Somehow we missed Barry Salzberg’s latest masterpiece on leadership from last week and since you’ve all checked out, we’re sure you won’t mind.
When asked “Who was the best business leader of 2009?”, Dr. Phil — using every fiber of his being not to nominate himself — chose “Do-right employees”. It’s not about the BSDs of the world. It’s those of you that manage to not sit bare-assed on the copy machine and resist the urge to watch porn on your work computer. You’re the leaders setting the example:
Rather than single out a best business leader, I’d recognize the many unsung ethical heroes in our organizations. I’m talking about people who, even when no one is watching, consistently do the right thing. And they’ve been doing it at a time when confidence in business urgently needs to be restored.
Not only are you restoring confidence (?) in business, you’re going to lead us the charge into this recovery:
As we prepare our organizations for the upturn, we also need to prepare our people for the uptick in wrong-doing that can accompany better times.
First of all, what is this “upturn” you speak of? Also, Costanza-stache: “uptick in wrong-doing accompany better times”? Just what the hell is all this accounting fraud talk? Or how about executives’ bad attitudes about its employees? Or everything else?
Apparently you need to get even more vigilant people! This ship is turning around and wrong-doing is really going to take off. We need you more than ever.
Do-right employees [Washington Post]
Gang, we’re a little upset about something today. Last week we told you about something that had the potential to turn awards for accountants on its green eyeshade wearing head.
Yes, we’re talking about the doomed Deloitte ballot sent out by Holly Leam-Taylor. Today would have been the day that she had sent out the results of her sluttiest future partner, hottest old man, et al. awards, if it had not been for her inexperience with sending out superficial emails about her colleagues.
If Holly had only consulted with someone, anyone with experience on such matters, they could have explained that Deloitte is not a place for such “fun” things and that using her work email was not the best way to solicit nominations.
Alas, our request for someone to pick up where Holly left off has been roundly ignored and here we are on a Friday with nothing to share about Deloitte’s hottest men in London.
So far we’ve been unable to track down Holly since her Deloitte email has been obliterated. Holly, if you’re out there, get in touch. We’ll get your side of the story out there. We know you’re fed up but this will be fun. We promise. Anyone else that can put us in touch with Holly, please help. We’re still getting over our disappointment.
A friend of GC pointed us to this 8-K filed by Kohlberg Capital Corporation yesterday. Unless we’re misinterpreting this, there are some seriously awkward conversations going on between Deloitte and Kohlberg right now (our empahsis):
Deloitte issued an unqualified opinion on the Company’s December 31, 2008 financial statements, which was included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2009. The Company is not aware of any allegation or belief by Deloitte that the information provided by the Company to Deloitte at the time of the preparation of the Financial Statements regarding the Company’s valuation methodology and procedures was incomplete or inaccurate or omitted any information requested by Deloitte at such time. On December 10, 2009, the Company and its management were advised by Deloitte that (i) the audit report issued by Deloitte accompanying the Company’s financial statements for the fiscal year ended December 31, 2008 in the Company’s Annual Report on Form 10-K for such fiscal year and (ii) Deloitte’s completed interim reviews of the Company’s financial statements for the interim periods ended March 31, 2009 and June 30, 2009 in the Company’s Quarterly Reports on Form 10−Q for those respective periods should no longer be relied upon because Deloitte had changed its position with respect to the appropriateness of the methodology and procedures used by the Company under SFAS 157 to value the Company’s investments as of the end of each of those periods and, as a result, the Company has been informed that Deloitte now believes, based upon such changed position and the additional information provided to Deloitte by the Company following Deloitte’s internal inspection process, that such Financial Statements contain material misstatements with respect to the value of the Company’s investments included therein. Accordingly, the Financial Statements should not be relied upon until the foregoing matters are resolved.
This filing followed up Kohlberg’s filing of an 8-K and form 12b-25 on November 9th to let everyone know, um, yeah, that Q is going to be late because Team D wants to take a look at this 157 stuff again. That was probably annoying enough.
But nowwwww it looks like the audit team spent the last month realizing that the pooch had been screwed on the last two 10-Qs annnnd last year’s 10-K. So yeah, don’t pay attention to the those filings. The one bright side to this is that Kohlberg had the sense to not file an unreviewed Q.
If you’ve got details on this, definitely get in touch with us, we’d love to know how the partner broke the news and how Kohlberg took it. The 8-K certainly doesn’t do that conversation justice.
Deloitte threw their “State of The Media Democracy” survey together for the fourth year in a row, and man are we glad they did. This latest opus informs us that TV is 34% of Americans’ favorite form of media and that it ranks in the top three for 70% of Americans. Viewing hours increased to almost 18 hours a week, up two hours from the same study last year.
The same survey also states that 60% of the U.S. Households have a gaming console including 70% of GenX households. So for many of you, after a long day of opining and complying, you like to go home and pwn some noobs.
Forget — for a minute — about what this reveals about Americans in general. What’s really important is that Deloitte is going out of their way to perform a survey annually that will remind all of us how lazy we are.
This is almost as helpful as as the reports based on World of Warcraft analysis. Keep up the good work, D.
Deloitte “State of The Media Democracy” Survey: Recession Intensifies America’s Love for TV [Deloitte.com]
Study: Interest in TV viewing on the rise [The Hollywood Reporter]
We received word late yesterday about two audit senior mangers in the Tampa office being shown the door yesterday. This makes us wonder if more professionals in the senior manager “parking lot” will take this is as a sign to either move on or will hold out hoping to eventually get a seat at the big table.
There doesn’t seem to be any kind of uniform method to the Deloitte’s cuts so if they’ve recently gone down at your office, let us know.
Dammit people, what’s with the amateurs? If you’re going to superficially judge your co-workers, wouldn’t common sense tell you to not to use a work email address?
Holly Leam-Taylor became the latest victim of a viral email craze when her light hearted message to colleagues spread like wildfire across the internet.
In the email, entitled Deloitte First year analysts Christmas Awards, sent on December 8, Ms Leam-Taylor asked her female colleagues to vote on which men in the office they considered most attractive.
A terribly disappointing turn of events, since it was all in good fun:
Miss Leam-Taylor, who studied at Warwick University before landing a place on the prestigious Deloitte graduate trainee scheme, said: “Obviously I never imagined the email would reach this level of awareness. Most people have recognised that what I wrote was in good spirit, but in retrospect I realise it probably wasn’t the best idea.
“It was my choice to resign and I will not be providing any further comment.”
Speaking at the family home in Staines, Middlesex, her father Andrew said: “She is very fed up about the whole thing.”
She’s fed up? What about the rest of us? We were expecting RESULTS.
Pictures, STD reports, the works. Now what the hell are we supposed to do? Is anyone willing to pick this up where poor Holly left off? If you do pick up the torch for crissakes, use a personal email address.
We cannot express our devastation further.
Analyst quits over embarrassing email [Telegraph]
Big day everyone. Oh, sure there’s that but there are far more important things on the agenda. Namely, Christmaskuh festivities/cafeteria chats at the Stamford, Long Island and two NYC offices. Perfect opportunity to discuss the nominees for most likely to catch an STD on the path to partner.
Elsewhere in the Deloitte stable, the Chicago office is amping up for its rager that is going on this Saturday in Wrigleyville:
So by “unofficial” and “informal” we’re sure that’s the “All Clear” for someone to lose their pants and/or shirt by the end of the evening. Plus, we interpret the last line as an open invitation to P. Dubs and KPMG professionals for temporary adoption into the Deloitte family.
That might be the best chance they’ll have at taking in a butchering of “O Come All Ye Faithful” and shameless ass grabbing under the mistletoe, so we suggest they consider it.
Gents, are you sick of being treated like eye candy? Are you tired of getting attention for your looks when all you want to do his serve your capital markets? Being judged for alleged promiscuity with superiors?
No? Cool with it? Good, because there are awards being handed out across the pond primarily based on your superficial qualities and your willingness to whore yourself out for personal success (click to enlarge).
We’re filling out our ballot now but as the message says, you’ve got until the 18th, so ponder these carefully. Barry Salzberg is a lock at #6, especially if he’s wearing a hard hat.
Btw, who is going to tabulate the votes? We sure as hell can’t trust anyone from Deloitte to do it. Consider this the official RFP.
Also discuss your thoughts on the categories included, what categories are omitted, nominate yourself by sending us photos (we’ll pass them along). Anything on your mind, really.
That’s right, he’s proud. Never mind that the football team just finished their season 4 – 8. Sports aren’t everything.
The Big Q, swindler of unsuspecting journalists, took time away from calling CEOs on private jets to give a speech at Utah State (his alma mater) to faculty and students on ethics.
We won’t give you all the gory details since CNN probably is working on that piece right now. We’d hate to steal their thunder.
We will mention that Quigs is swelling with pride that USU’s Jon M. Huntsman School of Business Scholars agree to “principles” which he quoted in the speech:
“I agree to conduct myself according to the highest ethical standards. I will accept personal responsibility for my conduct and any consequences for mistakes, accidental or intentional. I will be honest, truthful and fair in alof my actions and interactions with others. I will also demonstrate civil, respectful and courteous concern for and behavior toward others at all times both in and outside of the classroom.”
It seems like a fine group of sentences but I implore you: is it an oath/promise laminated on tiny cards? Hardly, dude.
Ethics and integrity aside, Quigs’ remarks seem like the standard boilerplate metaphors and clichés. Hell, he even quotes the Oracle in his conclusion, “Warren Buffett said: ‘It takes 20 years to build a reputation and five minutes to ruin it.’ And, once lost, it can take years to rebuild.”
It works well enough but we would have rather heard Quigs wrap it up with “I’ve never gone to bed with an ugly woman but I’ve sure woke up with a few.” It would’ve brought the house down. High note, Quigs. Always look to go out on that high note.
Last week we touched on Deloitte and KPMG facing off in the whole Dubai World fiasco. Today we get the lowdown on the possible difficulties that Aidan Birkett — Deloitte’s MD of corporate finance and the Chief Restructuring Offficer of DW — could run into serving his finicky client.
Hard to believe that a group of über-wealthy sheiks (responsible for re-creating the Earth out of tiny man-made islands, no less) would resist outside advice but it sounds like Birkett will have his hands full.
Zawya Dow Jones:
Bankers say his biggest challenge will be getting Dubai’s government to listen. It’s unclear whether he’ll be given a free hand to remodel Dubai World without the interference of the emirate’s political elite.
“When a foreigner comes into the country, ultimately what happens is that the door closes, people speak Arabic, they come out and they say that’s the deal,” said a Dubai-based investment banker, who asked not to be named.
That doesn’t sound complicated. Go to meeting. Listen to your interpreter struggle to keep up. The sheiks nod in agreement at each other. Meeting adjourned.
Naturally, Deloitte is confident that their man will get what he wants:
People who have worked with Birkett in the past say he is a tough operator and will demand that his advice is heeded by Dubai’s powerful sheiks.
“He is robust and he’s absolutely straight, no nonsense,” said Deloitte’s Ward in Dubai. “He doesn’t have to upset everybody along the way but he gets his own way.”
Sounds like a perfect recipe for a boardroom blowup/storm out session to us. DW doesn’t sound like it has a lot of options since all their assets were purchased with debt, so it’ll be interesting to see how they rationalize their “we’ll do whatever the hell we want” attitude. Best of luck, Deloitte.
FOCUS: Deloitte’s Birkett Faces Struggle With Dubai Sheiks [Zawya Dow Jones via WSJ]
More giant scissor danger today as Deloitte had its own ribbon-cutting in Arlington, VA to open their new Federal headquarters. According to the firm’s press release will serve as the “hub for Deloitte’s Federal Government Services.”
The firm’s press release explains how this year’s BearingPoint acquisition provided Big D with many plunders:
“The opening of our new Federal headquarters today is the final milestone in the integration of Deloitte and BearingPoint,” said Robin Lineberger, principal, Deloitte Consulting LLP, and leader of Deloitte Federal Government Services. “Deloitte was already a leader in the Federal marketplace, and the acquisition marked an aggressive expansion into the U.S. federal space, gave us increased market share, strengthened our global position and altered the entire competitive landscape. With the integration of the teams now complete, we’re thrilled to continue serving our clients in the important work they do.”
Still feels like Deloitte might be dancing on the BP grave a little bit but maybe that’s just us.
Anyhoo, now that Deloitte is well positioned to
get some lobbying done better serve its Fed clients, all the blue collar efforts can focus on The U.
Deloitte Opens New Federal Headquarters In Arlington [Press Release]
If any Deloittians were even remotely concerned that Bloomberg would squash the BusinessWeek list franchise — and thus stealing Deloitte’s crown — as part of yesterday’s completed ause for concern because the big D is now extra super special.
Deloitte has been named the “model employer” in conjunction with “The Shriver Report: A Woman’s Nation Changes Everything,” according to a press release.
The release is not yet available on the Deloitte website so we’ve presented it here:
SHRIVER REPORT NAMES DELOITTE MODEL EMPLOYER
Deloitte Recognized for its Strategies to Adapt to the Evolving Workforce
NEW YORK, December 2, 2009 — Deloitte LLP has been named the “model employer” in conjunction with “The Shriver Report: A Woman’s Nation Changes Everything,” a study released last month by Maria Shriver and the Center for American Progress. The Shriver Report is an in-depth study and analysis of what has happened, and what still needs to happen, now that women comprise half of the United States workforce and contribute significantly to household income. The study explores how business, government, the media and other institutions can work together to adapt and benefit from the trend.
The report has been delivered to President Obama, each of the Fortune 500 CEOs and all 535 members of Congress. Shriver has presented its findings to the Workforce Protections Subcommittee of the House Committee on Education and Labor.
The Shriver Report refers to Deloitte as “an excellent example of an employer that has taken an aggressive leadership position in protean career approaches,” providing career-life integration programs that allow both the organization and its workforce — women and men — to reach their goals.
Barry Salzberg, chief executive officer of Deloitte LLP, said, “Deloitte applauds The Shriver Report’s efforts to raise awareness of a trend that is not only transforming our institutions, but providing them with opportunities to grow, innovate and enhance their performance. Through our own substantial efforts to retain and advance women, we’re realizing the benefits and value to our organization, to the clients we serve, and to the cities and communities in which we do business.”
In 1993, Deloitte established the first major corporate initiative for the retention and advancement of women to harness opportunities presented by the growing representation of women in the workforce. Today, Deloitte’s Women’s Initiative focuses on building a strong pipeline of women professionals that strengthens leadership, drives marketplace growth and creates a culture where the best people — women and men — choose to be. Through a variety of ongoing professional development, mentoring and career-life programs, Deloitte has increased the number of women partners, principals and directors to more than 1,000 today from 97 in 1993.
Most recently, recognizing that one-size-fits-all workplace practices suit fewer and fewer professionals, Deloitte has moved from a corporate ladder to a corporate lattice model of career development. No longer is moving up the ultimate goal — there are now many ways to have a successful career. Since adopting this model, Deloitte’s has enjoyed a 25 percent increase in overall employee satisfaction with career-life fit and earned the No.1 ranking on BusinessWeek’s list of “Best Places to Launch a Career” in 2009.
“Deloitte’s experience since the inception of our Women’s Initiative parallels the journey described in The Shriver Report — the transition from a fixed idea of what professionals must to do develop their careers to the idea that career development can be more fluid. We have steered our organization toward a new paradigm of work, one that allows both men and women the flexibility to grow their careers and live their lives, without having to sacrifice one for the other,” said Barbara Adachi, principal, Deloitte Consulting LLP, and leader of Deloitte’s Women’s Initiative.
Deloitte’s leading talent initiatives and benefits include:
• Mass Career Customization ™ — a model that enables all Deloitte professionals to dial up and dial down their careers to fit their needs at various life stages
• Women as Buyers, a program to help men at Deloitte build stronger relationships with women clients and colleagues by better understanding their work styles
• A voluntary sabbatical program that allows Deloitte employees to take up to six months off to engage in volunteering and other personal pursuits
• Deloitte University, a state-of-the-art learning and leadership development facility currently under construction to foster personal and professional growth at Deloitte
• Paid parental leave with no minimum eligibility requirements, emergency back-up dependent day care, adoption assistance, and a Personal Pursuits program to support those who take career breaks for up to five years
As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
Dr. Phil is obviously ecstatic since he’s been out there working the diversity angle. And we have to admit that it’s nice recognition for the firm. A couple of more notable things fell under “Deloitte’s leading talent initiatives and benefits.”
We’re all familiar with Deloitte’s version of Delta Chi. The destruction will be centralized and will not doubt save the firm millions in the long run. Brilliant.
We’re even more interested in the “Women as Buyers” program. Unless we misunderstand, there must be a hell of a lot of men at Deloitte that need help understanding that their female colleagues aren’t interested in spending 2 – 3 hours a day strategizing for this week’s matchup in fantasy football. Or that shirts come in colors other than blue. Couldn’t they have passed out copies of Men are from Mars, Women are from Venus instead?
Gents, if you’ve participated in the Women as Buyers program we’d love to hear about it, since our speculation about the content is suspect at best. Also, feel free to discuss Deloitte’s latest triumph (not to mention promotion opportunity) in the realm of ubiquitous employer lists.
We kid, we kid. Obviously you’re aware that you can shell out $13 a month and get an iPhone. Whether that’s worth it or not, we’ll let you decide but if you don’t want the iPhone, you’re taking your chances with another option, as one source describes, “crappy Windows Mobile devices that are getting shoved down our throats.”
Not only that but if you’re looking to get reimbursed for your PDA, don’t expect to get to choose whatever you want. Or to spend that much:
Deloitte also now limits the re-imbursement of PDAs to $199.99 + taxes. They used to cover the entire cost of devices that they chose to support (which mostly sucked to begin with). You’d figure that since they only pay $199.99 that we’d be able to pick the device now… but no; still limited to their “approved list” of crappy devices.
We’re not really up-to-date on the whole who-gets-what-phone-at-what-level question these days so if you’ve got some insight for your firm, discuss in the comments.
We have confirmed the comment that mentions the Deloitte Holiday parties going down in the lunchroom. According to our source, this makes two years running that D has thrown it down in the caf which was a step down from the epic ’07 rager at the Waldorf. It’s not that nice of a hotel anyway.
Personally, we were hoping that Barry Salzberg was going to encourage everyone chip in and build the location of this year’s festivities with their bare hands but it might be too late to get that project started. Maybe next year.
Obviously this is less than ideal because 1) it’s definitely not a full bar and 2) instead of catering you’ll have to choose between what you think is salisbury steak and chicken a la king.
As far as atmosphere, we will admit that this is less touristy than TOTG but still. And what about the poor saps in Parsippany? Training rooms A – C? Jesus. Nothing better than crushing beers in the room where you were introduced to the FASB Codification.
First off, you’re welcome. And they already hear your bellyaching you ungrateful brats so CUT. IT. OUT.
Second, they had to do it because, as you may or may not be aware, the increasing number of emails being sent and received just might be a sign that this economy is turning around:
I’m not yet convinced that the increase we’re witnessing in the number of e-mails (and e-mail size) is an early indicator of economic growth…but just in case, we are increasing the size of your e-mail mailbox by 50 percent.
Effective immediately, you will now have 600MB to do with as you wish (of course, don’t forget our communications policies enshrined in APR 208, which will undoubtedly both constrain and guide your rush to fill that additional 200MB void). Also, the 600MB is in addition to the almost unlimited e-mail storage on your laptop using PST files.
OK…I can hear a few of you grumbling, “but Google gives me at least 1GB…for free.” Sure…but does Google provide a free laptop, a free PDA, a world-wide directory, e-mails you can search while on a plane, technical support where a live person answers the phone, and ITS walk-up support in your local office staffed with smiling IT professionals anxious to serve you? I rest my case.
One last note: Increasing your mailbox size should not be construed as an invitation to avoid reading, deleting or filing messages…or using your mailbox as your central music repository.
Enjoy the space…consider it an early holiday gift.
As always, click here to respond or provide comments. They are always welcome.
Chief Information Officer
Barry Salzberg took time from talking up
his chief rival for the Global CEO spot the new Deloitte Consulting CEO to write a piece for the Washington Post about how corporate philanthropy is alive and well.
You’re probably aware that this isn’t Dr. Phil’s first foray into virtual print. Not only has Salz given imaginary advice to the POTUS but he also did a “freewheeling” piece for Fortune on volunteerism.
The latest WaPo piece rings the same charitable note (although it’s considerably less freewheeling) and reminds everyone that not only will Deloitte continue to cut checks, they will also provide “skilled volunteers.” This is clearly part of the ongoing effort to not be seen as a giant faceless, professional services firm but a giant professional services firm that has mustache that may have buried treasure in it and a clean scalp that you can barely resist rubbing for luck.
Now while these “skilled volunteers” could possibly include the best and brightest giving NPOs the lowdown on double-entry accounting, you’ll note that the piece is entitled “Getting our hands dirty”.
Since it’s probably been many moons since the big guy has looked at a spredsheet — and he doesn’t really strike us as the type of guy to speak in metaphors — we’ll assume that he’s literally getting his hands dirty. That being said, we definitely envision something with a tool belt and possibly coveralls with an expertise in drywall or indoor plumbing.
If you’ve got thoughts on Dr. Phil’s latest scribal effort or what kind other blue-collar skills he has, discuss in the comments.
Getting our hands dirty [Washington Post]
Some leadership changes for Deloitte are being reported in the DC area, as Gary Tabach will be the new partner in the charge of the Southeast region:
Gary Tabach, Deloitte LLP’s Greater Washington managing partner, has been promoted to vice chairman and regional managing partner for the accounting and consulting firm’s Southeast region.
He is replacing Maritza Montiel, who has been named managing partner of leadership development and succession.
Tabach now oversees some 10,200 staffers in 20 offices from Baltimore to San Juan, Puerto Rico.
Mr. Tabach still has to do most of the heavy lifting for his old job as he will remain the DC managing partner.
Ms. Montiel’s new position, managing partner of leadership development and succession, strikes as mysterious. That particular title gives the impression that she is “partner in charge of telling other partners that they need to lock it up or they’re fired”. If we’re in the ballpark let us know and keep us informed about any leadership changes for your office or region.
Deloitte’s Gary Tabach lands bigger regional role [Washington Business Journal (subscription required)]
New Deloitte Consulting CEO Plugs Magazine Lists, Shuns Facebook Fans
Deloitte Consulting has appointed a new Chairman and CEO, Punit Renjen, succeeding Douglas Lattner. This is good news because A) fresh blood is always a positive and B) it’s news that doesn’t involve “Deloitte” and “lawsuit” in the same sentence.
Not only that but this Renjen character seems like a go-getter:
“I am honored to lead the talented professionals of this great consultancy, particularly at such a challenging time in the marketplace,” said Renjen.
Worst economic conditions in generations? Bah. Watch Renjen take this economy out to the woodshed. Granted, that may involve all the non-Punit Renjen Deloittians abandoning any semblance of a life outside of work for the duration of his tenure but it’ll be worth it. Why?
“Our commitment to our people is best reflected in Deloitte being named ‘The Best Place to Launch Your Career’ by BusinessWeek magazine for two years, being named a ‘Best Firm to Work for’ in 2009 by Consulting magazine and perennially ranked on Fortune’s ‘Best Companies to Work for’ list.”
Perpetual inclusion on arbitrary employer lists put out by business magazines, that’s why! While that should put your minds at ease, Renjen manages to overlook the ever-increasing Facebook, and Twitter numbers, so we wonder if he’s really cut out for this job. Just seems like a disservice to the Green-dot fans out there, that’s all.
Punit Renjen Named Chairman and CEO of Deloitte Consulting LLP [Press Release]
Two founders of casino industry supplier Global Cash Access Holdings Inc. [(“GCA”)] of Las Vegas are suing an accounting firm, charging it harmed them by disclosing information in an FBI bulletin they say wrongly associated the founders with criminal activity.
Attorneys for Robert Cucinotta and Karim Maskatiya filed suit Friday in federal court in Las Vegas against Deloitte & Touche LLP and Larry Krause, managing partner of Deloitte’s Nevada practice.
Asked about the allegations Monday, Deloitte & Touche said in a statement: “We believe the complaint to be without merit and intend to defend against it vigorously.”
The lawsuit alleges that Deloitte told GCA’s audit committee that Cucinotta and Maskatiya were involved in criminal activity including, ‘murder, extortion, tax fraud and financial fraud, and also may be subject to substantial back taxes.’
That didn’t go over well:
Cucinotta and Maskatiya assert Deloitte didn’t contact them or investigate the information in the FBI Bulletin before contacting the GCA Audit Committee; and that Deloitte demanded that GCA investigate the allegations and said it wouldn’t certify the third quarter 2007 financial statements until the probe was completed.
The actions by Deloitte caused GCA to announce on Nov. 14, 2007, it would delay filing its quarterly financial report with the Securities and Exchange Commission pending conclusion of an investigation into “confidential” issues, the lawsuit says.
“Predictably, the market reaction to that shocking press release was brutal and GCA market capitalization declined by $400 million,” the lawsuit charged, adding Cucinotta and Maskatiya together lost almost $100 million in a single day.
GCA hired Skadden Arps Slate Meagher & Flom to perform an internal investigation and the subsequent report found, ‘no evidence that (Cucinotta and Maskatiya) engaged in serious wrongdoing or are under investigation by law enforcement officials.’
Deloitte, still sketched out by Cucinotta and Maskatiya, threatened to resign as the auditors of GCA if they didn’t remove themselves from the company’s board of directors. Eventually the two men agreed and ‘pursuant to seriously oppressive terms’ sold all their shares in GCA back to the company.
So C&M get strong-armed into selling their shares back to company at a huge loss and now they want to Deloitte to settle up. While the plaintiffs’ seem to have a legitimate beef, was Deloitte acting as they should have?
Sure, maybe they jumped the gun with the information. It’s not uncommon. If you assume that Deloitte informed the audit committee that C&M were bad dudes to protect GCA’s investors, then they were probably acting in good faith (insane as that may seem). Auditors just can’t seem to win.
Casino supply company’s founders sue over link to criminal activity [Las Vegas Sun]
Jimbo obviously had ants in his pants and he couldn’t keep it to himself because after saying it’s a ‘done deal’ he admits, “The company is the one who would make the announcement. So I ought to be more cautious in terms of not speaking for them. We are prepared and ready to step into that role.”
Oh. So maybe JQ is talking out of school but he backpedaled nicely. We understand your excitement Jim but we also know that discretion is in order. Next time though, just throw caution to the wind. In fact, if it strikes you, don’t be afraid to mention how PwC screwed the pooch and their attempt to weasel out of the whole thing is a travesty.
Deloitte says will be auditors for Mahindra Satyam [Money Control]
Election Day isn’t even over and while most of you probably don’t feel bad about not going to the polls, Deloitte is already getting you amped for next year’s state gubernatorial elections:
[The] 2010 election cycles are shaping up some of the most consequential state elections in decades. Many of the nation’s largest states, from California to Pennsylvania to Florida, will see new governors in 2011. All in all, there will be at least 17 open races for governor, the most in years. Control of state legislatures is also expected to be highly competitive.
Because you can never get started too early on diving into dense policy issues, Deloitte lists seven “featured insights” that will be crucial in “regain[ing] the public’s trust” in 2010. Wow, this firm is looking out for you or what? Thanks Deloitte! You’re better than Fox News!
And just in case you didn’t think Deloitte was serious about getting you informed about the issues, the 2010 site is introduced by none other than Tom Ridge, who — unbeknownst to us — is a Senior Advisor to Deloitte.
One would think that it would be impossible for us to be saturated by election coverage for next year prior to it even starting. BY AN ACCOUNTING FIRM. Deloitte, you’ve outdone yourself.
2010 Gubernatorial Elections [Deloitte]
Deloitte has another lawsuit on its hands that is seemingly back from the dead. After last week’s revival of the Washington Mutual shareholders’ lawsuit, a suit in New York has gained new life after Deloitte initially won a dismissal.
The plaintiff in the case, Symbol Technologies, is proving tenacious:
…the panel found that Symbol Technologies had sufficiently alleged that the “continuous representation” exception to the statute of limitations and the company’s amended complaint “trigger[ed]” the “adverse interest” exception to the in pari delicto doctrine.
“Symbol’s pleading is sufficient to establish that the parties mutually contemplated that Deloitte’s work and representation for each audit year would continue after the issuance of the audit opinion/report and, therefore, the continuous representation doctrine applies,” Justice Leonard B. Austin wrote for the 4-0 panel in Symbol Technologies v. Deloitte & Touche, 2008-06642.
He later added, “In its amended complaint, Symbol set forth sufficient allegations that members of its senior management committed accounting fraud for their own benefit and totally abandoned its interest, thereby triggering the adverse interest exception.”
Nothing too fancy. Just a good, old-fashioned case of senior management fraud not being detected by the auditors:
Symbol’s lawsuit against its former auditing firm stems from an accounting-fraud scandal at Symbol that culminated with the technology giant agreeing to pay the Securities and Exchange Commission $37 million and shareholders an additional $100 million.
The SEC had charged Symbol, a Long Island, N.Y.,-based supplier of mobile information systems, and 11 of its former executives with numerous fraudulent accounting practices that together overstated the company’s reported revenue for the fiscal years of 1998 through 2001 by more than $230 million and its pre-tax earnings by more than $530 million.
The fraud resulted in overpayments to Symbol’s senior management of more than $100 million.
At least eight former Symbol executives have pleaded guilty to various charges stemming from the fraud. The company’s former chief executive, Tomo Razmilovic, remains a fugitive, living in Bussevik, Sweden.
Symbol sued Deloitte & Touche, now known as Deloitte, in November 2005, alleging the “Big Four” auditor had failed to detect the fraud. The company’s complaint does not specify the amount of damages sought.
The amount of damages being sought by Symbol hasn’t been disclosed but you’d figure Deloitte could cough up $137 mil just to put the company back to square one. But no, Deloitte is as equally determined, saying ‘the action is without merit and intends vigorously to defend this matter’.
Sorry. With a sub-par year in revenues and breaking ground on the new Animal House, Big D can’t spare the change. We’ll see you in another ten years when this thing is finally settled.
Symbol Technologies’ Massive Malpractice Action Against Deloitte Is Reinstated [New York Law Journal vi Law.com]
Deloitte has managed to keep its name out of the news lately, except for breaking ground at its version of Animal House and releasing the number of employees it has on LinkedIn.
On a more litigious note, Deloitte has managed to keep its name out of well publicized lawsuits, whether they relate to Madoff feeder funds or subprime lenders. Until now, that is.
According to AM Law Litigation Daily, a judge in Seattle has allowed a revised lawsuit to proceed that lists “Washington Mutual officers and directors, underwriters, and the auditing firm Deloitte & Touche” as defendants.
The revised lawsuit was trimmed down to a “concise” 267 pages from the original 388 that the judge described as “verbose” and “disorganized”.
The plaintiffs allege that “offering documents contained “materially misstated financial returns for WaMu” and that “offering documents contain false or misleading statements as to WaMu’s internal controls”.
Specifically — without getting into too many gory details — the plaintiffs say that WaMu did not have a sufficient loan allowance in a “manner commensurate with the quality of its home mortgage products” and that their “Loan Performance Risk Model” that determined the allowance, was basically bunk.
Deloitte, as the auditors, was supposed to call WaMu on all this shoddy work and the plaintiffs aren’t satisfied with the job they did. Unfortunately, this all amounts to a pretty major (and long) headache for Deloitte but their attorneys at Latham and Watkins are probably grateful.
Let us be the first to welcome Deloitte back to the high-profile litigation party.
Second Time’s the Charm for Plaintiffs in Washington Mutual Complaint [AM Law Litigation Daily via Law Review]
Presumably this new $300 million, 800 room facility in Westlake, Texas will help centralize the destruction caused by Deloittians when they attend various training sessions. If you’ve got any additional details or opinions on this new Mecca in the Deloitte universe, kindly enlighten us.
Oh, and they finally released their global revenue numbers.
Deloitte ended the suspense today, issuing their global revenues for fiscal year 2009 and issuing their “annual review”. For the past couple of months, we were speculating about the holdup since they have historically been issued much earlier.
Most of the comments at that time were taking the under on the revenues and they were right, as Deloitte came in at $26.1 billion. This was down 4.9% but the firm kindly reminds everyone that in local currency, there was actually growth of 1%, thankyouverymuch.
This, despite all the charts on Deloitte’s website showing the drop of 4.9%. Jim Quigley, Global CEO, and going with the local currency figures:
“Achieving positive growth in this exceptionally difficult economic environment was the result of close attention to the needs of clients and a strong commitment to professional excellence by our member firm professionals. Despite the tough economy, we remain focused on our vision to be the standard of excellence and will continue to invest in pursuit of this vision”
In addition to JQ’s assessment, an explanation of revenues by functional area continue to refer to growth while the chart shows decreases in revenues when compared to the prior fiscal year:
Consulting was the fastest growing function at 7.3 percent. Reflecting the challenging economy, both audit and tax were relatively flat against the prior year. Financial advisory services decreased by 6.1 percent from the prior year, primarily due to substantially decreased merger and acquisition activity.
On the chart, consulting was shown to only grow 2%, tax decreased by 5.5%, audit by 6.4%, and financial advisory by 13.8%. So, yeah, a little confusing. Not to mention that all of the charts present this information in what appears to be Enron Beezlebub.
Deloitte presents a whole bunch of additional information that is much larger, including how awesome the firm’s social network presence is:
• Over 75,000 members on Linked In
• Over 11,000 fans of their Facebook page
• Over 2,000 followers on their Twitter feed
And since they knew you were wondering, Deloitte uses 2.59 MWh of electricity per person, which amounts to carbon emissions of 1.31 Mt CO2 per person. Again, since this information is in much larger font, we’ll go out on a limb and assume that it positive news.
Seems like the typical spin, so we’ll take it for what it’s worth. Discuss your thoughts on Deloitte’s numbers and what it’s Facebook status might be in the comments.
Wunderkind is a little premature but we’re hopeful! Awhile back we encouraged you to help the ailing Securities and Exchange Commission get its act together. We had really no expectation that anyone would take us seriously.
On Friday, the Commission announced that 29-year old Adam Storch would be the new Chief Operating Officer of the enforcement division. Storch joined the SEC on October 13th to assume the newly created position.
It’s pretty obvious that Storch craves letters behind his name as he has “certifications in accounting, fraud examination and auditing” according to Bloomberg. JDA isn’t impressed:
As a 28 year old myself let me tell you, this is beyond disheartening. We should not be in charge of anything, much less our nation’s regulatory enforcement. We are a generation of self-centered, lazy morons (yeah I said it) and sure there are a few exceptions but for the most part, no one my age will do anything unless they get a pat on the head and a “good boy” gold star just for pissing in the toilet instead of on the floor.
The biggest headline grabber (aside from urination accuracy) is that Storch is an ex-Goldman employee which is all fine and dandy for conspiratorial purposes but he is also an ex-Uncle Dangler where he was a, GASP, “senior analyst”. He’s definitely kicking himself for missing out on 100% free preventive healthcare.
The ‘Berg doesn’t have many other details on the Enforcement Division’s new fearless leader, so we invite any details on Mr. Storch for those that worked with him. Boxers or briefs? Boozehound or teetotaler? Does he get to carry a gun at the Commission? Since he’s in “enforcement” he’s got to be packing, especially as the COO. Khuzami probably has to take off the trigger locks for him though. Good luck man.
SEC Names Goldman’s Storch as Enforcement Unit Operations Chief [Bloomberg]
Maybe! Deloitte won’t commit to that but Dallas Mayor Tom Leppert says its a done deal.
Well, sorta: “Leppert said Deloitte has not yet signed a lease, but he’s confident the company will finalize a lease to consolidate nearly all of its North Texas operations in its existing 150,000 square feet at Chase Tower.”
Hizzoner obviously doesn’t mind jumping the gun here because he’s so psyched about all the Uncle Danglers spending their hard-earned dollars in the downtown area.
Dallas Morning News:
The average Deloitte salary is $100,000, according to a city report to the Dallas City Council Economic Development Committee obtained by The Dallas Morning News. The report estimates that Deloitte would generate an economic impact of more than $3.5 billion to Dallas over 10 years. That impact includes salaries, taxes and spending by employees and clients.
An average salary of $100k? Not bloody likely if you’re including staff and support but hey, DMN, go with it. Help us out Deloitte Dallas, is that number legit or bunk?
On another note, sorry Irving, sounds like you’re SOL on some sweet Deloitte action and Dallas sure as hell isn’t being shy about dancing on your grave. We’re sure you’ll be able to screw them over somehow. Let us know how it goes.
Deloitte may move most of its local offices to Chase Tower in downtown Dallas, mayor says [Dallas Morning News]
Earlier: Apparently $2 Mil Is Enough to Keep Deloitte in Dallas