The U.S. Supreme Court left intact Jeffrey Skilling’s conviction for leading the Enron Corp. accounting fraud, refusing to grant a second hearing to the imprisoned former chief executive officer.
Today’s rebuff leaves Skilling with nothing to show for his victory at the Supreme Court in 2010, when the justices said prosecutors used an improper legal theory to convict him. A federal appeals court then reaffirmed his 19-count conviction, saying the verdict would have been the same regardless.
Skilling is serving a 24-year sentence in a federal prison in Colorado after he and former Enron Chairman Kenneth Lay were found guilty of deceiving investors about the company’s true financial condition. Lay died in 2006.
Social Justice: Current Affairs, Business, Politics, and all the reasons in the world to Thrive on Creative Discontent!
Showing posts with label accounting. Show all posts
Showing posts with label accounting. Show all posts
Monday, April 16, 2012
Thursday, February 16, 2012
North American Natural Gas Producers = Write-off, Impairment, Write-Down Season...
Many exploration and production companies have taken impairment charges during the most recent quarter as they write down the value of natural gas properties. This trend will probably continue in 2012.
Impairments
Anadarko Petroleum (NYSE:APC) recorded a $1.5 billion pretax noncash charge in the fourth quarter of 2011, related to the impairment of coal bed methane properties in the Powder River Basin. The write down was caused by low natural gas prices and came to $1 billion on an after tax basis. The company said that the write down did not reduce its proved reserve total.
Anadarko Petroleum (NYSE:APC) recorded a $1.5 billion pretax noncash charge in the fourth quarter of 2011, related to the impairment of coal bed methane properties in the Powder River Basin. The write down was caused by low natural gas prices and came to $1 billion on an after tax basis. The company said that the write down did not reduce its proved reserve total.
Conoco Phillips (NYSE:COP) reported a $190 million impairment for various natural gas properties in Canada. The company also wrote down $44 million of properties in its United States exploration and production segment, but did not give further details on these properties.
Pioneer Natural Resources (NYSE:PXD) reported an after tax noncash charge of $223 million, or $1.83 per diluted share in the fourth quarter of 2011. The write off was related to the company's properties in the Edwards trend play in Texas.
The Edwards play is present on the company's acreage in south Texas and lies below the Eagle Ford Shale in many areas. The company used to be very active in this play, and as recently as the first half of 2008, drilled 22 wells into this dry gas formation. The company suspended drilling in the Edwards trend in 2009. It also wrote off $20 million in unproved dry gas properties in other areas of its portfolio.
Comstock Resources (NYSE:CRK) also suffered from the decline in natural gas prices, and recorded a fourth quarter pretax impairment charge of $60.8 million related to its proved natural gas properties. On an after tax basis the write down was $39.5 million, or 86 cents per share.
Comstock didn't say where the impaired properties were located, but the company recently suspended operated drilling activity in the Haynesville Shale. The company plans to end development here by March 2012.
It has been very active in the Haynesville Shale over the last few years, and has drilled 180 gross wells here since entering the play in 2008.
The Bottom Line
Most exploration and production companies tend to downplay impairment charges as non-charge accounting items and bury them deep in the footnotes of financial statements.
Most exploration and production companies tend to downplay impairment charges as non-charge accounting items and bury them deep in the footnotes of financial statements.
Friday, November 25, 2011
MF Global, PricewaterhouseCoopers, and video tapes...
Six months ago the accounting firm PricewaterhouseCoopers LLP said MF Global Holdings Ltd. and its units “maintained, in all material respects, effective internal control over financial reporting as of March 31, 2011.” A lot of people who relied on that opinion lost a ton of money.
MF Global filed for bankruptcy on Oct. 31. This week the trustee for the liquidation of its U.S. brokerage unit said as much as $1.2 billion of customer money is missing, maybe more. Those deposits should have been kept segregated from the company’s funds. By all indications, they weren’t.
What’s the point of having auditors do reports like this? And are they worth the cost? It’s getting harder to answer those questions in a way the accounting profession would favor.
When an auditor certifies that a client’s internal controls are effective, that’s supposed to mean the company can do basic functions like maintain accurate financial records, detect unauthorized transactions and keep track of its receipts and expenditures. We know MF couldn’t do these things during the final days before its bankruptcy filing, when former New Jersey Governor Jon Corzine was still its chief executive officer.
“Their books are a disaster,” Scott O’Malia, a commissioner at the Commodity Futures Trading Commission, told the Wall Street Journal in an interview two weeks ago. The newspaper also quoted Thomas Peterffy, CEO of Interactive Brokers Group Inc., saying: “I always knew the records were in shambles, but I didn’t know to what extent.” Interactive Brokers backed out of a potential deal to buy MF last month after finding discrepancies in its financial reports.
If Pricewaterhouse can’t spot control weaknesses at a relatively small shop like MF, which had $41 billion of assets, it’s a bit much to expect that the firm would catch anything materially amiss at Goldman, which has $949 billion of assets, or at a serial acquirer such as JPMorgan, with $2.3 trillion of assets.
MF Global filed for bankruptcy on Oct. 31. This week the trustee for the liquidation of its U.S. brokerage unit said as much as $1.2 billion of customer money is missing, maybe more. Those deposits should have been kept segregated from the company’s funds. By all indications, they weren’t.
What’s the point of having auditors do reports like this? And are they worth the cost? It’s getting harder to answer those questions in a way the accounting profession would favor.
When an auditor certifies that a client’s internal controls are effective, that’s supposed to mean the company can do basic functions like maintain accurate financial records, detect unauthorized transactions and keep track of its receipts and expenditures. We know MF couldn’t do these things during the final days before its bankruptcy filing, when former New Jersey Governor Jon Corzine was still its chief executive officer.
“Their books are a disaster,” Scott O’Malia, a commissioner at the Commodity Futures Trading Commission, told the Wall Street Journal in an interview two weeks ago. The newspaper also quoted Thomas Peterffy, CEO of Interactive Brokers Group Inc., saying: “I always knew the records were in shambles, but I didn’t know to what extent.” Interactive Brokers backed out of a potential deal to buy MF last month after finding discrepancies in its financial reports.
If Pricewaterhouse can’t spot control weaknesses at a relatively small shop like MF, which had $41 billion of assets, it’s a bit much to expect that the firm would catch anything materially amiss at Goldman, which has $949 billion of assets, or at a serial acquirer such as JPMorgan, with $2.3 trillion of assets.
Thursday, September 8, 2011
If you have nothing to (hide) transparency is your friend!
The U.S. Securities and Exchange Commission filed an enforcement action against Shanghai-based Deloitte Touche Tohmatsu CPA Ltd. for failing to produce documents related to an investigation of its former auditing client Longtop Financial Technologies Limited.
D&T Shanghai hasn’t provided any documents to the SEC, which issued subpoenas to the firm on May 27, the agency said in a statement today, citing a filing in U.S. District Court in Washington. As a result, the SEC has been unable to access “critical” information in its probe of possible fraud at Longtop, the statement said.
Longtop, based in Hong Kong, said in May that D&T Shanghai quit because of errors in the company’s financial records. The SEC also began an investigation. In July, the SEC and Public Company Accounting Oversight Board met with counterparts in China to discuss cross-border oversight.
Today’s action “essentially is a battle between the SEC and Chinese regulators forcing D&T Shanghai to assert Chinese law as an explanation for why it cannot produce records,” Jacob Frenkel, a former SEC lawyer now with Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland, said in an interview. “Auditing firms know that the SEC has the right to subpoena and review and consider audit work papers. This is about bringing to a head the dispute over access to information relating to audits of Chinese companies.”
In order to compete fairly we must have transparency; otherwise we'll all be guilty of doping our domestic businesses to the detriment of the competion.
D&T Shanghai hasn’t provided any documents to the SEC, which issued subpoenas to the firm on May 27, the agency said in a statement today, citing a filing in U.S. District Court in Washington. As a result, the SEC has been unable to access “critical” information in its probe of possible fraud at Longtop, the statement said.
Longtop, based in Hong Kong, said in May that D&T Shanghai quit because of errors in the company’s financial records. The SEC also began an investigation. In July, the SEC and Public Company Accounting Oversight Board met with counterparts in China to discuss cross-border oversight.
Today’s action “essentially is a battle between the SEC and Chinese regulators forcing D&T Shanghai to assert Chinese law as an explanation for why it cannot produce records,” Jacob Frenkel, a former SEC lawyer now with Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland, said in an interview. “Auditing firms know that the SEC has the right to subpoena and review and consider audit work papers. This is about bringing to a head the dispute over access to information relating to audits of Chinese companies.”
In order to compete fairly we must have transparency; otherwise we'll all be guilty of doping our domestic businesses to the detriment of the competion.
Sunday, August 21, 2011
It's all in the numbers
SinoTech Energy Ltd. (CTE), a provider of equipment to boost oilfield production, was sued in the U.S. by an investor claiming securities violations after its shares plummeted.
Investor Bhushan Athale alleges that Beijing-based SinoTech’s financial reports were “inaccurate because the nature, size and scope of the company’s business was materially exaggerated,” according to a complaint filed yesterday in Manhattan federal court. Athale is seeking to sue on behalf of buyers of the company’s American depositary shares since its November initial public offering.
SinoTech plunged 42 percent to $2.35 on the Nasdaq Stock Market on Aug. 16 after Alfredlittle.com published a short- seller’s note saying the company’s largest customers were probably “nothing more than empty shells” and that it’s worth less than 63 cents a share. SinoTech called the note “inaccurate and defamatory.”
Trading has been halted in the shares and the company said in a statement yesterday that it intends to “cooperate fully” with Nasdaq to address the stock market’s concerns. The trading halt has rendered the ADS “essentially worthless,” Athale said in the complaint.
Rebecca Guo, a spokeswoman for the company in Beijing, didn’t return a phone call or respond to an e-mail placed to her office outside business hours in China seeking comment on the lawsuit.
In an Aug. 17 statement, the company said it wasn’t aware of material omissions in its financial statements and that it had appointed an independent committee to investigate.
“We are outraged by this blatantly self-interested, mercenary attempt to profiteer at the expense of SinoTech and its shareholders,” Chief Executive Officer Xin Guoqiang said in the Aug. 17 statement.
The case is Athale v. SinoTech Energy Ltd., 11-CV-5831, U.S. District Court, Southern District of New York (Manhattan).
Investor Bhushan Athale alleges that Beijing-based SinoTech’s financial reports were “inaccurate because the nature, size and scope of the company’s business was materially exaggerated,” according to a complaint filed yesterday in Manhattan federal court. Athale is seeking to sue on behalf of buyers of the company’s American depositary shares since its November initial public offering.
SinoTech plunged 42 percent to $2.35 on the Nasdaq Stock Market on Aug. 16 after Alfredlittle.com published a short- seller’s note saying the company’s largest customers were probably “nothing more than empty shells” and that it’s worth less than 63 cents a share. SinoTech called the note “inaccurate and defamatory.”
Trading has been halted in the shares and the company said in a statement yesterday that it intends to “cooperate fully” with Nasdaq to address the stock market’s concerns. The trading halt has rendered the ADS “essentially worthless,” Athale said in the complaint.
Rebecca Guo, a spokeswoman for the company in Beijing, didn’t return a phone call or respond to an e-mail placed to her office outside business hours in China seeking comment on the lawsuit.
In an Aug. 17 statement, the company said it wasn’t aware of material omissions in its financial statements and that it had appointed an independent committee to investigate.
“We are outraged by this blatantly self-interested, mercenary attempt to profiteer at the expense of SinoTech and its shareholders,” Chief Executive Officer Xin Guoqiang said in the Aug. 17 statement.
The case is Athale v. SinoTech Energy Ltd., 11-CV-5831, U.S. District Court, Southern District of New York (Manhattan).
Subscribe to:
Posts (Atom)