Oh Look, a Pissed-Off Stockholder Is Suing Mattel Directors and PwC
While a potential class complaint filed against Mattel and its auditor PwC by a group of Mattel investors currently sits in the U.S. District Court for the Central District of California, a separate lawsuit against directors of the global toy giant’s board and PwC was filed on May 21 in Delaware Chancery Court by a […]
Will Class Be In Session For Investors Suing Mattel and PwC Over Accounting Error Cover-Up?
Ah, we have an update on the class-action suit filed against Mattel and its longtime auditor, PwC, by investors who claim Mattel’s finance team and PwC auditors covered up an accounting error that affected the toy giant’s financial results toward the end of 2017. Bloomberg Law reported today: Mattel Inc. investors who accused the company of […]
Successful Whistleblower Slings Some More Mud at EY
“I didn’t feel I had a choice. I had to fight for justice. And any cursory examination of the facts of the case showed that I was clearly in the right. Given that, I have never been able to understand why EY fought a losing battle for so long.” — Amjad Rihan, a former audit […]
Lawsuit: Mattel Shareholders Are Holding PwC’s Feet to the Fire
Once the Wall Street Journal broke the story last November that Mattel’s finance team and PwC auditors reportedly buried an accounting error that affected the toy giant’s financial results toward the end of 2017, you knew there would be some fallout. First, Bloomberg followed the WSJ report by writing that the PCAOB would be investigating […]
Uh-Oh, PwC, You’ve Gotten the Attention of the PCAOB
Somebody at the PCAOB must have read the Wall Street Journal article last week about Mattel and its auditor PwC allegedly burying an accounting error tied to Mattel’s ownership of Thomas & Friends because everyone’s favorite mess of an audit regulator is reviewing PwC’s work, according to Bloomberg, and probably whether the firm broke any […]
PwC Probably Did Celebrate When It Helped Mattel Cover Up an Accounting Error
By now you guys have probably read the Wall Street Journal article yesterday that explains what Mattel and PwC did to bury accounting issues related to the value of the Thomas & Friends show for kids. If for some reason you’ve been too busy to surf the web or dick around on Reddit in the […]
EY’s Run of Bad Press Continues
If all the negative headlines EY has been dealing with (and deserved) since the Huffington Post broke the story last Monday about the firm’s now-infamous 2018 training seminar for women leaders weren’t bad enough, an exposé that airs tonight on BBC One won’t do anything to help EY’s reputation and once again sheds light on […]
Deloitte’s Brazil Firm Covered Up a Couple of Bad Audits
The big news in the international audit firm world today is an announcement by the PCAOB that Deloitte’s Brazil firm audited badly and then covered up that bad auditing, which is also bad. The whole thing involved a dozen auditors including the Brazil firm’s former Audit Practice Leader, former Risk and Reputation Leader and former […]
Marin County Adds ‘Racketeering’ to the List of Allegations Against Deloitte
Hell hath no fury like an obscure California county that feels completely gypped (to the point that they feel it’s fraudulent) by the largest professional services on Earth.
Marin officials fired another salvo in an escalating $105 million legal war with international computer consultants, filing a new lawsuit Thursday accusing them and a former county official of violating racketeering law in a bid to rip off taxpayers.
The new suit was filed against Deloitte Consultant LLP, software developer SAP and former assistant auditor-controller Ernest Culver, who served as project director of the county’s troubled computer installation before quitting to join SAP.
As you may recall, Marin County’s original suit against Deloitte for $35 million involved allegations of “fraud, misconduct and misrepresentation” which included using ‘neophytes’ on the implementation of the county’s ERP system. The new racketeering charges are especially interesting and the Marin Independent Journal has the details:
It alleges a conspiracy, asserting consultants wined and dined Culver and interviewed him for employment at the same time Culver was approving deficient work on the project, approving fee payments and helping line up new contracts.
“County taxpayers were charged for millions of dollars in services that Deloitte failed to properly perform” and residents were “defrauded of the honest services of a high-ranking county official,” according to County Counsel Patrick Faulkner.
Deloitte denied the allegations of the original suit, saying that Marin County was actually responsible for the snafu. However, and unfortunately for Deloitte, new shit has come to light:
Faulkner disclosed that the county has combed through its computer system to retrieve thousands of e-mails issued by consultants and Culver while they worked in county offices, providing a backbone for accusations leveled by the latest suit.
The complaint alleges six violations of the federal Racketeering Influenced and Corrupt Organizations Act by Deloitte and SAP, and three counts of illegal conduct against Culver, including a violation of the state anti-corruption statute.
So it doesn’t sound like there’s a smoking gun per se but enough back and forth that adds up to this:
The lawsuit, the county said in a press release issued late Thursday, claims that when problems with Deloitte’s work surfaced, Deloitte and SAP engaged in a “cover-up that included bribing Culver to falsely ‘approve’ Deloitte’s defective work, and silencing an SAP employee who tried to intervene on the county’s behalf.”
So, in other words, pretty bad stuff. The MIJ reports that “Settlement talks are expected and while the parties remain at odds, the latest court filing could spur negotiations.” Using our best translation skills, this more or less says, “Deloitte, SAP and Culver realize they’re fucked – begrudgingly – and will be going to the table any day now to sort things out.”
The Independent Journal also reports that SAP, Deloitte or Ernest Culver “could not immediately be reached.” Our own messages with Deloitte spokemen Jonathan Gandal and John La Place were also not immediately returned.
Marin County alleges racketeering in new lawsuit over computer debacle [MIJ]