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A PwC Partner’s Scribbled Notes Helped Save Joe Cassano’s Hide
Back in April, the DOJ and SEC passed on filing criminal charges against the man everyone perceived to be the cause of the financial apocalypse, Joe Cassano.
The Journal digs into a few of the details behind the failed pursuit of criminal charges against JC and we first learn that PwC’s audit team wasn’t r ve when they were poking around AIGFP:
Auditors at PricewaterhouseCoopers, AIG’s accounting firm, felt Mr. Cassano was evasive when they asked questions as the housing market weakened that year, according to people familiar with the matter. Tim Ryan, a PwC auditor, was concerned about requests for collateral from Goldman Sachs, which had purchased AIG’s derivatives contracts. He believed the requests were an indication the value of the swaps needed to be lowered and that further collateral calls were likely, people familiar with the matter said.
In interviews in 2008, Mr. Ryan told prosecutors he sometimes couldn’t get straight answers from Mr. Cassano when he asked him to justify how AIG accounted for the swaps, these people said. Through a PwC spokeswoman, Mr. Ryan declined to comment.
Okay, so Cassano was a prickly guy. That’s no surprise, especially since the lion’s share of people that have to deal with auditors, dislike them based purely on spite. Regardless of that factoid, it irks auditors to no end when they have to deal with an uncooperative client.
Cassano’s attitude was noted by prosecutors and this led them to believe that maybe he was withholding information from PwC and the AIG brass about the shitstorm that was growing at AIGFP:
“Why would he do that?” said Jim Walden, one of Mr. Cassano’s attorneys. Mr. Cassano had no reason to hide key facts because he knew the year-end audit was approaching and the unit’s books would be examined.
“He was smart enough many times before” in surviving prior problems, Mr. Pelletier retorted. “He thought he could pull a rabbit out of the hat” and turn things around.
In meetings spanning several weeks in Washington, the defense team rebutted the prosecution’s allegations, presenting a version of events that portrayed Mr. Cassano as repeatedly disclosing bad news to his bosses, investors and PwC.
The defense team didn’t know it at the time, but its efforts helped focus prosecutors’ attention on an obscure set of handwritten notes in their files, found scrawled on the bottom of a printed spreadsheet.
Prosecutors had seen the annotations, which were made by a PwC partner at a meeting with Mr. Cassano and AIG management a week before the key December 2007 investor conference. But the strange hieroglyphs from the world of financial derivatives were hard to decipher and ambiguous enough to support several readings.
Some of the broken phrases that could be made out: “Cash/CDS spread differential,” “need to quantify” and “could be 10 points on $75 billion.”
At this point, prosecutors knew that the jig was up, regardless if started out as a good jig or not. As much as they wanted to pin the near death experience of the financial world on this one shifty (and easily unlikable) guy, they couldn’t. The fact that no one that was at the meeting in Dec. ’07 could remember anything, “According to people familiar with the matter, no one at the meeting—including the author of the handwritten notes—recalled Mr. Cassano disclosing the magnitude of the accounting adjustments he was preparing to make,” certainly didn’t help matters. Especially since, for all we know, the partners’s chicken scratch could have been a recipe for pineapple upside down cake.
And after failing to nail Matthew Tannin and Ralph Cioffi back in November of ’09, the feds could hardly go to trial on such shaky ground. Sigh. OH well! Can’t always catch the (perceived) bad guys!
The Oscars Pretty Much Sum Up Everything That Happens In Public Accounting
Who is excited about the Oscars? Certainly not me, I don't watch movies. But whatever, […]
The PwC Hottie Scandal: A Female Perspective
Caleb likes to turn to me for all matters female-related (pay, the work-life lie, etc), so he asked if I would skip my CPA exam column today – since none of you sent me any questions to answer anyway – and give my opinion on the stupid PwC Ireland dbags who spread around pics of hotties.
“Sure,” I said, sharpening my claws.
First, have we NOT told you people over and over again DON’T USE WORK EMAIL FOR DEBAUCHERY AND GENERAL ASSHATTERY?! Speaking only for myself, I have specifically written here and on JDA at least a bazillion or more times warning of the dangers of sloppy conduct in a manner completely traceable by management, colleagues and clients.
What is it going to take to get this through your heads? I remind all of you that after Enron blew up every single email was made public by the Justice Department (and if you’re bored, you can search through said emails here but I warn you, some are gross and graphic even to me) so don’t think what you do on the company PP&E is limited to whomever you copy on your piggish emails.
And remember, with snitches everywhere, everyone has our email address and as obviously demonstrated by this whole PwC hottie email being sent to us first, chances are if you’re acting like an ass we’re going to find out and embarrass you. Call it our way of continuing to protect the public interest even though Caleb is retired from the profession and I am but an enthusiastic outsider without a CPA.
Second, I really don’t care if pigs decide to rank women in their office by hotness but if you’re going to do it, man up and attach cockshots so the girls can do their own ranking. You know, in the interest of fairness. If you’re not willing to apply the same sick standard to your own goods while contemplating the goods of your coworkers, leave the immature ranking to the bar and not extensive email chains. Seriously. If any of the PwC Hottie perps care to redeem themselves, cockshots may be addressed directly to me here. If I don’t receive any, I’ll assume that’s because you all are a bunch of shrunken cowards who aren’t getting any anyway.
Last but not least, don’t you guys have anything better to do? Seriously. This level of creepiness is just one level above stalking, frankly, and it is both disturbing and hilarious that these three PwC Ireland associates have absolutely nothing better to do than play Hot or Not on company time using company email. Can’t you just watch porn like SEC employees or play constant solitaire like normal folk wasting company time?
Sick. Entertaining and not all that offensive, just sick. I cannot speak for the rest of the female race and only for myself but I’m pretty sure many of them would also feel these idiots can possibly redeem themselves with cockshots. Commence to repentance, losers.