I’m as much of a baseball stathead as the next guy, but I must admit that it never occurred to me to compile the creative statistics that are featured on this imaginative new blog — Plunk Biggio.
The blog is “dedicated to Craig Biggio and his (probably unintentional) Quest to break the all time major league career record for getting hit by pitches.”
Hat tip to the always alert Charles Kuffner for the link.
Although such matters are notoriously unpredictable, the SCOTUS blog — the premier U.S. Supreme Court blog — reports that observors of the oral argument earlier today on Arthur Andersen’s appeal to the Supreme Court of its witness tampering conviction unanimously reported that the Justices appeared to favor Andersen’s side of the argument strongly. In particular, Justice Scalia expressed incredulity at the government’s position:
“You want criminal liability to attach to that?” Justice Scalia asked, referring to Andersen in-house lawyer Nancy Temple’s email. “You want somebody to go to jail?”
Here is the Washington Post report on the argument.
As noted earlier here and here, there are several characteristics of the structure of American International Group Inc. that are similar to the structure of Enron Corp. In particular, both companies’ business is largely dependent on its customers’ trust and, as Enron showed us in dramatic fashion, once that trust is lost, a company structured in such a manner can literally collapse in a very short period of time.
On face value, this report from yesterday regarding the Lord of Regulation‘s investigation into whether AIG wrongly pocketed tens of millions of dollars in insurance premiums that should have gone to the New York state workers’ compensation fund is probably not any more damaging to the public’s trust in AIG’s finances than any of the dozens of other revelations that have occurred in regard to AIG and Berkshire Hathaway in connection with that investigation over the past couple of months.
However, in what can only be described as an astounding revelation in this morning’s Wall Street Journal ($) article, AIG’s general counsel in 1992, E. Michael Joye, informed AIG’s senior management — including former CEO Maurice “Hank” Greenberg — that the company’s accounting treatment with regard to the insurance premiums was illegal. Even more interestingly, Mr. Joye resigned from AIG (or was forced out) later that same year over problems relating to accounting issues.
To top it all off, according to the WSJ article, Mr. Joye provided to the Lord of Regulation a copy of his memo to AIG management about the insurance accounting issue, and then AIG waived its attorney-client privilege regarding Mr. Joye’s memo and the accounting issue to allow Mr. Spitzer’s office to proceed with its investigation into the issue. AIG’s board is allowing this highly unusual level of cooperation with the Lord of Regulation because of its realization that the Lord has the board over a barrel: if the AIG board were to assert such basic rights as the attorney-client privilege, then the Lord of Regulation would almost surely issue an indictment that would have a potentially cataclysmic effect on AIG’s various insurance licenses.
On the other hand, if AIG’s senior management forced Mr. Joye out because of his calling out of questionable or illegal accounting practices, then that would reflect a serious defect in AIG’s internal controls in that an advocate of adhering to legal requirements was canned rather than rewarded. Inasmuch as a similar defect in internal controls allowed Enron’s Andrew Fastow to profit wildly from Enron’s apecial purpose entities while serving as Enron’s CFO, this latest revelation about AIG sure is starting to sound familiar, isn’t it?
By the way, the WSJ’s ($) article on AIG’s ultra-exclusive New York area golf club — Morefar — makes it sound as if getting an invitation to play Augusta National is easy in comparison to getting one to play Morefar.
It appears to be settlement week for big accounting firms as Deloitte & Touche joined KPMG and Arthur Andersen in settling a troubling litigation matter.
Deloitte & Touche LLP announced yesterday that it will pay a $50 million fine to settle Securities and Exchange Commission civil charges that it failed to prevent massive fraud at bankrupt cable company Adelphia Communications Corp.
And, just to add insult to injury, the SEC took issue with with Deloitte’s press release regarding the settlement, in which Deloitte blamed Adelphia by saying the company and some executives “deliberately misled” Deloitte’s auditors. Under terms of its settlement agreement with the SEC, Deloitte was required neither to admit nor deny the SEC’s charges. Inasmuch as the Deloitte statement at least implied that Deloitte was denying liability, the SEC took the unusual step of forcing Deloitte to rescind the public statement (WSJ $). It’s bad enough blowing the audits, but blowing the press release on the settlement really gets the SEC’s blood boiling:
“Deloitte’s characterization of the case is simply wrong. Deloitte was not deceived,” said Mark K. Schonfeld, director of the SEC’s Northeast Regional Office. “They didn’t just miss red flags, they pulled the flag over their head and then claimed they couldn’t see.”
The SEC’s Litigation Release over the settlement explains the problems with Deloitte’s audit of Adelphia:
The Commission’s complaint against Deloitte alleges that, during Deloitte’s audit of Adelphia’s financial statements for the year ended December 31, 2000, Deloitte failed to implement audit procedures designed to detect the illegal acts at Adelphia and failed to implement audit procedures designed to identify material related party transactions or related party transactions otherwise requiring disclosure. Among other things, Adelphia understated its subsidiary debt by $1.6 billion, overstated equity by at least $368 million, improperly netted related party receivables and payables between Adelphia and related parties, and failed to disclose the extent of related party transactions.
Here is the SEC Complaint and related administrative order in the Deloitte/Adelphia case.
Finally, in what amounts to a settlement of a “slip and fall” case for an auditing firm these days, Deloitte agreed to pay $375,000 in a separate matter to settle SEC charges that it failed to uncover accounting fraud in its 1998 audit of the sports retailer, Just for Feet, which ended up filing bankruptcy shortly thereafter. As a part of that settlement, a couple of Deloitte partners on that audit agreed to bans of at least a year in practicing as an auditor before the SEC. Here is the SEC order instituting administrative proceedings in that matter.
The University of Nebraska’s storied football program has fallen on hard times recently, and it seems like forever since the Huskers were even competitive in a football game against their arch-rival, Oklahoma. And the program hasn’t fared very well in the courtroom, either.
Following on the incident reported in this post from last fall, this CBS Sportsline article reports jury selection in Cleveland County, Oklahoma District Court for the former Nebraska offensive lineman who is charged with aggravated assault for ramming a University of Oklahoma’s spirit squad member into the brick wall that surrounds OU’s Owen Field prior to the most recent Nebraska v. OU football game last November. The Nebraska lineman faces up to five years in the slammer if convicted on the charge.
Given the home court advantage, the prosecution is favored. ;^)