Going Concern

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Grant Thornton LLP Names New CEO, Looks to Coin More Inclusive Title of ‘Global 6 Accounting Organization’

Caleb Newquist
June 23, 2009

Grant Thornton LLP has named Stephen Chipman its new CEO, replacing Edward Nusbaum who is taking the CEO position of Grant Thornton International. The changes take place on January 1, 2010.
In a bit of robotic communications work, the two vomit-worthy statements from the CEO’s are oddly similar.
Nusbaum on June 3rd:

‘I am greatly honored and look forward to the opportunity to lead Grant Thornton International,’ said Nusbaum. ‘I will dedicate myself to continuing Grant Thornton’s tradition of strong leadership in the accounting profession and in speaking out on issues of importance. I want the Grant Thornton brand to mean principled people providing superior service to highly satisfied clients around the world’

Chipman today:

‘I look forward to leading Grant Thornton LLP,’ said Chipman. ‘I will dedicate myself to taking action on a number of fronts, including continuing Grant Thornton’s tradition of providing strong leadership to the accounting profession and speaking out on issues of importance. I will also continue our focus on providing the Grant Thornton Experience for our partners, people and clients, and expanding our global service capabilities and corporate social responsibility agenda.’

Okay, they aren’t identical but, sheesh, put some thought into it guys. These statements read like you just found out your wives were cheating on you…with each other.
Boilerplate CEO statements notwithstanding, the other interesting tidbit that was not subtly inserted in today’s press release was the usage of “Global 6 Accounting Organization” by GT.
Look GT, we see what you’re trying to do. You’re trying to sneak in this fancy little phrase that you think will catch on and it’s not working for us. You’re not in the cool kids club. You’re just not. We feel bad for you but you can’t just show up at the cool party while there’s toilet paper stuck to your shoe and expect to start high-fiving PwC and get laid by some KPMG hottie. Nice try.

Stephen Chipman named CEO of Grant Thornton LLP [Grant Thornton Press Release]

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Legg Mason to Financial Crisis: 100 Years, You.

Caleb Newquist
June 23, 2009

That’s it. It’s official. Worst. Crisis. Ever. If Legg Mason is your gauge on financial crisises, that is.
And since it is such a momentous occasion, guess what this calls for…wait for it…executive bonuses!
Courtesy of footnoted.org, we learn that Chairman and CEO, Mark Fetting’s received approximately a $3M bonus for “leadership of the company during one of the worst financial crises of the last 100 years, which particularly affected financial services companies”
Footnoted goes on to give us some perspective:

Just to make sure, we did a quick check for the word crisis (or crises) at other financial services companies and didn’t come up with anything that even came close. While the word was used in several other proxies, it wasn’t used in a way to justify a bonus and there were no pronouncements about this being the “worst financial crises”.

Okay, so Legg has some melodramatic types writing their filings. But how about some chicanery?:

Equally interesting is that while the board set Fetting’s bonus at 21% of the bonus pool in June 2008, Legg Mason’s loss of $1.9 billion last year meant that there was no bonus pool. But that didn’t stop the bonus because as the comp committee writes in the proxy the net loss was due to just two items and without those two items, the company “would have had net income, and the plan would have produced a total bonus pool large enough to accommodate the annual incentive awards made. Although the terms of the plan do not explicitly provide for the exclusion of those items, the Committee considered the items to be extraordinary expense.”

Seriously, who’s going to let two measly items stop them from paying executives bonuses out of a bonus pool that didn’t really exist? This is financial wartime people, we will not be denied.

Legg Mason calls it: The worst financial crisis [footnoted.org]

Uncategorized

Corporate CEO’s Are Smarter Than You. It’s Got Nothing to Do with Having Insider Information

Caleb Newquist
June 23, 2009

Are you a corporate executive with insider information? Do you have a six-figure mortgage and a significant other with a shopping addiction? Is it possible that you’re not buying the hyperbole about “green shoots”?
Apparently that’s the consensus out there according to the Financial Times:

Executives in charge of the largest US companies sent a signal of their concerns by selling far more shares than they bought this month, according to data based on Securities and Exchange Commission filings.

BFD, you say? To wit:

Share sales by so-called company insiders are outstripping purchases so far this month by more than 22 times. TrimTabs, the investment research company, said insiders of S&P 500 listed companies have unloaded $2.6bn in shares in June, compared with $120m in purchases.

Still not convinced? Maybe this quote from TrimTabs CEO, Charles Biderman will sway you, “The smartest players in the US stock market – the top insiders who run public companies – are not betting their own money on an economic recovery.”
Did you hear that? The smartest players aren’t betting their own money on the recovery. It’s not because they run a shitty company, no, no. It’s because they’re smarter than all of us.

Pessimistic executives cash out of shares [FT.com]

Scoping

Scoping | 06.23.09

Caleb Newquist
June 23, 2009

At Least Seven Killed in Red Line Crash – “One Metro train slammed into the back of another on the Red Line at the height of the evening rush yesterday, killing at least seven people and injuring more than 70 others in the deadliest accident in Metrorail’s 33-year-history.” [Washington Post]

Conspiracy surrounds $134bn ‘bond’ find – If the blogosphere is good for anything, it’s a conspiracy [BBC]

Experts: Apple Disclosure ‘Falls Short’ – [Business Week]

Review Comments

Review Comments | 06.22.09

Caleb Newquist
June 23, 2009

The Public Is Losing Confidence That Stimulus Will Help Economy – Shoots/Shmoots [Clusterstock]

Google is evil – Or simply incorrect [Paul Krugman/NYT]

Beach reading: Chesapeake’s annual meeting transcript – Not the whole thing, obv. We wouldn’t do that to you. [footnoted.org]

Uncategorized

Madoff Feeders Getting Some Unwanted Attention

Caleb Newquist
June 22, 2009

The SEC, feeling confident these days, has filed a complaint against Cohmad Securities Corporation and its Chairman, Chief Operating Officer, and one of the brokers, saying they “actively marketed Madoff investments while ‘knowingly or recklessly disregarding facts indicating that Madoff was operating a fraud.'”
Call us Captain Obv but that sounds like they were either dumb or in on the scam. Either way, they can’t be too psyched about it.
An additional complaint has been filed by the SEC against Stanley Chais, an investment adviser who put all of the assets he oversaw into casa de Madoff.
Irving Picard, who might have the most thankless job in America, also sued both Cohmad and Chais, because, you know, a few people want their money back. The trustee’s complaint against Cohmad spells it out:

The trustee’s lawsuit asserted that fees paid to Cohmad by Mr. Madoff were based on records showing the actual cash status of customer accounts — the amounts invested and withdrawn — without including the fictional profits shown in the statements provided to customers. When a customer’s withdrawals exceeded the cash invested, Cohmad’s employees no longer earned fees from that account — even though the customer’s statements still showed a substantial balance, according to the lawsuit.

This arrangement indicated that Cohmad and its representatives knew about the Ponzi scheme and knew that the profits investors were allegedly earning were bogus, according to the trustee’s complaint.

Good luck explaining that.

Brokerage Firm and 4 Others Sued in Madoff Case [New York Times]

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SHOCKER: Doesn’t Appear that Stanford Auditors were Doing Any Auditing

Caleb Newquist
June 22, 2009

Last week’s indictment of Allen Stanford has brought up the always popular question when fraud, occurs: “Who are the auditors that were asleep at the wheel of this disaster?”
Well, in this case, the auditors were a local UK two-person shop, CAS Hewlett, which must be Queen’s English for Friehling & Horowitz.
It doesn’t appear that CAS Hewlett has a website, but they’ve been doing the Stanford “audits” for at least 10 years, so obv they’re legit. PwC and KPMG both have offices on Antigua but Stanford preferred to stay with its “trusted firm”. Totally understandable.
And the best part? The founder of the firm, Charlesworth “Shelly” Hewlett died in January, approximately a month before the story broke on the Ponz de Stanford.
This all adds up to who-the-fuck-knows if audits were even occurring and for us to speculate if Shelly needed to get got because Stan knew that the poo and fan were coming together. Just sayin’.

Scoping

Scoping | 06.22.09

Caleb Newquist
June 22, 2009

U.S. seeks delay on calculating Madoff restitution – Sentencing will not be delayed. Whew! We’re not sure if we can wait much longer for victims’ statements [Reuters via DealBook]

Sorry America, We Still Have No Clue What To Do About ‘Too Big To Fail’ – Newspeak phrase of the day: “Tier 1 Financial Holding Companies” [Clusterstock]

All together now: ‘F is for failure’ – Hey, it’s all around. Somebody’s got to talk about it. [FT Alphaville]

Uncategorized

UBS Closer to Getting the McCarthy Treatment

Caleb Newquist
June 21, 2009

If you’ve got a Swiss bank account, here’s hoping you opened it because it was convenient for your monthly skiing/Toblerone getaway.
The U.S. and Swiss governments have agreed to share more tax information in order to crack down on all the tax dodgers out there that send their money offshore. The timing of this agreement is is especially diabolical because the IRS is currently trying to get Swiss bank behemoth UBS to name names of over 50,000 American clients.
Hearings in Miami are scheduled for next month to see if the names can be released, however, the Swiss have stated that this may violate Swiss law of double-secret-no-tattling-on-clients.
Ultimately, the Swiss Federal Council and Parliament will decide if the new agreement is kosh but judging by the Obama Administration’s hard-on for closing tax loopholes, they’ll probably play ball.

U.S. and Switzerland to Share More Tax Data [DealBook/NYT]

Firm Watch

No Raises, Bonuses From Accounting Firms May Result in an Exodus that Moses Would be Proud of

Caleb Newquist
June 21, 2009

There has been lots of gossip out there about accounting firms freezing pay and skipping bonuses this year. Not surprisingly, this has been welcomed with a resounding “fuck this” by many of you.
Tough job market and near-apocalyptic economic conditions notwithstanding, you can’t really blame people that are ready to jump ship after billing more hours than they ever have before and then are told, “Thanks for all your help this year. Oh, and we can’t even afford to give you a cost-of-living increase.”
Considering the layoff bloodbath that has occurred in the past 12 months, which includes partners, one has to wonder why the hell these firms are continuing to slash costs. Many survivors of the massacre will get over the whole “thankfully I have a job” mentality when they’re welcomed with a new low in gratitude from their employers.

Firms face struggle to keep hold of top talent [Accountancy Age]

Uncategorized

Face It People, Nothing Much Can Be Done About the Revolving Door

Caleb Newquist
June 20, 2009

There’s constant ~~conspiracy theories~~ bellyaching about certain companies getting their former big shots into public service and regulatory positions (we’re talking about you, Maxine Waters).
Well now there’s speculation about former Big 4 partners working at the IASB.
We get it, those who used to work at the big firms shouldn’t be writing the rules. So who the hell is going to do it? Shall we have the likes of Friehling & Horowitz appointed as the standard setters?
The large firms have the biggest pool to choose out of, so natch they’re going to have some of the better candidates to delve into this wonky rule-writing stuff. We’re probably lucky that there are people out there that actually want to serve on these boards, lots of Big 4 partners can barely turn on their computers.

In Case You Need Another Reason to Hate the French

Caleb Newquist
June 20, 2009

french flag.jpg Walking around the PwC office in Midtown Manhattan, our blogospondent in the field happened across a couple of young ladies having the picture taken in front of the P Dubya sign out front, proudly posing as if it was their names on the building at 300 Madison.
Said blogospondent approached the young ladies and asked if they worked at the P Dub and they responded in heavily French accents, “yes”. As result of further prying, it was revealed that the ladies do work a lot during “busy times”, sometimes between 50 and 60 hours a week!
This compared to an American tax associate who we spoke to just a couple days before who, in the last fifteen days, had worked 185 hours.
Let’s recap: America – 185 hours in 15 days in the middle of June vs. France – 50-60 hours in one week during the “busy time”.
American vitriol towards the French may now ensue.

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Remote Tax Advisor, CPA Firm

Remote Tax Manager

Senior Accountant / Client Account Manager (CAS & Tax)