April 2014 archive

IRS Audits Heavily Target Corporations Over Partnerships

The Government Accountability Office recently released a study on the subject of “Large Partnerships: Characteristics of Population and IRS Audits”.  This study tracked IRS activity related to such “large partnerships”, which the IRS defined as those that reported having 100 or more direct partners and $100 million or more in assets. The number of large partnerships …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/irs-audits-heavily-target-corporations-over-partnerships/

Cautionary Language is Key in Securities Litigation Dismissal

Investor claims were recently dismissed by a California district court against Mellanox Technologies Ltd. (“Mellanox”) for allegedly providing false or misleading statements related to the company’s prominence in the interconnect market and its prospects for future growth and revenue generation.  The Court found that Mellanox had adequately cautioned investors regarding the risks associated with the …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/cautionary-language-is-key-in-securities-litigation-dismissal/

SEC Director Speaks to Root Causes of Investor Harm

Andrew Barton, Director of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) recently gave a speech entitled “People Handling Other People’s Money”, where he drew on his experience to make assessments of the sources of investor harm.  He described how, despite people “trying to do the right thing by their clients, colleagues, owners and…even …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/sec-director-speaks-to-root-causes-of-investor-harm/

Fraud on the Rise

Economic crime is increasingly plaguing U.S. firms according to a recent survey by PWC.  Key findings include: “45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%. More than half of U.S. organizations that experienced fraud in the last two years reported an …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/fraud-on-the-rise/

EU Requires 10-Year Auditor Rotation Amid Other Efforts to Improve Audit Quality

The European Parliament has adopted new rules regarding the statutory audit of public-interest entities in an effort to “considerably improve audit quality across the European Union and … ensure that auditors are key contributors to economic and financial stability….by strengthening of the independence of statutory auditors, making the audit report more informative, and improving audit supervision …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/eu-requires-10-year-auditor-rotation-and-other-efforts-to-improve-audit-quality/

College Football Players Get Employee Status

The National Labor Relations Board (“NLRB”) regional director Peter Sung Ohr recently ruled that a group of Northwestern University football players on scholarship are properly classified as employees of the university and thereby have rights to unionize and engage in collective bargaining. The NLRB relied upon the common law definition of an employee and was …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/9133/

Non-competitor can get false advertising damages

In Lexmark Int’l, Inc. v. Static Control Components, Inc., (U.S., No. 12-873, 3/25/14), the U.S. Supreme Court recently determined that a company can assert a false advertising claim against a non-competitor under Section 43(a) of the Lanham Act if it can “show economic or reputational injury flowing directly from the deception wrought by the defendant’s …

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Disgorgement remedy potentially broadened by Second Circuit

In a sharply-divided 2-1 vote, the Second Circuit Court of Appeals found that a civil disgorgement amount can exceed the profit that the defendant received. Although the case facts and Opinion directly involved insider trading in an action brought by the Securities and Exchange Commission, the rationale could presumably be applied in other wrongful conduct. …

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FHA to Eliminate Phantom Interest Charges for Future Borrowers

Historically, loans insured by the Federal Housing Administration (“FHA”) that were paid before maturity were subject to interest charges for the full final month in which they were repaid.  Not surprisingly, home sellers with closing dates early in the month have long complained about this practice, which increases their transaction costs. In arguing against the …

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Permanent link to this article: https://betweenthenumbers.net/2014/04/fha-to-eliminate-phantom-interest-charges-for-future-borrowers/