Well that makes two of us!
In a recent article on CFO.com, retired Congressman Michael Oxley expresses his displeasure with the Sarbanes-Oxley legislation, and blames it on the Public Company Accounting Oversight Board (PCAOB).
Section 404 of the Sarbanes-Oxley Act of 2002 is the part that causes the most heartburn for executives, stockholders, and the public at-large. This section requires companies and auditors to examine internal controls over financial reporting, and to report on these controls in their annual reports. (Note, however, that companies don’t necessarily have to improve bad internal controls.)
Many say that Section 404 of Sarbox was poorly implemented and is far to expensive to companies. Oxley says the following about why companbies are unhappy with it:
The main thing is the enormous cost that was driven by the outside audit. But, the auditors are under tremendous pressure too. Audits should be risk-based so companies can better assess the risks involved and move forward.
I highly recommend reading the whole story and all of Oxley’s comments.
You read that correctly. No typo. $11,000. Per hour.
The full story is over at Law.com. Here’s how it goes. Florida litigator Willie Gary is requesting $93.1 million in fees and $100 million in sanctions for a trade secrets case against Motorola. An eight-week trial last year ended in a mistrial when jurors announced htey were deadlocked. At issue was the claim that Motorola stole an idea for a stellite vehicle tracking device from SPS Technologies.
Gary claims that the trial ended in a mistrial because two witnesses went against the judge’s order and read the testimony of other witnesses. Motorola said that it was intentional and didn’t affect the outcome of the case.
Attorney Gary says he worked 2,200 hours on the case, and should be paid $11,000 per hour, for a total of $24.5 million. He says he should get this fee because he is one of the top litigators in the country. Co-counsel is also asking for millions in fees. A witness then testified that judge could use the “lodestar calculation,” which would increase the attorneys’ fees to up to three times the actuall billings because of the complexity of the case. This gets us up to $93.1 million.
So actually, that would be $33,000 per hour, wouldn’t it?
In a stunning release of previously undisclosed information, the ]Fraud Discovery Institute (FDI) released today documented evidence that the entire Usana Health Sciences, Inc. (Nasdaq:USNA) Medical Advisory Board secretly owns large independent Usana multi-level marketing distributorships.
“The company presents their advisory board as an independent medical body of experts that have affirmed the quality and effectiveness of Usana products. But the reality is that the entire board have vested financial interests in Usana’s success as multi-level marketing distributorships,” said Barry Minkow. Continue reading
Tim Montgomery, the Olympic sprinter who had his world record erased after the BALCO steroid scandal, pleaded guilty Monday to conspiracy to fraud. The $5 million bank fraud scheme involved depositing stolen, counterfeit, and altered checks into banks over three years.
Montgomery participated in this scheme which involved his former coach, Steven Riddick, and 11 other defendants. His part involved depositing three checks totaling $775,000 and assisting others to deposit $905,000 in bogus checks. He received $20,000 for his role in the fraud conspiracy.
Montgomery faces 37 to 46 months in prison.
NEW YORK, April 11, 2007 — Harwood Feffer LLP today announced that a class action suit has been commenced on behalf of all persons who purchased the common stock of USANA Health Services Inc. (Nasdaq:USNA) (“USANA” or the “Company”) between July 18, 2006 and March 14, 2007, both dates inclusive (the “Class Period”).
The action is pending in the United States District Court for the District of Utah, Central Division, and names as defendants, the Company as well as certain senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Harwood Feffer web site at www.hfesq.com. Continue reading
I’ve heard it before… that since 9/11 all the federal law enforcement officers are working on “Homeland Security” and don’t have time to look at white collar crime. I don’t profess to know the inner workings of all these agencies, but how much “Homeland Security” work can there possibly be, and at some point is there not a diminishing return? Doesn’t domestic white collar crime and fraud still deserve some attention????
Douglas McNabb at Federal Crimes Blog brought up this topic today and had the following to say: Continue reading
Wal-Mart fired security engineer Bruce Gabbard in March, but now executives fear that he took with him secret information about “Project Red.” Gabbard was fired for taping phone calls between a Wal-Mart executive and a New York Times reporter.
Project Red focused on ideas to help the company boost the stock price, and one possibility is spinning off Sam’s Club. Reports on Project Red were encrypted, and the consultants working on it were in a locked area that was regularly swept for bugs. The company even went so far as to have two separate teams of McKinsey & Co. consultants work on the project, so that neither could have full information on the project. Continue reading
Following the indictment of an owner of multiple Jackson-Hewitt franchise locations, Jackson-Hewitt has hired former IRS Commissioner Fred Goldberg to conduct an internal review. Goldbert is a partner at law firm Skadden, Arps, Slate, Meagher & Flom LLP in Washington D.C., and was Commissioner of the IRS from 1989 until 1992.
The internal review will focus on the charges of fraudulent tax preparation by the franchisee, and the company also intends to look at procedures currently in place. The company made all the standard statements about protecting customers, yada, yada.
Gina Wooten, a paralegal in Georgia has been indicted on federal charges of bank fraud and theft of government funds. She is accused of forging signatures on federal bankruptcy checks, as well as stealing offical checks from the bankruptcy trustee.
Wooten worked for attorney Edward Smith when she allegedly committed the fraud, from July 2004 through August 2006. It is alleged that she forged signatures on checks from the federal bankruptcy trustee, and then deposited them into a bank account she shared with her son.
The theft totals more than $110,000, and if convicted, Wooten could face up to 30 years in federal prison just on the bank fraud charges.