Another Dishonest Public Company Executive Uncovered by Barry Minkow


According to Barry Minkow, co-founder of the Fraud Discovery Institute, Terrell Herring, President and COO of inVentiv Health Inc. (NASDAQ: VTIV) “claims to have an MBA degree from Pacific Western University, a well known ‘diploma mill’ that ceased to exist by that name in 2007.” This “diploma” was cited in numerous SEC filngs by the company, including this May 5, 2009 proxy statement.

Not only does Herring have a diploma not even worth the paper it’s printed on, he may very well be violating a New Jersey law. Statute N.J.S.A 18A:3-15.2 explicitly states that any use of a diploma mill degree in the context of a business setting is illegal.”

inVentiv also seems to have violated SEC Regulation G in its disclosures, according to Sam Antar. Sam is a reformed criminal who now does forensic accounting work. On his blog, he states:

In its Q2 2009 press release, inVentiv violated SEC Regulation G by defining EBITDA as “operating income before depreciation and amortization.” SEC guidance specifically requires EBITDA to be measured as earnings (meaning net income and not operating income), before interest, taxes, depreciation, and amortization. However, inVentiv improperly used operating income, rather than net income as a starting point to compute EBITDA, and failed to exclude interest and taxes from its non-compliant EBITDA financial measure.

Are either of these items a big deal? It depends on your perspective. Some may consider phony credentials touted by an upper-level executive of a public company to be relatively minor, especially if the executive is otherwise competent. However, I think this issue points to the credibility of management overall, and where there’s smoke, there may be fire. If they’re being dishonest about their credentials, what else might they be less-than-honest about?

As for the violation of Regulation G… Again some might see this as a fairly minor matter. Instances like this seem like a clear attempt to make a company’s numbers look better than they are. Why not just use the financial measure as it is meant to be used? Why calculate that item in a way that inflates the result? It’s a case of manipulation of numbers and leads me to question what other things are being reported in a less-than-honest fashion.

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