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Krispy Kreme’s Internal Investigation Reports On Accounting Problems
A special committee of Krispy Kreme Doughnuts, Inc.’s board has concluded its investigation of accounting problems and determined that the company engaged in earnings management — usually a polite way of saying accounting fraud — that it blames on its former CEO and COO. A summary of the committee’s report (here) adopts an interesting tone,…
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ABA Supports Reporters Shield Statute
The American Bar Association issued a news release here supporting a journalist’s shield statute. Interestingly it did not take a hard line approach of protecting all sources, but rather provided for some exceptions. The essence of the news release provides that: "To overcome the reporters’ shield, the new association policy would require a showing that…
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More KPMG Tax Shelter Dirty Laundry Aired
Much of the attention paid to KPMG’s abusive tax shelters involved individual clients of the firm, many of whom were officers at corporations that were audit clients. A Wall Street Journal story (here) discusses sales of shelters to corporations to lower their tax liabilities, and notes that two senior partners in the tax division were…
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What If You Lie in an Internal Investigation?
Internal corporate investigations are all the rage these days as companies seek to demonstrate their level of cooperation as part of an effort to forestall criminal charges. Corporations almost routinely turn over the results of their investigations to prosecutors and civil regulatory authorities, and the reports usually contain statements — many of them personally incriminating…
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Kodak’s Restatement Is Being Investigated by the SEC
In its most recent 10-Q (here), buried somewhere around page 66 under "Legal Proceedings," Eastman Kodak Co. makes the following disclosure: During March 2005, the Company was contacted by members of the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) concerning the announced restatement of the Company’s Financial Statements for the full…
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Maybe This Explains Why Philly Isn’t So Pretty These Days
The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced the indictment of former Streets Department Commissioner William Johnson, Assistant City Managing Director David Robinson, and former Executive Director of "Keep Philadelphia Beautiful" Mark N. Viggiano on conspiracy and theft of government program funds for taking $13,000 from the "Keep Philadelphia Beautiful:" fund and…
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Pleading Guilty in a New York Minute
A post yesterday (here) discussed the Independent Inquiry Commission’s report on corruption in the UN’s Oil-for-Food program, and that the UN would lift the immunity for two officials identified in the report as having accepted bribes. Later that afternoon, one of the officials, Alexander Yakovlev, a former UN procurement officer, entered a guilty plea in…
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Former WorldCom Accounting Director Receives a Year-and-a-Day Prison Term
Former WorldCom director of general accounting Buford Yates received a prison term of one year and a day from U.S. District Judge Barbara Jones for his role in the massive accounting fraud at the company. By having the extra day added to the sentence, Yates is eligible for the 15% good time credit to reduce…
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Two Officials in Oil-for-Food Program Lose UN Immunity
The Independent Inquiry Commission Into the United Nations Oil-for-Food Programme issued its third interim report (here) and identified two senior officials in the Programme who it concluded engaged in criminal wrongdoing. The report analyzes the role of Benon Sevan, the Executive Director of the UN Office of the Iraq Programme, and Alexander Yakovlev, a UN…
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SEC Files Fraud Charges Against Former Citigroup Executives
The SEC filed a civil fraud action against two former Citigroup executives, including Thomas Jones, the former head of its Global Investment Management division, for setting up an affiliated transfer agent to handle mutual fund transactions for Citigroup customers but did not pass along the savings to those investors. As discussed in an earlier post…
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