• JPMorgan, Citigroup Helped Cause Lehman Collapse, Report Says [Bloomberg]
There’s so much blame to go around: Dick Fuld! Every Lehman CFO that ever worked there! JP Morgan, Citi, Ernst & Young (who we’ll get to shortly), you’re all at fault too! But mostly Dick Fuld. He was putting lots of pressure on Lehman’s balance sheet magicians to reduce the bank’s debt. The report states that Fuld was “at least grossly negligent” and if it gets worse than that, you’ll certainly hear about it.
According to the Bankruptcy Examiner’s report, there was plenty of parties that didn’t help matters. JP Morgan and Citi were demanding more collateral from Lehman as the firm tried to stave off death while E&Y sat back as LEH got all hocus-pocus with their accounting. So pick a company or person you don’t like and point the finger. It sounds like an argument can be made.
All this amounts to largest bankruptcy in history and boy will it sell a helluva lot of books, movie tickets, and HBO subscriptions. Silver lining!
• Record Numbers of People Paying No Income Tax; Over 50 Million “Nonpayers” Include Families Making over $50,000 [Tax Foundation via TaxProf Blog]
For all the bellyaching Americans do about taxes, a large portion of them have managed to turn “Tax Day into a payday.” What the hell does that mean? It means that a growing number of people are considered to be “nonpayers” or people that get back every dollar withheld on their paycheck.
Sounds great, right? It’s my money, F the government, etc, etc. Well, the Tax Foundation is a little concerned because as the federal budget continues to grow, the income tax system becomes a less effective method of financing expenditures:
• A Growing Contagion: Accounting Fatigue Syndrome [CFO Blog]
Anyone getting worn out from all the guidance that is coming from the alphabet soup of regulators? You’re not alone and there appears to be an epidemic, something that CFO Blog has deemed “Accounting Fatigue Syndrome.” The long/short of it is that things are only going to get more complex as FASB and IASB continue to converge their rules and guidance continues to come out of both rule making bodies.
“Like many finance executives, Terry Lillis, CFO of Principal Financial Group, is tired. The constant stream of guidance from regulators and accounting standard-setters — plus the expected inflow of more to come over the next few years — has created “huge accounting fatigue” among his finance staff”
• Half of US execs want to use IFRS early-survey [Reuters]
KPMG surveyed some shot-callers and lo and behold, half of them are ready to get down with International Financial Reporting Standards before the SEC’s target date of 2015. That’s if the SEC is even down with the whole idea.
KPMG’s surveyed also discovered that executives would like the SEC to be a little more transparent with their plans re: IFRS. You know, other than more meetings.
• Public employees union criticizes data loss deal [AP via CNBC]
Remember how PricewaterhouseCoopers lost the records of 77,000 Alaska public employees and retirees? PwC, trying to be a standup corporate citizen, took responsibility for the slip-up and promised those affected all kinds of stuff including identity theft protection, credit monitoring, and security freezes. Hell, they said they would even reimburse any losses that occurred due to identity theft.
Shockingly, that wasn’t good enough for some people. The Alaska State Employees Association is pretty bent out of shape about the deal the state took and wants them to go back and get more. MORE. MORE!
• Porn Nightmare Never Ends for SEC Official [FINS]
Whatever your porn preferences, you’re probably not sharing them with complete strangers. If you are, the cloud of awkward around you has got to be so thick that you may as well have leprosy. However, if you have the unfortunate luck of getting caught viewing this art form at work, then you might be forced to discuss your preferences, how often you’re engaging in the activity, among other things:
• Rangel Loses Support in House [WSJ] You can ignore what’s written below, except the part about rent-controlled apartments.
Charlie Rangel will not be quitting (temporarily sayeth Charlie Rangel) as the Chairman of the House Ways & Means Committee. If you (read: Republicans) want him out, you’ll have to vote him out. Bad news for Chuck is that the Republicans in the House and several of his fellow Democrats are poised to do just that, “As many as 30 House Democrats could join 178 House Republicans in voting to oust Mr. Rangel as head of the Ways and Means Committee…a substantially higher number than in previous votes on his removal.”
Never mess with people when it comes to rent-controlled apartments. They’ll turn on you like Judas.
• Suspicious substance at IRS called non-hazardous [KSL5]
After everything that has happened lately that is IRS-related, somehow that white powdery substance showing up at an IRS building and three employees having seizures is one giant coinky-dink.
• Companies are making fewer accounting mistakes [USA Today]
“In another potential boost to investor confidence, the era of sloppy accounting appears to be ending,” declares USA Today. Okay but perfection is unattainable people, so until machines take over for you, keep at it. In the meantime, the results presented by Audit Analytics certainly indicate that things are going in the right direction.
We don’t want to be the party pooper here but if accounting is less sloppy, i.e. more sophisticated, doesn’t that mean that the methods for massaging the accounting are also more sophisticated? Just chew on that while you check the rationale for behind the findings. Read more »
• Panel Admonishes Rangel for Taking Trips as Gifts [NYT]
Charlie Rangel had a Congressional ethics committee rule that he “violated gift rules” when he accepted corporate-sponsored trips to the Caribbean. While that is certainly bad news for Rangs, the committee is far from finished with its investigation as they continue their inquiries about Chuck’s “fund-raising, his failure to pay federal taxes on rental income from a Dominican villa, and his use of four rent-stabilized apartments provided by a Manhattan real estate developer.”
