Month: June 2007

$54 million lawsuit over a pair of pants is decided

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The case of the pants lost by the drycleaners and the ensuing $54 million lawsuit has been decided. District of Columbia Superior Court Judge Judith Bartnoff ruled that Custom Cleaners did not violate the Consumer Protection Act with its “Satisfaction Guaranteed” sign. Administrative law judge Roy L. Pearson accused the business of fraud under the … Read more $54 million lawsuit over a pair of pants is decided

Survey Considers Downside of Time-Based Billing

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A recent survey completed by William G. Ross, professor at the Cumberland School of Law at Samford University, is ruffling some feathers. Ross has a special interest in billing ethics, and has done two previous surveys of this sort.

In the current survey, 5,000 randomly sampled attorneys were asked about their billing practices. Only 251 responses were received, and that number of responses seems a bit thin to provide reliable results. However, I think that the results are interesting nonetheless and bear discussing.

The focus of the survey was time-based billing, and whether or not such billing leads to inefficiencies, fraudulent billing, or other negative consequences.

Survey Results
Ross notes that this survey’s results were very similar to the results of previous surveys. He opines that “a distressingly high percentage of attorneys believe that time-based billing results in bill padding and provides incentives for attorneys to perform unnecessary work.”

Read moreSurvey Considers Downside of Time-Based Billing

Federal Law Enforcement Training Center (FLETC)

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Did you know that I’m a graduate of the Criminal Investigator Training Program (CIT) at the Federal Law Enforcement Training Center (FLETC) in Glynco, Georgia? This site gets lots of hits from people searching for information on FLETC, so I thought it was a good time to highlight this topic! A summary of the program … Read more Federal Law Enforcement Training Center (FLETC)

When is a public company required to file a Form 8-K?

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Several people have questioned whether Usana Health Sciences must file a Form 8-K with the SEC to notify them of the recent distributor class action suit. It seems to be the common belief that the lawsuit is a “material event” requiring the filing of an 8-K.

So here it is, straight from the Securities and Exchange Commission. Yes, the suit may be considered a material event, but the 8-K only needs to be filed if the material even falls under one of the below categories:

Read moreWhen is a public company required to file a Form 8-K?

Interesting question posed to Patrick Byrne of Overstock.com

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Sam Antar has uncovered some interesting information. I would love for Patrick Byrne, Overstock CEO to respond to Sam’s questions about this (and now the questions are mine too!).

Patrick is involved with an organization called National Coalition Against Naked Shorting (NCANS). Naked short selling, as defined by Wikipedia:

Short selling is the practice of borrowing stock, then selling it in hopes that the price will go down and it can be bought back at a lower price with shares to replace the borrowed ones. “Naked shorting” refers to short selling a stock for sale without first borrowing the shares or making an “affirmative determination” that the shares can be borrowed. The U.S Securities and Exchange Commission has issued a regulation, known as Reg SHO, seeking to curb abusive naked shorting.

On the NCANS message board, Patrick Byrne (aka Hannibal) posted the following :

Read moreInteresting question posed to Patrick Byrne of Overstock.com

The effect of Sarbanes-Oxley on boards of directors

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Earlier this year, a paper was released called “The Effects and Unintended Consequences of the Sarbanes-Oxley Act, and its Era, on the Supply and Demand for Directors.” Clearly there is a one significant cost of SOX noted here – an increase in the D&O premiums. The abstract of the paper (emphasis added): We provide the … Read more The effect of Sarbanes-Oxley on boards of directors

Canaccord Adams negative report on Usana

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USANA Health Sciences | Scott Van Winkle, CFA, 1.617.371.3759 USNA : NASDAQ : US$43.16 | US$814.9M | Buy , Target US$55.00 Negative news continues Event A former distributor in California has filed a lawsuit accusing USANA of fraud and deception. While the plaintiff lost just $500, the suit seeks class action status and an injunction … Read more Canaccord Adams negative report on Usana

PCAOB Slaps Deloitte on the Hand, Sort Of

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According to CFO.com, the most recent evaluation of Deloitte & Touche by the Public Company Accounting Oversight Board has them coming up a bit short. The PCAOB report said that four times in 2005, Deoitte failed to do enough work related to its audit clients’ fair value calculations. The auditors did not do enough testing … Read more PCAOB Slaps Deloitte on the Hand, Sort Of