In part one of this two-part series, I reviewed what earnings management is (and isn’t) and went through a few examples of earnings-management-related actions brought by the Securities and Exchange Commission (SEC). In this...more
Public companies are under tremendous pressure to meet or beat stock analyst earnings estimates. This pressure caused Warren Buffet to observe: “Managers that always promise to ‘make the numbers’ will at some point be tempted...more
In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important SEC enforcement developments from the past month, with links to primary resources....more
In this Order, the SEC brought settled charges against Rollins, Inc., a termite and pest control company—think “Orkin”—and its former CFO for earnings management. In essence, the SEC alleged that the company adjusted the...more
As the SECond Opinions Blog continues our review of FY 2021 U.S. Securities and Exchange Commission's (SEC) enforcement activity, we take a deeper dive into the agency's use of technology to generate enforcement leads. The...more
In this new paper by a group of academics from the University of Richmond (and elsewhere), the authors explore whether companies might be timing when they record changes in their accounting estimates (CAEs) to meet earnings...more
Last week, on December 16, 2020, Chinese-based coffee chain Luckin Coffee Inc. (“Luckin”) agreed to a $180 million settlement with the United States Securities and Exchange Commission (“SEC”). Luckin’s American Depositary...more