Accounting News Roundup: SEC Image Makeover is a Work-in-Progress; Washington Considers Increasing Sales Tax on Beer; Ex-CFO in Backdating Trial Blames Dead CEO | 04.07.10
• SEC faces setbacks, skepticism in trying to reform its enforcement image [WaPo]
Whether you believe it or not, the SEC is trying like hell to turn it’s image around. As you know, this is not a small challenge when you check down the list of ball drops and/or embarrassing moments. Plus, when Real American Hero Harry Markopolos repeatedly refers to the SECstaff as idiots, who’s not going to believe him?
Tasked with this turn around, Mary Schapiro and Rob Khuzhami are on the offensive, doubling the number of investigations from ’08 to ’09, as well as doubling fines. Emergency stop actions have also increased over 80%, according to the Commission’s data.
Yet, some remain unconvinced, like Commissioner Luis Aguilar who was quoted in the WaPo, “I’m looking to see whether or not all of the new initiatives are actually resulting in improved sanctions. I don’t yet see the empirical evidence.” Patience, Luis. We hear there’s a couple of things possibly in the pipeline.
• Beer Today, Taxed Tomorrow [Tax Girl]
Everyone in Washington State that isn’t a recovering alcoholic (or a teetotaler) should probably start freaking out. WA is considering a “temporary” sales tax increase to 50 cents per gallon, or 43 cents per sixer, sayeth La Tax Chica. The current tax is 15 cents per six pack.
What’s worse (for most anyway) is that only “big-brand” beer is subject to the tax, leaving the micro-breweries alone and TG thinks this will be challenged as unconstitutional for protectionism. In our opinion, punishing people that drink bad beer is a completely acceptable sin tax, since they choose to drink the bad beer, unconstitutional or not. It definitely doesn’t help the college kids though; that’s an $8 extra on a keg.
• Ex-Maxim CFO Blames Dead Boss at SEC Backdating Trial [Law.com]
Carl Jasper is the former CFO of Maxim Integrated Products and is currently on trial for backdating stock options. This is the first case of this kind since the SEC started cracking down on the practice a few years ago. Mr Jasper is relying on the defense that his dead boss, Maxim founder Jack Gifford, is to blame.
The SEC finds this all too convenient:
Mark Fickes delivered a crisp, scripted opening statement for the SEC, beginning simply: “This case is about cheating and then lying about it.” Fickes hammered on the hard-to-ignore fact that Jasper is an accountant who presumably knows accounting rules about granting stock options.”When it came to accounting, no one knew more at Maxim than the defendant,” he told the jury.
Yeah, so that could be a bit of a problem for Jasper which is probably why he invoked his 5th Amendment privilege.