Swiss Parliament Backs UBS Pact [WSJ]
After a short standoff in Swiss parliament, Swiss lawmakers approved the agreement with the U.S. to turn over the remaining names of UBS clients, per the agreement between the two countries. The lower house dropped the referendum proposal that would have delayed the release of the names and likely caused UBS to miss the August deadline which would have resulted in new charges against the Swiss behemoth.
The Journal reports that a Swiss government is prepared to release an additional 1,200 names following the initial 500 released last year.
Lawmakers Weigh Changes to stor Protections [Bloomberg BusinessWeek]
Congress is kicking around the possibility of an office within the SEC to respond to whistleblower complaints. Brilliant!
McGladrey Mourns the Loss of Former Partner Ray Krause
Mr Krause passed away on Monday after 40 years of service to both McGladrey and the accounting profession. He served on many professional standard setting groups including AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council. H was memorialized by his friend and colleague Jay Hanson, McGladrey’s National Director of Accounting:
Ray died unexpectedly yesterday. He was on vacation in Orlando with his nine-year-old grandson doing what he loved—visiting Disney World.
Before his retirement six years ago, Ray spent more than 40 years with McGladrey. He practiced in a number of locations, including a long stop in the national office as national director of accounting. He retired as partner in 2004 but continued to work for the national office part-time in Rockford, Ill.
During his long career, he served in a number of professional standard setting groups, including the AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council.
Ray is best remembered for being the consummate professional and his easy-going style. He was very well respected in the accounting profession. Comments coming in from those that knew him include: “Ray was one of the true gentlemen of the accounting profession,” and “Ray was about as fine a human being as there is.”
He was a great mentor to many colleagues in the national office. His style of giving his complete attention to whomever he was talking to, providing understandable explanations for complex topics, probing deeply for all the facts, and his uncanny ability to help draw a conclusion with full understanding will be greatly missed. Ray could convey the message to someone that they were getting to the wrong conclusion with such delicacy that you didn’t even feel it, and felt good about the answer. He knew many of the “back stories” about how and why some of the most complex accounting standards came about, which is often important to understand what they mean.
Ray will be greatly missed by his daughter, son, four grandchildren and other family and friends. McGladrey and the accounting profession have also suffered a great loss.
Inquiry Ends on Cassano, Once of AIG [WSJ]
The SEC has dropped its investigation of Joseph Cassano, the former head of AIG’s Financial Products Unit, which means he won’t face civil charges in the unit’s role in financial crisis. The SEC is also declining to pursue charges against another AIGFP executive, Andrew Forster, who was also under scrutiny.
Senator sees big reporting gap in stock options [AP]
Senator Carl “Shitty Deal” Levin and new Snooki BFF John McCain “have proposed legislation that would require that the tax deduction for stock options not exceed the expense for options reported in financial statements.”
The two are a little rankled about the $52 billion gap between the amount of stock option expenses recognized for financial reporting purposes and the expense reported for tax purposes. Guess who’s getting the short end on that one?
Bank auditors were fully involved in developing report [FT]
John Hitchens, head of the Institute of Chartered Accountants of England and Wales (ICAEW) and a PwC Partner would like to dispel any notion that auditors will resist reform after taking it on the chin for the financial crisis:
As chairman of the ICAEW working group that produced the proposals, I would like to correct this impression.
Bank auditors from the six largest audit firms were fully involved in developing the report and supportive of all its recommendations, including the proposal that banks develop summary risk statements which auditors would then give comfort over.
U.K. Scraps FSA in Biggest Bank Overhaul Since 1997 [Bloomberg]
Chancellor of the Exchequer George Osborne will do away with the Financial Services Authority, replacing it with three new regulatory bodies and giving most of its oversight powers to the Bank of England.
Intuit Works to Restore Online Access [WSJ]
Any individuals or small businesses that use TurboTax, Quicken and QuickBooks have been in a world of hurt as online access has been down, down, down. “Some Intuit websites were beginning to come back online late Wednesday afternoon,” according to an Intuit spokesperson. The situation is fluid.
Fannie Mae, Freddie Mac to delist from NYSE [CNN]
Meant to mention this yesterday since it was the DoD but you know how it goes. Anyway, see you another life FNM and FRE.
There’s been a fair amount kvetching, Monday-morning QBing, and just plain hating on auditors lately. Most of it deserved. That said, there are still laws on the books that say you can’t dismiss them entirely and tell them bald-faced lies whenever you want.
Bruce Karatz was the CEO of KB Homes and he was convicted for, among other things, lying to Ernst & Young:
The 64-year-old faces 80 years in prison after being convicted of four felony counts including wire fraud and lying to his company’s auditor, Ernst & Young, about the matter, according to the U.S. attorney’s office in Los Angeles. He was acquitted on 16 other counts.
Jesus, 80 years? We’re no expert on sentencing guidelines but using simple arithmetic, that’s 20 years per count. We’re all for justice but that’s some serious FPMITA prison time. And the way judges have been handing out sentences lately, we wouldn’t expect leniency.
• 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.
With all the outrage around big bonuses more executives (read: Jamie, Lloyd) will be getting larger portions of their payouts in the form of equity. This is good news for those of you that can’t get enough of FAS 123(R) or Topic blah blah blah in the codification.
Morgan Stanley is looking for an associate or senior associate to join their financial controllers group that will specialize in compensation reporting, preferably a CPA or CPA candidate with proficiency in equity-based compensation plans.
Get the details after the jump.
Company: Morgan Stanley
Title: Associate/Sr Associate – Financial Controllers (Compensation Accounting)
Location: New York, NY
Experience: 2 – 5 years
Description: Compensation Accounting Team within HR Controllers is seeking to fill a newly created position at the Associate or Sr. Associate level. This position will be responsible for functions related to compensation reporting and will work on the accounting related to the firm’s equity-based compensation plans.
Responsibilities: Managing the reporting of actual and estimated earnings per share information for external reporting purposes and monthly forecasting to senior management; Monthly, quarterly and year-end financial close activities: general ledger maintenance, journal entries and account reconciliations; Booking amortization for stock-based compensation performance awards and cash-settled equity awards; Maintaining a strong control environment and audit documentation over various share reporting & earnings per share related areas; Improving the reporting and analytics related to equity-based compensation plans.
Skills: B.A./B.S. Accounting or Finance; CPA or CPA-candidate preferred; approximately two to five years related work experience in financial accounting and/or financial reporting preferred; financial services industry and stock-based compensation experience preferred; proficiency in technical accounting research skills related to earnings per share and stock-based compensation preferred (e.g., FAS 128, FAS 123R, ASC 718, ASC 260).