Earlier this year, I mentioned a SEC enforcement against MDC Partners, a marketing company that, among other non-GAAPy things, failed to disclose perks that it paid on behalf of its former Chairman and CEO Miles Nadal. The SEC has now gotten around to settling with Nadal and, as a reminder, these perks were a tad lavish, even by CEO standards. They included:
private aircraft usage, cosmetic surgery, yacht-and-sports-car-related expenses, jewelry, cash for tips and gratuities, medical expenses for Nadal, family members and others, charitable donations in Nadal’s name, pet care, vacation and personal travel expenses, club memberships, and certain expenses for which supporting documentation or information was incomplete.
“Perks paid to corporate executives should be properly disclosed so that investors can make informed decisions,” the Director of the SEC’s Philadelphia Regional Office said. I’ve never had the pleasure of preparing a CEO’s expense report but it’s a little strange to think that somewhere along the line, someone decided that disclosing cosmetic surgery, pet care, et al. as compensation would’ve been too extravagant and caused shareholders to take their money elsewhere. Now the company just looks stupid and wasteful. Nicely done.
Elsewhere in SEC enforcement: A former Foley & Lardner lawyer allegedly accessed confidential information on 11 clients, traded on that information, and even tipped his neighbor about it.
Hiring Watch: RSM
Crain’s Detroit reports that RSM got $200k from “a performance-based grant from the Michigan Economic Development Corp.” The firm will use the money as part of a larger $2.2 million investment to open a Detroit office that will also bring 50 new jobs.
Accountants behaving badly
Stories of accountants trying to pull a fast one on other accountants are rare, which makes them all them all the more interesting. Here’s one between CPAs Dennis Murray and Patrick Carlin of…Carlin & Murray.
Dennis Murray filed a complaint on April 4 in the San Francisco County Superior Court against Patrick Carlin and Does 1-10 alleging breach of contract and other counts.
According to the complaint, the plaintiff and defendant are 50 percent shareholders of Carlin & Murray. The suit states that in February, Carlin announced that they were no longer business partners and deprived the plaintiff of access to the QuickBook system. The plaintiff alleges Carlin has altered company records to conceal misuse of company funds.
If you are a partner in an accounting firm, and you’re confident that you can misuse company funds without your partner(s) knowing, should you really be in business with them? I suppose if you entered the partnership with nefarious intentions, then the answer is, “Yes,” and your partner has a problem. Otherwise, if you’re just sitting around one day and suddenly realize, “Whoa. I could take all the money, blow out of town and Bob would never know,” then you have a problem.
Brought to you by Accountingfly
Previously, on Going Concern…
In other news:
- PCAOB Trying Different Tack in Selecting Audits
- SASB reconfigures board structure
- How to Manage a Narcissist
- “You are paddleboarding next to approximately 15 great white sharks.”
- Human-sized rat trap used to stop campaign sign thefts
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