Accounting Fraud

News & Analysis as of

This Week In Securities Litigation

The PCAOB filed a settled action involving an auditing firm in which the consent order of settlement was based on admissions of facts. The approach is similar to the one adopted by the SEC in which the Commission requires...more

This Week In Securities Litigation

September 30th Madness dominated this week. The drive for stats was evident as the Commission stacked up cases like cord wood at a pace seldom seen. Twenty-two municipal bond actions were filed in one swoop; an insider...more

Financial Fraud: An SEC Staple?

Since the SEC announced the formation of its Financial Fraud Task Force two years ago the agency has struggled to establish this once enforcement mainstay as a current staple. Some commentators have suggested that a trend is...more

This Week In Securities Litigation

The Commission responded to critics of its administrative proceedings this week, proposing changes to the Rules of Practice which govern them. If adopted the new rules would modify the time period within which the actions...more

SEC Files Settled Financial Fraud Action

Financial fraud actions have traditionally been a staple of SEC Enforcement. During the market crisis, however, the number of those cases waned. Following the formation of a task force focused on financial statement fraud,...more

SEC Charges Four Individuals and Nutrition Company for Failure To Disclose Executive Perks

On September 8, the SEC charged a sports supplements and nutrition company, its former audit committee chairman and three of its current and former executive officers with committing accounting, disclosure and other...more

Second Circuit Expands Scope of Dodd-Frank Anti-Retaliation Provisions, Sets up Chance for Supreme Court Review

Once upon a time, Daniel Berman was the finance director of Neo@Ogilvy LLC, a subsidiary of the publicly-traded WPP Group USA, Inc. He did not find a handsome prince or princess there. According to the allegations of a...more

The SEC, Second Circuit, and Whistleblowers: Searching For Ambiguity

The SEC’s interpretation of the Dodd-Frank whistleblower provisions prevailed in a recent Second Circuit decision, creating a circuit split that could be heading for the Supreme Court. Specifically, the Circuit Court deferred...more

Second Circuit Defers To SEC Interpretation Of “Whistleblower” For Purposes Of Retaliation Suit Under Dodd-Frank

In Berman v. Neo@Ogilvy LLC, a three-judge panel of the Second Circuit reversed and remanded a decision of the SDNY, which had dismissed a claim for retaliation by a former employee on the basis that Dodd-Frank’s...more

Second Circuit Splits With Fifth Circuit Setting Up Possible Supreme Court Review: Are Internal Whistleblowers Protected Under...

On September 10, 2015, a divided panel of the Second Circuit issued an opinion in Berman v. Neo@Ogilvy LLC, No. 14-4626 (2nd Cir. Sept. 10, 2015), creating a split with the Fifth Circuit on an issue that has also divided...more

Second Circuit: Dodd-Frank Protects Internal Whistleblowers

On September 10, 2015, the Second Circuit issued its highly anticipated decision in Berman v. Neo@Ogilvy, ruling (in a 2-1 decision) that Dodd-Frank’s whistleblower protection provision applies to internal complaints (i.e.,...more

The BHP Case and Enforcement of The FCPA’s Internal Controls Provision

Ed. Note-today we have a guest post from Jean-Michel Ferat ,CPA, CFF is a Managing Director in the Washington D.C office of the Claro Group around his views on the BHP Billiton enforcement action. Much has been made in...more

SummerReading List: 4 Books Worth Adding to Your Library - A Few Good Reads to Help You Understand the Mind of Your Consumer When...

In a previous life, I worked as an advertising copywriter. Aside from being paid to write (which was cool), I spent my days trying to understand the motivations that drove a consumer to buy what they bought (which was really...more

Expect Focus - ONLINE HEALTH CARE: NOT SO FAST Telemedicine Hits A Few Speed Bumps, Volume II, Spring 2015

In This Issue: - IN THE SPOTLIGHT • Risky Business: Common Cyber Security Risks, Expensive Consequences - LIFE INSURANCE • Ninth Circuit Finds Bonus Indexed Annuity Delivers Exactly...more

Statutory Accounting Fraud Under RICO

Echoing New York’s regulatory criticism concerning the use of captive reinsurers and similar allegations in recent class actions filed against several New York life insurers, an annuity contract owner has filed a putative...more

Credit Crunch Digest - May 2015

This issue of the Credit Crunch Digest focuses on the nearly $6 billion Forex settlement between the big banks and various regulatory agencies; a judgment against RBS and Nomura in a mortgage-backed securities lawsuit brought...more

Anti-Money Laundering Trends: Facts, Findings, and Lessons Learned

Increased anti-money laundering (AML) regulation enforcement by federal and state agencies in recent months should have financial institutions across the country reviewing and strengthening their in-house AML policies and...more

Accounting Cases – An SEC Priority, But The Cases Being Filed are Class Actions

Accounting and financial fraud cases are an SEC priority. The cases, however, are being brought by the private bar as class actions. The number of accounting class actions filed last year increased by 47% compared to the...more

SEC "Claws Back" Bonuses and Stock Sale Profits From CFOs of Public Company Charged With Accounting Fraud

On February 10, 2015, the SEC announced settlements with two former chief financial officers of Saba Software, a Silicon Valley software company, that require the CFOs to repay Saba more than $500,000 in bonuses and profits...more

SEC Charges Audit Committee Chair for Failing to Investigate Red Flags

The SEC recently brought an enforcement action against the Chairman of the Audit Committee of AgFeed Industries, Inc. The Director of the SEC’s Division of Enforcement, called the AgFeed action “a cautionary tale of what...more

Securities Enforcement Forum 2014 — Financial Reporting and Accounting Fraud

Today I’m blogging from Securities Enforcement Forum 2014, Bruce Carton’s excellent one-day conference, this year being held at the Four Seasons hotel in Washington, D.C. The posts will be fairly raw, and certainly not...more

SEC Increases Focus on Accounting and Financial Fraud at Public Companies

“I would describe the time period we are living through as an era of creative and aggressive enforcement by the US Securities and Exchange Commission (SEC),” said Latham & Watkins partner John Sikora. “The SEC has set a...more

Commissioner’s Dissent May Signal Harsher Sanctions Against Accountants

Commissioner Luis A. Aguilar provided the most recent illustration of the SEC’s renewed emphasis on enforcement actions involving accounting and financial statement fraud when, on August 28, 2014, he issued a rare written...more

SEC Gives Itself the Home Court Advantage in an Accounting Fraud / Internal Controls Action Against a Corporate CEO

An otherwise mundane SEC announcement on July 30, 2014 of an enforcement action charging a public company CEO and CFO with accounting fraud and internal controls violations is significant because the SEC is proceeding against...more

Enforcement Case Shows SEC’s Increased Focus on Internal Controls

The SEC recently announced the settlement of charges against DGSE Companies Inc. and its former CFO for accounting fraud resulting primarily from his manipulation of the company’s accounting for inventory. DGSE disclosed in...more

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