29 Jun

Book Publishing: Deciding What to Write

Since I got my very first book deal with John Wiley & Sons a few months ago, I’ve had professionals ask me how I did it. It’s not surprising that several of my colleagues are interested in writing books themselves, and that some of them have already written substantial portions of them in anticipation of landing their own publishing deals.

When I landed my contract, I had no idea how my experience compared with the normal experience of seeking out a publisher. But I promised my colleauges I’d write about my experience. In conjunction with that, I did some research to see how others typically get their publishing contracts. So this is the first installment in a series that discusses the process I went through to land my deal and get my book on bookshelves in Spring 2008. Read More

28 Jun

Latest from the Usana Insider

Insider Post Myron Wentz stock street name

dr wentz took 45,425 shares from account ending in 088 and placed it at cannacord adams and put it in street name. no crime but check to see if it was sold without the form. it is at least pledged and is in a dta depository trust company. now that account has 80,425. the account ending in 130 with 4,509,470 shares is broken down in four five hundred thousand certificates and one for two million five hinder four thousand seven hundred thirty five is the one to watch. there is more to this. the other certificate in that lot is for 4,735 which is the hush money certificate. i have a new ally. the quarter is bad and will be masked in new associate numbers from incentives contests. our thought is by serving the minkow suit and some day trading games the attention will move off of poor performance to things will improve because of our now served law suit. i saw a lawyer last week. she said there is hope for me coming forward. i am not the one who betrayed this company. Read More

28 Jun

Crazy Eddie on CNBC

Last night the Crazy Eddie story was shown on Business Nation, in a short but interesting segment. The show featured a showdown between Eddie Antar and Sam Antar, cousins who perpetrated a massive corporate fraud for years.

When asked if he has forgiven himself for the crimes, Sam says he will never forgive himself. He hurt too many people.

Eddie and Sam went at each other, talking over each other and telling one another to be quiet and not interrupt. I get the distinct impression that Eddie bossed Sam around a lot when they worked together in Crazy Eddie. But Sam is a different man now, and won’t be told what to do by Eddie or anyone else.

The story also talked about Sam’s life now. Sam is an expert in real estate, but also has skills in the area of forensic accounting. Sam is taking on companies like Overstock.com and challenging their numbers and the integrity of the executives.

On the other hand, Eddie looks rather defeated. He spent 7 years in prison after a couple of years on the run. He looks frail. He looks like he has no fight left in him, no motivation, and no desire for anything. I could be completely wrong, but he looks like a shell of a man with no heart and no purpose.

Here’s the promotional video for the story. See if you can’t catch a rerun of the program.

27 Jun

More on Sarbanes-Oxley and boards of directors

I got a mention this week on a blog called The Race to the Bottom:

A consistently anti-Sarbanes-Oxley site is The FRAUDFiles Blog. Last week, for example, the blog noted a study discussing the changes in boards as a result of SOX and the increase in D&O insurance costs. As the Blog concluded: “Clearly there is a one significant cost of SOX noted here – an increase in the D&O premiums.”.

I tried to like Sarbanes-Oxley. I promise I did. Read More

26 Jun

Read Today’s WSJ Story About Usana Carefully…

This afternoon the Wall Street Journal ran a short piece entitled: “Probe Into Usana Officials Ends With Settlement.” Lots of people apparently got excited at this headline, and interpreted it as complete vindication for Usana Health Sciences.

Alas, nothing could be further from the truth. The SEC is still looking into the company.

This article deals with the fact that Usana’s CEO Gilbert Fuller and the board of directors “audit committee financial expert” Jerry McClaim both called themselves CPAs when they were not. Read More

26 Jun

The enormous cost of complying with Sarbanes-Oxley Section 404

The Securities and Exchange Commission is being asked to take another look at the cost of complying with Section 404 of the Sarbanes-Oxley Act. This section deals with internal controls in public companies, and a major criticism of SOX is the enormous cost of compliance.Proposed Accounting Standard No. 5 would decrease the costs of compliance, as compared to Accounting Standard No. 2, the current standard. CFO.com says:

The costs will decrease because companies “will be able to focus on the areas that present the greatest risk of material misstatements in the financials” and their managers will be able to exert judgment concerning which part of their compliance efforts to stress.

Some critics complain that the costs are purported to be lower, but no proof has been offered.

How about this trip down memory lane? In 2003, the SEC estimated the total annual cost of implementing Section 404 at $1.24 billion. That was $91,000 per company. Critics of these numbers said the actual cost was probably 100 times higher.

26 Jun

A local entrepreneur success story

The Business Journal had a great feature on Kelly and Jeff Fitzsimmons. Kelly is a well-known Milwaukee entrepreneur, and this venture seems a bit of a change from computer security. Their idea is an “American Idol” type of website for joke-telling. The site is Comic Wonder, and their money-making proposition revolves around selling advertising.

Users of Comic Wonder record audio of jokes, and other users vote for the best jokes and best joke-tellers. The site will feature a variety of weekly and monthly contests.

Kelly was the founder of Sun Tzu Security, which was eventually sold to Neohapsis in Chicago. She was the CEO of Neohapsis for a few years, and sold her equity in the company in October. Jeff’s background involves writing books and writing for television shows. His book, “The Art of the Bonsai Potato” has sold over 200,000 copies.

Comic Wonder is Jeff’s idea, dating back to 2000. The site has been developed under Jeff and Kelly’s company, Area 444, and more online products are in the works.

Kelly and Jeff invested $250,000 of their own money to get this site off the ground, and have been working it full-time since December. The site had its official roll-out late last week.

25 Jun

Legal Inaction Against Mannatech?

The Texas Attorney General doesn’t want to talk about why his office hasn’t taken legal action against multi-level marketing company Mannatech. His office was informed on October 5 by the Department of State Health Services that Mannatech is a threat to public health and safety.

Mannatech was recently featured on ABC’s news program 20/20. The program highlighted the bogus health claims made by representatives pushing Mannatech’s “Ambrotose” product, which is nothing more than a sugar pill. Read More

25 Jun

Fascinating look into the mind of a white collar criminal

Sam Antar says the following about his crimes: “What I did was pure evil. I am going to probably fry in hell for many years before I get upstairs. We were nothing but cold hearted and soulless criminals. We were two bit thugs.”

Sam and his cousin Crazy Eddie Antar were partners in crime for many years with the Crazy Eddie company. Eddie was once the darling of Wall Street. Then the false financial statements got in the way. The Antar family cashed out almost $100 million in stock…

Maybe the craziest part about the fraud was that at one point, Eddie was seen as a hero to consumers. He was seen as someone will to buck the system and ignore fair trade laws to give consumers lower prices. The truth was that those low, low prices were merely part of Eddie’s bait and switch. Get the customer in with an advertised price, and switch them to a different products with a higher margin (they called them house brands) and sell an inflated warranty. Then if the customer paid cash for an item, the sale was not reported and the sales tax was kept by the Antars. Read More