We’re sure that some of you need some cheering up, so we’ll throw out a little participatory exercise.
The BBC ran a piece yesterday asking readers to predict their year ahead in three words. We’ve noticed that brevity isn’t a strong suit for some of you so this should be a nice challenge.
In the comments, describe your year ahead in three words. If we get enough good submissions we’ll run a poll tomorrow because we’re sure we won’t want to work that hard. Keep it relevant people. ‘Pwn more noobs’ and the like will be ignored with extreme prejudice.
Impress us.
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LandAmerica: Victims of Bad Marketing or Ponzi Schemers?
Editor’s note: Adrienne Gonzalez is founder and managing editor of Jr Deputy Accountant as well as regular contributor to leading financial/investment sites like Seeking Alpha and GoldmanSachs666. By day, she teaches unlicensed accountants to pass the CPA exam, though what she does in her copious amounts of freetime in the evening is really none of your business. Follow her adve and CPA-wrangling on Twitter @adrigonzo but please don’t show up unannounced at her San Francisco office as she’s got a mean streak. Her favorite FASB is 166.
There’s nothing we appreciate more than a really juicy tale of crappy auction rate securities, fire sales ignored by regulators, and bankruptcy when the scam runs out, especially when the perps happen to be audited by a Big 4 firm you may have heard of (there are only 4, just throw a dart).
Excuse our bad grammar and run-on sentences, we just don’t know where to start with this.
More, after the jump
Once upon a time not that long ago when a tarp was just something you brought camping, LandAmerica was at the top of the 1031 exchange game. That entire story is a tad too long for today’s 140 character attention span so let’s fast-forward to the part where there are even entire forums dedicated to discussing why regulators missed LandAmerica. In short: LandAmerica exchangers are pissed off.
To get a hint at just how pissed off, take a peek at what the forum has to say:
Then LandAm files Bankruptcy proceedings on their 1031 subsidiary, saying: “…you 1031 clients of ours are ‘…going under the wheels of the Bankruptcy bus” because “we” made bad decisions in $290 million ARSs. Wow! a $300 million “wash.” A “Back-Door” merger without the “toxic” ARS funds. LandAm1031 clients get hosed!
Burn! Those are some wild accusations, is it fair to spit such venom at LandAmerica?
Well… um… yeah, actually. And LandAmerica has due diligence to blame Fidelity has due diligence to thank.
On November 24th, 2008 LandAmerica went into free-fall after Fidelity announced that it would be pulling out of the tentative deal (subject to final due diligence). Given the BBB mark of the beast by Fitch shortly thereafter, LandAmerica slumped off to bankruptcy court. Meanwhile, those who found themselves at the short end of LandAm’s 1031 exchange stick started getting letters from the IRS while their money was off in SunTrust accounts getting killed by illiquid auction rate securities without their knowledge. You’d think more people would be discussing something that involves millions of misappropriated investor dollars but who are we to judge?
As with most (alleged) Ponzi schemes, the “scheme” escapes detection until the money runs out. And when Fidelity backed out of the LandAmerica deal, LandAmerica had what can only be called a Madoff Moment.
Making this saga even better is, that for some completely bizarre reason that escapes us, the Richmond Fed has decided to hire LandAmerica’s former legal counsel Michelle Gluck to serve on their team as Chief Legal Officer (perhaps they are taking a cue from the Fed Board of Governors who hired an ex-Enron PR girl awhile back?). We truly love hate to wildly speculate here but this goes against logic, which we are generally used to seeing from Richmond Fed President Jeffrey Lacker and his bank. “With her broad range of leadership experience and extensive legal expertise, I know she’ll make great contributions to the Bank and to the Federal Reserve System,” he said of his new hire.
So what exactly is Richmond trying to do here? With credentials like that, I’m only slightly concerned now.
We’ll let you know if we ever figure that out. The SEC couldn’t be bothered to comment about it and reminded me why I don’t like picking up the phone.
We did however speak with one angry LandAmerica creditor who has a lot of questions and no answers and we’d be happy to update you with his comments as the investigation unravels. Oh wait, who said there was an investigation? Could someone kindly forward this to the SEC? Some of us have a day job.
Going Concern Presents: Accounting Horoscopes — Tax Day Edition
Did anyone catch the blood moon last night? That wasn't a rare astrological event, it […]
Accounting Rulemakers Already Talking Plan B on Fair Value
Sounds like Bob Herz and Sir David Tweedie are phoning it in with regards to fair value rules.
Herz and Tweedie and their respective accounting wonks met in Norwalk, CT on Monday and they’re all but admitting that there’s no chance that they’ll get on the same page:
At a joint meeting in Norwalk, Connecticut on Monday, members of the London-based International Accounting Standards Board (IASB) and U.S. Financial Accounting Standards Board (FASB) sparred over whether fair value, or “mark-to-market,” accounting rules should be expanded to a broader array of financial assets, such as loans and deposits.
In a move opposed by the banking industry, the FASB has proposed that all financial instruments be valued at market levels, while the IASB has proposed to have those assets valued at “amortized cost,” which would mostly provide information about expected cash flows.
“If FASB and IASB can’t agree on mixed model or full fair value model … the next best thing is something to move between the two,” Sir David Tweedie, chairman of the IASB, said on Monday…”By the end of 2010… if we can’t get it together, we should be appreciably together,” Tweedie said.
Plan B is already in full effect! Instead of one fair value rule, the two standard setters will provide a “presentation for fair value for more financial assets on corporate balance sheets so that investors would be able to quickly reconcile numbers in U.S. Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).”
Some board members are worried that this approach may be too confusing, however. Confusing financial statements? That’s only a problem for average investors. No biggie.
Oh, well. We know 2010 is coming up fast and those politicians get impatient when the bank lobbyists are threatening to cut off the money. Thanks for trying guys. You did your best.
Accounting boards try to reconcile fair value views [Reuters/Emily Chasan]