Remember Longtop Financial Technologies? Deloitte resigned as auditors of the Chinese company back in May after LFT took some actions that were, shall we say, unusual for an audit client. Among them, “interference by certain members of Longtop management in DTT’s audit process; and […] the unlawful detention of DTT’s audit files.” And there may be some financial statement fraud going on, to boot. What’s even slightly weirder is Deloitte’s resig nt to Longtop’s Audit Committee that laid out the specifics:
[A]s a result of intervention by the Company’s officials including the Chief Operating Officer, the confirmation process was stopped amid serious and troubling new developments including: calls to banks by the Company asserting that Deloitte was not their auditor; seizure by the Company’s staff of second round bank confirmation documentation on bank premises; threats to stop our staff leaving the Company premises unless they allowed the Company to retain our audit files then on the premises; and then seizure by the Company of certain of our working papers.
Right. The auditors-almost-taken-hostage situation. Quite a doozy, this one. Based on the history between Deloitte and Longtop, one would think that Green Dot would jump at any chance to exact a little revenge on these shady bastards. NOPE!
From the crack squad at the SEC:
The Securities and Exchange Commission today filed a subpoena enforcement action against Deloitte Touche Tohmatsu CPA Ltd. for failing to produce documents related to the SEC’s investigation into possible fraud by the Shanghai-based public accounting firm’s longtime client Longtop Financial Technologies Limited.
According to the SEC’s application and supporting papers filed in U.S. District Court for the District of Columbia, the SEC issued a subpoena on May 27, 2011, and D&T Shanghai was required to produce documents by July 8, 2011. Although D&T Shanghai is in possession of vast amounts of documents responsive to the subpoena, it has not produced any documents to the SEC to date. As a result, the Commission is unable to gain access to information that is critical to an investigation that has been authorized for the protection of public investors.
“Compliance with an SEC subpoena is not an option, it is a legal obligation,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “The ability of the SEC to conduct swift and thorough investigations requires that subpoena recipients promptly comply with that legal obligation. Subpoena recipients who refuse to comply should expect serious legal consequences.”
Maybe the email/hand-written letter sent by carrier pigeon (whatever method of communication the Commission is using these days) got lost OR maybe no one at Deloitte Shanghai was in the translating mood that day but it seems slightly strange that Deloitte would just blow this off especially since Longtop screwed them 70 ways to Sunday. Of course these documents could show that Deloitte was really a bunch of pansies and we’re letting LFT run the show until the gross negligence got to the point that they simply couldn’t ignore it anymore. It’s anybody’s guess, really.
UPDATE: The Journal reports that Deloitte claims to be “caught in the middle of conflicting demands by two government regulators,” which could be seen as extremely convenient.
SEC Files Subpoena Enforcement Action Against Deloitte & Touche in Shanghai [SEC]
Court Filing [SEC]
Also see: S.E.C. Asks Court to Force a Release of Papers From China [NYT]
Good. I hope it gains traction.
I hate when people compare ANYTHING to slavery. This isn’t quite as bad as saying that pro athletes are slaves, but it’s still pretty ridiculous. First of all, as opposed to an actual slave, you can fucking leave anytime you want. Second, $65k is a pretty damn good starting salary for someone who doesn’t know shit, and therefore isn’t capable of contributing much of anything to their team or the company. You’re literally getting paid to learn. And you get benefits, employment rights, a brand new laptop computer which you can use for personal shit, and you get to work in an air conditioned office. Shut the fuck up about being a slave, you lazy bastards. If you don’t like it, go work at McDonald’s.
B4V – great comment. I’ve been working with graduates in my current advisory firm. Geez they are bad; they know nothing irrespective of their impressive paper qualifications. Calling them sh#t is a little harsh though. At least with sh#t you could use it as fertilizer.
Very well said.
Please don’t call them lazy or call them names. They do have a point.
I worked hard for Big4 for more than 15 plus years with tons of positive contributions and hours for even 1/3 benefit she is mentioned.
At your sick bed, Big4 is no where to be found. Health comes first.
Don’t mock Mcdonald, if they treat them better – and with respect, why not. It is an honest living and I respect them more.
A Deloitte Partner’s response:
“12 – 14 hours a day? That’s nothing. I used to work 20 hours a day. These young people do not know what hard work is”.
Well mr Deloitte partner, how many hours a week do you require from your junior accountants?
Please also note that the salaries referred to in the TikTok are in Australian Dollars. AUD 67k at the current exchange rate is less than USD 50k. Not that great of a salary at all.