Accounting News Roundup: Six Charged in Olympus Scandal; Ex-Nortel Accountant Was Just Following Orders; SEC Wants a Raise | 03.07.12

Romney Appears the Ohio Winner; Santorum Strong [NYT]
Mitt Romney appeared to pull off a narrow victory in Ohio on Super Tuesday but lost several other states to Rick Santorum, a split verdict that overshadowed Mr. Romney’s claim of collecting the most delegates and all but ensured another round of intense infighting on the road to the Republican presidential nomination.

Stanford Guilty in Ponzi Scheme [WSJ]
A federal jury found R. Allen Stanford guilty of masterminding a $7.1 billion Ponzi scheme, completing an extraordinary fall from grace for a wealthy financier once feted as a successful entrepreneur. After a criminal case that dragged on for nearly three years, a jury of eight men and four women on Tuesday convicted Mr. Stanford on 13 of the 14 charges brought by prosecutors, including fraud, obstructing investigators and conspiracy to commit money laundering. The verdict is a victory for the U.S. government, which targeted the chairman of Stanford Financial Group as part of a crackdown on white-collar crime following the financial crisis. He faces a maximum of 230 years in prison. Mr. Stanford's attorneys, while still under a court order to not discuss the case, told reporters they would appeal but didn't specify on what grounds.

Young Adults See Their Pay Decline [WSJ]
In data compiled for a coming report, the Economic Policy Institute, a center-left think tank in Washington, found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80. "New college graduates have been losing ground for 10 years," said Lawrence Mishel, president of the institute, which derived the figures from regular government wage surveys. The drop in average wages for young adults is in contrast to U.S. government figures showing that average inflation-adjusted hourly wages for production and nonsupervisory workers of all ages and education levels are up 3% from a decade ago.

Japan prosecutors charge key figures in Olympus scandal [Reuters]
Tokyo prosecutors on Wednesday charged Olympus Corp and six key figures in the $1.7 billion accounting fraud at the camera and endoscope maker, tightening their case in the investigation of one of Japan's biggest corporate scandals. Prosecutors charged ex-chairman Tsuyoshi Kikukawa, former executive vice-president Hisashi Mori and former auditor Hideo Yamada with inflating the company's net worth in financial statements for the fiscal years ended March 2007 and 2008, in violation of the Financial Instruments and Exchange Law.

Ex-Nortel accountant uncomfortable with entry process [GM]
A senior Nortel Networks Corp. accounting employee quit the company after completing the books for the controversial fourth quarter of 2002, saying she was uncomfortable with the process and unhappy with the long hours. But chartered accountant Helen Verity, former director of consolidations at Nortel, said she did not feel it was her role to question senior executives about the appropriateness of last-minute accounting changes happening at the company. Ms. Verity told the Toronto fraud trial of three former Nortel executives her team was responsible for tracking and inputting late accounting entries that included creating new accounting reserves at the company, which are now the subject of the fraud allegations. But she said none of the changes were made on her initiative, and she was simply doing as asked by her managers.
 
Deloitte Launches U.S. Center for Regulatory Strategies [Deloitte]
FYI.
 
KPMG Int'l Chair Michael Andrew Takes on Global Risks [AT]
I already took one for the team this week. This is on you.
 
Waffle House Waitress Liable for Tax on Gift of $10 Million Lottery Ticket Received From Customer [TaxProf]
Alabama, since you're wondering.
 
Under Heat from Congress, SEC Still Seeks 18.5% Raise [CFO]
During a subcommittee hearing today where Securities and Exchange Commission chair Mary Schapiro was seeking an 18.5% budget increase, the chair of a congressional oversight committee contended that she would be “reticent to throw money at the SEC” until the regulator can prove it’s made significant improvements. Rep. Jo Ann Emerson, a Missouri Republican who chairs the Committee on Appropriations subcommittee, expressed wariness about granting “another substantial funding increase” to the SEC and questioned Schapiro about whether the many pending rules on the agency’s docket will withstand scrutiny.

 

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