As expected, James Davis, Stanford Financial’s Chief Number-Maker-Upper has entered his not guilty plea but his counsel has stated that his client will plead guilty to all the charges against him as early as next week. The initial plea has been made in order to finalize the plea agreement with Davis prior to his pleading guilty
This is all occurring while Stan the Man’s attorneys are in New Orleans appealing a Houston judge’s ruling that he has to pump iron in prison throughout his trial. Stan’s attorneys continue to maintain that their client is NOT a flight risk, which is kinda like saying that Bernie Madoff is NOT in jail.
Ex-Stanford CFO to plead guilty within 2 weeks: lawyer [Reuters]
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Memo to CFOs: Layoffs, Frozen Salaries Don’t Always Save the Most Money
Layoffs, pay freezes, pay cuts. Pretty simple cost cutting solutions for CFOs who’ve got tight budgets. Unfortunately, the slash and burn tactics for personnel may have been better applied in another area – inventory.
A recent survey performed by Greenwich Associates of midsized and small company “financial decision-makers” found that, in particular, midsized companies ($10 million to $500 million in revenue) that reduced their inventory, on average, saved 30% more ($520k inventory vs. $400 layoffs).
While that’s great news, the unfortunate part is that only 17% of the companies survey bothered with that particular cost saving strategy while 47% of those survey used “staffing reductions.”
The survey also found that while 37% of used pay freezes to reduced costs with an averaged savings of $245,000. Crunching the numbers, that’s nearly 53% less savings than the inventory reduction savings.
Of course, not all companies have inventory in the dusty-stacks-of-pallets-in-a-warehouse sense. This is especially true of the professional services/financial services area where, unfortunately, the staff are sometimes considered to be inventory.
CFO of the Week: Chen Tang
Not to mention father of the year and buddy for life.
Chen Tang, a former CFO of a private equity fund in San Francisco, is being accused of running an insider trading ring that includes friends, relatives, and his two daughters, aged 9 and 11.
Allegedly the ring made off with $8 million trading on non-public information related to Tempuc-pedic International, Inc. and Acxiom Corporation.
Tang’s daughters are considered relief defendants, as trades were carried out in brokerage accounts opened in their names. Personally we’d like to see them charged as the masterminds in this case but nothing in the complaint indicates that they knew anything about the scam.
The SEC stays on a roll with this latest bust, however this is the first case that we’ve heard of that includes minors (but still probably have maturity levels that are above Mark Cuban’s). The SEC obviously has to maintain the blind justice concept, so no mercy will be shown on the two pre-teens who probably spent the money on Miley Cyrus tickets.
The SEC’s latest haul includes two kids, aged 9 and 11… [FT Alphaville]
SEC Charges Former CFO and Six Relatives and Friends in California-Based Insider Trading Ring [SEC Press Release]
GMAC CFO Bolts Two Weeks After TARP Testimony
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
Private equity firm Providence Equity Partners announced on Tuesday that it had hired Robert S. Hull, GMAC Financial Services’ chief financial officer.
Hull will join the firm, which specializes in media, entertainment, communications and information companies, as its CFO in early April. He succeeds Raymond Mathieu, who will become a managing director focused on special projects for the firm.
The 46-year-old Hull was CFO at GMAC since 2007. He was a member of the beleaguered lender’s executive committee and served briefly on its board of directors.
Previously, he held a series of finance positions at Bank of America from 2001 to 2007, most recently as chief financial officer of the company’s global wealth and investment management business.
GMAC has received $17 billion in government bailout funds and hasn’t recorded a quarterly profit since the fourth quarter of 2008. Indeed, it has lost money in nine of the last 10 quarters and lost over $10 billion in 2009.
Hull was paid $4.9 million last year.
The departure comes just two weeks after Hull had to testify before a Congressional Oversight Panel regarding the U.S. government’s assistance to GMAC under the Troubled Asset Relief Program.
In a report regarding Hull’s departure, Standard & Poor’s laid out GMAC’s many troubles, which include “resolving strategic considerations for several business lines, most notably the mortgage operation; executing its plans to diversify beyond providing auto-finance products and services to GM and Chrysler dealers and retail customers; and coping with a still-fragile economy.”
Given all those challenges, the rating agency concluded, “it is not surprising to see turnover at all levels of the institution.”
Perhaps that lack of surprise is why GMAC, for its part, didn’t even bother putting out a press release over the departure, opting to make only a two-sentence filing with the SEC:
“GMAC Financial Services today announced that Chief Financial Officer Robert S. Hull has elected to depart the company at the end of March to pursue another career opportunity. The company will conduct an internal and external search for potential CFO candidates in the interim.”