQuantive, Inc. and Getty Images.

The SEC brass gave their standard scolding. First, Enforcement Chief, Robert Khuzami, “The McClellans might have thought that they could conceal their illegal scheme by having close relatives make illegal trades offshore. They were wrong.”

And San Fran Director Marc Fagel, “Deloitte and its clients entrusted Arnold McClellan with highly confidential information. Along with his wife, he abused that trust and used high-placed access to corporate secrets for the couple’s own benefit and their family’s enrichment.”

But the real story here is the second instance of insider trading charges against a Deloitte partner this year. The firm successfully sued Tom Flanagan back in January but you have to wonder if there isn’t some flaw with the firm’s internal oversight. Not long after the Flanagan suit, we reported on the 475 reprimands for internal noncompliance in 2009. Those reprimands did not mention insider trading specifically but over 200 of them were related to independence violations. Pattern? You can weigh in below.

Anyone with any knowledge on this story is invited to get in touch with us. as it is not clear if there has been any internal repercussions yet. Messages (including voicemail, carrier pigeon and morse code) left with Deloitte have not been returned (see statement below).

UPDATE: McClellan’s attorneys are not amused by the SEC’s little stunt:

Lawyers for Arnold McClellan denied charges Tuesday by the Securities and Exchange Commission that the former Deloitte Tax LLP partner was involved in a big insider trading scheme. “Arnold McClellan denies the SEC’s claims and will vigorously contest them,” Elliot Peters and Christopher Kearney of Keker & Van Nest LLP said in a statement on behalf of McClellan. “He did not trade on insider information, and there will be no evidence that he passed along any confidential information to anyone.” McClellan “had no financial incentive to commit the actions alleged,” the lawyers added. “He is a conscientious, law-abiding professional with a 23-year unblemished track record of client service at Deloitte to prove it. We will see the SEC in court.”

And just to clarify, McClellan is no longer with Deloitte, leaving the firm in June of this year. Deloitte spokesman Jonathan Gandal emailed us the firm statement (see below) still hasn’t returned our call (busy day, right?) but managed to give a statement to and was quoted by Reuters, saying that he was “shocked and saddened” by the allegations and “If the allegations prove to be true, they would represent serious violations of our strict and regularly communicated confidentiality policies.”

UPDATE 2: Here is the full statement from Deloitte:

“We are shocked and saddened by these allegations against our former tax partner and members of his family. If the allegations prove to be true, they would represent serious violations of our strict and regularly communicated confidentiality policies. Deloitte is committed to safeguarding non-public client information and has cooperated with the SEC throughout its investigation. The SEC does not allege any wrongdoing by Deloitte in this unfortunate matter.”

Complaint_Deloitte

PwC Survey: Working People to Death Might Cause Them to Quit Their Jobs

Shocking survey results out of PwC today as the firm announced that overworking staff increases turnover at law firms. If you can believe that.

There is a “strong correlation” between staff turnover and chargeable hours at law firms, according to PricewaterhouseCoopers.

Numbers released as part of their annual survey of the sector show that the top ten law firms have average turnover rates of 17-18%.
According to the accountancy firm, reducing turnover to less than 10% can reduce costs by £32,000 per equity partner.

In semi-ironic and related news, a bunch of bitter Big 4 employees finally decided over the Thanksgiving holiday that they would be leaving their respective firms because they are sick of the hours.

KPMG Partner-cum-Poet Resists Urge to Create Verse on His Blackberry

Believe it or not, employees of Big 4 firms possess talents that have nothing to do with elaborate spreadsheets, coffee and bagel consumption or fantasy football.

A perfect example of this would be Arun Kumar, a “battle-tested” partner in KPMG’s Silicon Valley office. Mr Kumar is a poet, who recently published a collection of 39 poems entitled “Plain Truths.” And regardless of his almost certain reliance on his BlackBerry, he manages to set it aside for the sake of his art.

Kumar, a partner at accounting and consulting giant KPMG, knows another kind of poetry. A poetry of nature and relationships, of whimsy and wisdom, a poetry of words that can be written on planes or between planes or in the quiet of the evening, but never, ever, on a BlackBerry.

“A poem, for me, is visual,” Kumar says at his Mountain View office. “Seeing it is quite important, so I can’t imagine — on a BlackBerry it’s not the same.”

So not only is Kumar a man of professional integrity, he also is one of artistic integrity, resisting the eyestrain and temptation to double-thumb inspiring words on to a 2.5 inch screen that may or may not be lost after he drops it one too many times.

But even more surprising (and disappointing) than his commitment to his craft, is Kumar’s ability to avoid penning poems related to his job. “Most [poems] are far removed from his work,” the article states, despite the undeniable muse that is life inside the House of Klynveld.

Arun Kumar, of Silicon Valley s KPMG office, finds poetry on the human side of the ledger [Mercury News]

Forward One Email and Your Career at PwC Is Over

Do you see what happens?

Of course we kid (some of you have no sense of humor). We actually haven’t heard what is happening to the Irish lads as the investigation is rumored to be still on-going. But this could explain what PwC did with a large portion of their swag when the new logo rolled out.

If you happen across this guy, get him a seat at the New York Thanksgiving soirée (location still unknown), wouldja?