Does the ‘P’ in KPMG Stand For ‘Probes?’
Because we have two new probes into KPMG to tell you about. First, two weeks after the quality of its audit work was called “unacceptable” by the Financial Reporting Council, KPMG is being probed by the United Kingdom’s accounting watchdog over its audit of British beverage wholesaler Conviviality’s financial statements, according to the Financial Times. […]
Are the Brits Getting Serious About a Big 4 Antitrust Probe?
Now that everyone (well, not everyone) has fully recovered from Royal Wedding 2011, it’s time to get to the bottom of this.
A U.K. House of Lords committee investigating the financial crisis said in a March report that the firms, which audit 99 of the 100 largest U.K. companies, should be probed by the London- based Office of Fair Trading to determine whether their market dominance wrongfully limits choice. The probe could be the most high-profile for the agency since it investigated banks’ equity underwriting practices — an inquiry that closed without any action being taken.
The OFT would help determine whether loan terms unfairly favor Deloitte LLP, Ernst & Young LLP, PricewaterhouseCoopers LLP and KPMG LLP, said Robert Bell, an antitrust lawyer in London with Speechly Bircham. The agency, which has kept the industry under review since 2002, will make a decision on the probe later this month, said spokeswoman Kasia Reardon.
‘Big Four’ Audit Firms May Face U.K. Antitrust Investigation This Month [Bloomberg]
SEC Might Bring Civil Charges Against Ernst & Young Soon, Maybe
Charlie Gasparino is reporting that the SEC probe in the Lehman Brothers bankruptcy is “ramping up” and that the Commission is under hella-pressure to bring civil charges against Dick Fuld, Ernst & Young and whoever else is on the list.
It’s unclear if the SEC can muster the necessary proof to show that top executives like former CEO Richard Fuld or the firm’s outside auditor Ernst & Young intentionally misled investors about the health of Lehman’s balance sheet in the months before it filed for bankruptcy in mid-September 2008, according to people close to the probe…It’s unclear when any charges might be filed by the SEC, but people close to the inquiry say the SEC believes it does bring one, it must do so “very soon,” possibly within a few months given a combination of the outrage over the report’s findings and that Lehman’s bankruptcy is going on two years old.
Okay, so things are urgent but not that urgent. It’ll be Father’s Day maybe the 4th of July by the time we get a Mary Schapiro smackdown.
But that’s not all! Things are really serious at Ernst & Young now because Charlie reports that E&Y “has hired high-profile white-collar attorney William McLucas as its outside counsel in the matter, people close to the firm say. McLucas had been the SEC’s enforcement chief before entering private practice.” We checked with our friends over at ATL and it turns out that Mr McLucas is a partner at high-powered WilmerHale and was lead counsel to the special committee of the Enron Board that reported “hard-hitting findings” (sayeth he).
Since Mr McLucas doesn’t take shit from the likes of short-seller Jim Chanos, we’ll take Charlie’s word that things are pretty serious over at 5 Times Square.
E&Y spokesman Charlie Perkins declined to comment.
SEC Probe of Lehman Picking Up Steam [FBN]
Gasparino: SEC May Be Forced To Do Something About This Whole Lehman Thing [DB]