Scoping | 07.02.09

• Staffer at SEC Had Warned Of Madoff - "An investigator at the Securities and Exchange Commission warned superiors as far back as 2004 about irregularities at Bernard L. Madoff's financial management firm, but she was told to focus on an unrelated matter, according to agency documents and sources familiar with the investigation." [Washington Post]
• SEC scraps brokers’ votes in board elections - "In a move hailed as a victory by activist investors, the Securities and Exchange Commission on Wednesday scrapped a controversial 72-year-old rule that allowed broker-dealers to vote in corporate director elections on behalf of their clients without specific instructions. The change, first proposed by the New York Stock Exchange three years ago, comes amid public anger over lax oversight of companies taking on excessive risk." [FT.com]
• Payrolls Fall More Than Forecast, Unemployment Rises - "Unemployment is projected to keep rising for the rest of the year just as the income boost from the stimulus package fades, undermining prospects for a sustained rebound in household purchases, analysts said." [Bloomberg]
  

Sphere: Related Content

Review Comments | 07.01.09

• Why Everyone Else Is Taking This Week Off - We thought it totally had to do with you being gluttons for punishment. Get the hell out of there! [Clusterstock]
• Madoff Lacks What Skilling, Ebbers, Fastow Had: Ann Woolner - Andy Fastow got letters urging leniency? Now we've heard everything. [Bloomberg]
• Fannie, Freddie to expand refinance program: source - Apparently, just because you're loan to value ratio is 125% doesn't mean you're going to abandon your house. [Reuters]
  

Sphere: Related Content

Happy Codification Day!

We warned you that this day was coming! The FASB issued Statement 168, The FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 on Monday so...

...Forget everything you've ever learned about the accounting literature because it's all changed but GAAP hasn't. They swear. Oh except for something about private, non-governmental companies and their revenue recognition. We're sure that won't affect any of you.

Check out the Codification website here.

Good summary at: Codification Nation [FEI Financial Reporting Blog] Sphere: Related Content

Vijay Singh Gives Up Ponzi Scheme Sponsor, Potential Pick Up for a Big 4 Firm with Longevity

Via Clusterstock, "The indispensable Darren Rovell says the Fijian golf god has finally given up the Stanford-wear...Developing..."

This after Clusterstock reported as recently as April 12th that the Vij was still wearing Stanford sponsored shwag.

We got to thinking, shouldn't one of the non-KPMG Big 4 firms pick this guy up? The Radio Station has picked their horse and is perfectly content with consistent 2nd place finishes so one of the other firms should totally get on this guy. Chances are Vij and Lefty don't like each other anyway, so we might as well get some rival sponsorships going as well, hadn't we?

Plus, Vijay is notorious for being a gambler so maybe his pick would indicate who he's got some sweet action on re: which firm will go down first or last (depending on the over/under, obv). Just a thought.

Vijay Singh Stops Wearing Stanford Gear [Clusterstock] Sphere: Related Content

We Know What You're Doing PwC and We Don't Like it

A little more salt on the wound known as Satyam for PwC, courtesy of Re: The Auditors (RTA). We posted yesterday that PwC really didn't audit Satyam, that it was a P. Dub associate firm, Lovelock & Lewes.

RTA makes the excellent point that the confusion about who is actually doing what is no accident:

The fact that no one except those closest to it understand the structure is not by default but by design. It is designed to accomplish just exactly what they are trying to accomplish now - to weasel out of responsibility and liability when something goes wrong. But it’s not unique to India or PwC. In some countries, New Zealand for example, there may be many firms operating under the KPMG New Zealand umbrella but they are no more aligned financially or strategically than Christchurch is with Tokyo.

So the firms' international entity structure is confusing precisely because they know that when the shit hits the fan, they can always jump behind corporate plausible deniability. This is exactly what happened in the BDO case (as RTA notes) via the "wedding planner" defense.

The firms have international presence, marketing themselves as international companies, yet hide behind an enigmatic entity structure to save their asses when they mess up.

Well played...One jury already bought it. P. Dubya better be saying their prayers that they're just as lucky...

PwC Global Board: “Risk And Quality Top Priorities” [Re: The Auditors] Sphere: Related Content

DOJ to UBS: We Weren't Kidding About You Naming Names

We've been covering the DOJ/UBS back and forth and in today's Financial Times, the DOJ did not leave any room for interpretation.

A court document quotes the DOJ, "UBS must disclose the identity of every US taxpayer with an undisclosed UBS account so that every US customer with an undisclosed account will get right with their government."

Even though the Toblerones bribe didn't work, UBS is not backing down:

UBS has defended itself against the summons, arguing that acquiescence would involve breaking Swiss law and such issues are best negotiated by governments, rather than legal actions against companies. The bank’s position has been upheld by the Swiss government and important trade federations.

It's on then bitches! They go to trial on July 13th. Bring the chocolate UBS, we're going to need the caffeine.

US steps up legal fight on UBS clients [FT.com] Sphere: Related Content

Scoping - 7.1.09

Calif. Fails to Break Budget Deadlock [New York Times]

Citi raises rates on millions of credit cards: report - 'Cause Citi is hurting too, America! [Reuters]

Do Not Dare To Suggest Dennis Kneale Is An Idiot [DealBreaker]

Finance Lobby Cut Spending as Feds Targeted Wall Street [WSJ] Sphere: Related Content