Obama says he’s not caving on tax cuts [CNN]
President Barack Obama declared Friday that his “number one priority” is preserving tax cuts for the middle class, and sharply denied that comments by his senior adviser David Axelrod suggest that his administration is about to cave in to Republicans who also want to extend the Bush tax cuts for the wealthy.
“That is the wrong interpretation because I haven’t had a conversation with Democratic and Republican leaders,” Obama said of a Huffington Post article suggesting that in advance of negotiations with lawmakers next week, the White House has calculated that giving in on tax cuts for the rich is the only way to get the middle too.
Companies Would See Big Tax Shifts [WSJ]
Tax-reform plans proposed by President Obama’s deficit-cutting commission would radically change corporate tax policy and, business groups say, could improve U.S. competitiveness in global trade. But they also could create winners and losers among U.S. companies.
Business groups and economists have long sought fundamental changes to the tax code, which hasn’t been overhauled since 1986.
Pwning the social debate [AccMan]
Proceed with caution. Sayeth Dennis Howlett, “If the title of this post bamboozled you, the rest will make your head explode.”
House Dem leaders’ reactions to fiscal panel report differ sharply [The Hill]
Speaker Nancy Pelosi (D-Calif.) came out swinging, calling the proposals “simply unacceptable,” while the two men battling to be her deputy, Majority Leader Steny Hoyer (Md.) and whip James Clyburn (S.C.), released muted responses. Neither Hoyer nor Clyburn criticized the commission, avoiding a politically explosive set of ideas as they wrestle for support from their Democratic colleagues for the post of minority whip.
Backdating Scandal Ends With a Whimper [DealBook]
“These prosecutions went out with a whimper rather than a bang,” said Christopher J. Clark, a criminal defense lawyer at Dewey LeBoeuf who has done work on backdating cases. “With few convictions and no substantial sentences, juries and the courts simply did not agree with the government’s position that stock option backdating represented a serious financial crime.”
Richard Hatch still surviving life’s rocky road [Providence Journal]
Survivor champ, convicted tax dodger and “l’m living on borrowed 15-minutes-of-fame time” Richard Hatch is now going to be on the Celebrity Apprentice.
A QuickBooks Alternative for the Accounting-Phobic Owner [You’re the Boss/NYT]
Spooked by QuickBooks? WorkingPoint may be the solution for the debit-credit disinclined.
Newsweek, Daily Beast Set Merger [WSJ]
Under the proposed agreement, expected to be disclosed Friday, the two news organizations will be combined in a 50-50 joint venture called the Newsweek Daily Beast Co. The deal comes three weeks after the two sides abandoned talks of a merger over a disagreement about control.
The SEC, under attack last week for its Goldman lawsuit and porn allegations, late Friday finally had a victory to celebrate.
Carl Jasper, the former chief financial officer of Maxim Integrated Products was found liable for securities fraud in a stock-option backdating lawsuit filed by the SEC’s San Francisco office, according to Bloomberg.
Carl Jasper, the former chief financial officer of Maxim Integrated Products was found liable for securiti option backdating lawsuit filed by the SEC’s San Francisco office, according to Bloomberg.
It was a rare civil jury trial involving backdating allegations.
Even rarer, it was the second backdating case decided in a court in one week.
Earlier in the week the former CEO of KB Home was convicted of four felony counts in a criminal stock option backdating case.
In the Jasper case, the former finance executive of the maker of chips for laptop computers was found liable on eight out of 11 counts, and cleared him on three, according to The Recorder. Bloomberg said he was found liable for fraud, lying to auditors, and aiding Maxim’s failure to maintain accurate books and records.
“We are pleased that a jury sitting in the heart of Silicon Valley recognized that stock-option backdating is, in fact, a fraudulent practice that matters to investors, and that Mr. Jasper, as the CFO of a public company, was ultimately responsible for misleading investors about the accuracy of Maxim’s financial reports,” Mark Fickes, trial counsel for the SEC, told the wire service in an e-mail statement after the eight-day trial.
Jasper’s lawyer, Steven Bauer, told Bloomberg in an e-mail he will ask the judge to overrule the jury verdict at a May 24 hearing. “Carl Jasper is a good man who never intended to do anything wrong,” he reportedly said. “This is the first step in a long road, and we are confident that in the end he will prevail.”
In late 2007, the SEC filed civil charges against Maxim, Jasper and former chief executive officer John F. Gifford, alleging that they reported false financial information to investors by improperly backdating stock option grants to Maxim employees and directors.
The Commission alleged that Jasper helped the company fraudulently conceal tens of millions of dollars in compensation expenses through the use of backdated, “in-the-money” option grants.
In a separate action, Gifford agreed to pay more than $800,000 in disgorgement, interest, and penalties to settle charges relating to his role in the options backdating.
Maxim, without admitting or denying the Commission’s allegations, consented to a permanent injunction against violations of the antifraud and other provisions of the federal securities laws.
The Commission’s complaints also alleged that Jasper was aware of the improper backdating practices, drafted backdated grant approval documents for Maxim’s CEO to sign, and disregarded instructions from CEO Gifford to record an expense in connection with certain backdated options. According to the Commission, Gifford should have known that the company was not reporting expenses for those in-the-money stock options and instead was falsely reporting that they were granted at fair market value.
According to The Recorder, in his opening statement at the trial, Bauer said Gifford, who is now deceased, was to blame for the backdating and not Jasper.”You can’t talk about options at Maxim without talking about Mr. Gifford,” Bauer reportedly told the court. “You can’t talk about picking dates without talking about Mr. Gifford.”
The SEC is seeking injunctive relief, disgorgement of wrongful profits, a civil penalty, and an order barring Jasper from acting as an officer or director of a public company.
Early last week, Bruce Karatz, the former CEO of KB Home was convicted of four felony counts in a stock option backdating case. He was found guilty of two counts of mail fraud, one count of lying to company accountants and one count of making false statements in reports to the Securities and Exchange Commission, according to published reports.
He was acquitted on 16 other counts, including mail and wire fraud, securities fraud and filing false proxy statements, according to Bloomberg.
He faces up to 60 years in prison when he is sentenced.