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The Securities and Exchange Commission (“SEC”) filed a claim stating that DGSE Companies Inc. (“DGSE”) and its former chief financial officer (“CFO”) engaged in accounting fraud by manipulating inventory accounts. DGSE transacts in jewelry, diamonds, fine watches, rare coins, precious metals and other collectibles and valuables. DGSE’s CFO allegedly made numerous false accounting entries that …
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Permanent link to this article: https://betweenthenumbers.net/2014/06/better-accounting-controls-would-likely-have-prevented-inventory-fraud-at-jewelry-company/
An event study provides the basis for identifying movements that can attributed to specific events and illustrate how the public markets react (or fails to react) to a specific event. Identifying and measuring such activity can substantiate (or counter) a claim for economic damages. In Bricklayers & Trowel Trades Int’l Pension Fund v. Credit Suisse …
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Permanent link to this article: https://betweenthenumbers.net/2014/06/first-circuit-disallows-event-study-which-fails-to-connect-to-key-events/
The newly converged standard for revenue recognition has arrived. Both ASU 2014-09 (issued by FASB) and IFRS 15 (issued by IASB) are entitled “Revenue from Contracts with Customers”. They represents a principles-based framework that is effective for revenue-generating public entities with reporting periods after December 15, 2016. Private entities will have an additional year to …
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Permanent link to this article: https://betweenthenumbers.net/2014/06/new-standard-for-revenue-recognition/
In the matter of Division Entertainments, LLC and Wicks Walker v. Spring Breakers LLC and Muse Productions, Inc. et al., Mr. Walker asserts that he was denied a return of his investment, along with an additional profit, because of Defendants’ breach of contract via improper business practices and faulty accounting. Mr. Walker, a technology entrepreneur …
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Permanent link to this article: https://betweenthenumbers.net/2014/05/spring-break-turns-sour-for-investor/
A bipartisan bill by U.S. Senators Chris Coons and Orrin Hatch called the Defend Trade Secrets Act was recently introduced to build on the Economic Espionage Act of 1996 and create a federal private right-of-action for theft of corporate trade secrets, providing the same federal protections available for patents, trademarks, and copyrights. The bill’s sponsors estimate …
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Permanent link to this article: https://betweenthenumbers.net/2014/05/new-federal-option-to-fight-trade-secret-theft/
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/
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/
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/
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/
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/
