An arbitrator ruled that Massachusetts Mutual Life Insurance Co. fired its chief executive officer, Robert J. O’Connell, without cause. MassMutual’s board of directors fired him last year after alleging that he improperly increased the value of a retirement account by tens of millions of dollars.
The arbitration panel ruled that MassMutual didn’t follow the dismissal rules that were in the employment agreement the company had with Mr. O’Connell. The panel further found that Robert O’Connell did not breach the fiduciary duty he owed the company. They ruled that the company owed Mr. O’Connell a lump sum of three times his base salary plus short-term incentive award, plus other benefits. The estimated value of the amount owed to Mr. O’Connell is $40 million to $50 million.
MassMutual is appealing this ruling, saying that it undermines corporate governance policies. The company says that any monetary award that might be paid to Mr. O’Connell will not have a material impact on its financial statements.
Who does your head of internal audit report to? If your company is like many, the chief internal auditor reports to the chief financial officer (CFO). That makes sense to some because they are both a part of the finance function. However, that’s not the best control a company could have.
It’s recommended that the head of internal audit report to the chief executive officer (CEO) and the audit committee.
Why? If the CFO is the boss of the chief internal auditor, how can the auditor be objective about the books and records for which the CFO is responsible? Audit committees, on the other hand, offer the internal auditor the opportunity to report findings objectively. Reporting to the CEO has its advantages as well. Such a structure communicates to the auditors that the audit function is a priority.
Eric Scheibeler was once a highly successful IBO (independent business owner) with Amway. He reached the “Founder’s Emerald” status, which represented the top 1/25th of 1% of the IBO’s. After developing his pyramid for almost ten years, Eric discovered documentation that revealed the fraud behind the company.
Eric thought the fraud was just at the Kingpin level of the organization, to which he had worked so hard to elevate himself. He reported his findings directly to Amway’s President, Dick Devos. Eric thought that DeVos would take action against the distributors who were defrauding so many below them. Continue reading
ViAnna Jordan, the woman behind the effort to recall Milwaukee alderman Michael McGee (Jackson) has put together a website on the issue. Ms. Jordan launched the recall drive this week, and has already been getting positive press.
From Ms. Jordan’s website, 10 reasons why Michael McGee (Jackson) should be recalled:
- Has become an embarrassment to his community
- Perjured himself in court about an illicit affair with mother of his child
- Arrested on charges of resisting arrest, disorderly conduct and threatening to kill a woman
- Aide arrested for possession of guns, drugs, and open alcohol
- Used slurs and epithets against LGBT community; unbecoming of a role model
- Has shamefully earned the public reputation of a scofflaw
- Lacks the rapport and leadership skills to be an effective leader
- Refers constituents to disreputable cronies in a conspiratorial hoax/scam
- Fraudulent use of alias names to avoid responsibility for accident damages
- Used constituent organizations to rally to the defense of a shameful act
Six current and former Milwaukee police officers have been charged with federal crimes related to the Frank Jude Jr. beating incident that occured almost two years ago. A total of 8 officers have now been charged by the U.S. Attorney, and 3 have agreed to plead guilty.
Thursday’s indictments included Jon Bartlett, Daniel Masarik and Andrew Spengler, the three officers who were unsuccessfulliy tried in Milwaukee County Court. Additionally, Ryan Packard and Ryan Lemke have been charged. The felonies charged by the U.S. Attorney include conspiracy to violate the civili rights of Frank Jude and his friend, Lovell Harris. Joseph Stromei was charged with obstruction of justice for lying to investigators, and he has agreed to plead guilty. Continue reading
The Milwaukee Journal Sentinel reports that a drive to recall alderman Michael McGee/Jackson has begun. The group organizing the recall is named “Friends to Recall Ald. Michael McGee Jr./Jackson”, and is led by ViAnna Jordan. The papers were file on October 3, and the group has 60 days from that date to gather 1,620 signatures to force the recall. ViAnna Jordan is listed as the candidate to oppose McGee/Jackson in the recall. Among the reasons listed for the recall:
- Fraudulent use of alias names to avoid responsibility for accident damages
- Incidents such as arrests for disorderly conduct
- Perjury allegations in a trial involving the mother of his child
- Slurs against gays
- He “has become an embarrassment to our community.”
Note: The Journal/Sentinel says that “he has been known as McGee his whole life”. That is not correct. He’s got a drivers license and a social security number in the name of Jackson. Therefore, he has also been known as Jackson.
Today Milwaukee Public Schools Superintendent William Andrekopoulos ordered School of Humanities closed. This is a high school in the North Division complex with 163 students enrolled.
The school closure has been prompted by recent violent incidents, including two fights requiring police intervention and an attack on a safety aide. Continue reading
Andrew Bandy, a former property manager for Mallory Properties, has been indicted on federal charges related to embezzlement. Bandy is accused of embezzling over $240,000 from the real estate investment company.
According to the indictment, which was handed down last week by a federal grand jury, Bandy submitted false invoices for construction work never performed, and then deposited Mallory Properties checks related to those invoices deposited into a bank account he controlled. (i.e. He had a guy set up an account and give him control of the account.) The scheme was carried out from April 2003 through August 2005.
[tag]Ken Lay[/tag], the former chairman of Enron Corp., has had his criminal conviction on [tag]fraud [/tag] and [tag]conspiracy[/tag] charges vacated. He was convicted on May 25, 2006, and died from a massive coronary on July 5, 2006.
The law in the Fifth Circuit states that if a defendant dies before having an opportunity to [tag]appeal[/tag] a conviction, that the [tag]conviction[/tag] must be taken off his record. The federal government argued that Ken Lay’s estate shouldn’t be able to keep the proceeds of fraud, which should be forfeited and distributed to the victims of his crimes. The judge rejected the argument, saying that those who were defrauded could pursue the matter in civil court.
The Justice Department has said that they will continue to pursue [tag]restitution[/tag] on behalf of the [tag]Enron[/tag] fraud victims.
Bankrate.com ran a great article about why consumers don’t save their money. It seems everyone’s got a reason, er, excuse … From their article:
- I don’t make enough money – Many people just spend their money until it’s gone. Tracking what you spend may help you control your spending, and therefore help you to save.
- I’ll get around to it later – People are always putting off saving. However, saving little by little can add up fast.
- I deserve a little luxury in my life – We’re in a society that promotes instant gratification. Saving is important too, and it’s okay to save for the treats you want too.
- Someone else will take care of it – Many count on things like inheritances to start their savings. It’s wiser to be in control of your financial future early on.
- I’m saving through my 401(k) – Retirement money is important, but you also need emergency funds for today’s problems.
- This item or service will pay for itself – Rationalizing purchases is easy, but it may be wiser to save and create a financial future.