Cms Energy Scandal and Rebound

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

Stephen Richards’s actions were extremely serious; manipulating Computer Associates’ quarter end cutoff to align CA’s reported financial results with market expectations by violating the generally accepted accounting principles and their financial reporting responsibilities. According to the U.S. Securities and Exchange Commission, Richards with other CA executives extended CA’s fiscal quarter, “ instructed and allowed subordinates to negotiate and obtain contracts after quarter end while knowing, or recklessly disregarding the fact that, CA would improperly recognize the revenue from those contracts, and failed to alert CA’s Finance or Sales Accounting Department that CA salespersons

The Enron and WorldCom scandals were arguably the incidents that permanently changed the procedures for accounting controls. In response to these incidents, the Sarbanes-Oxley Act (SOX) of 2002 was passed. Once the knowledge of these scandals was made public, a number of subsequent accounting scandals were discovered in public companies such as Tyco International, HealthSouth, and American Insurance Group. In addition, a then-employee-owned company, Post, Buckley, Schuh & Jernigan, Inc. (dba PBS&J, now known as “Atkins North America, Inc.”), was also hit by a similar accounting scandal. Henceforth, a case study of PBS&J is presented where we will examine the fraudulent transactions that

The Molex Corporation is an electronic connector manufacturing firm, which is based in Illinois. This company is facing a financial reporting problem in which the financial statements were overstated. Joe King ,the CEO of the company, was appointed in July of 2001, and was responsible for managing and inventory control, among other very important duties. Diane Bullock was hired in 2003, to replace the previous CFO. Both Bullock and King were being accused of what? by the external auditors, Deloitte & Touche, for not disclosing an 8 million pre-tax inventory valuation error.

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

On May 26, 2016, the United States Court of Appeals for the Eleventh Circuit in SEC v. Graham, No. 14-13562 (11th Cir. May 26, 2016), reached an important decision. The court extended the reach of 28 U.S.C. § 2462, the five-year statute of limitations for “any civil fine, penalty, or forfeiture” applicable to enforcement actions by the Securities and Exchange Commission (“SEC”). The court held that SEC enforcement actions for declaratory relief and disgorgement were subject to the five-year statute of limitations. The Eleventh Circuit built its ruling on top of a decision by the Supreme Court, Gabelli v. SEC, 133 S. Ct. 1216 (2013), which held that 28 U.S.C. § 2462 applied to SEC civil penalty actions.

1) a permanent order from all future violations of “Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2 thereunder, and for aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13

Issue: Should the Court rule as time-barred the Plaintiff’s claims which he makes under the Massachusetts ‘Blue Sky’ securities fraud statute and as lacking as a matter of law the Plaintiff’s claim on the Defendants’ unfair trade practices?

This particular case, involving the SEC, Coopers & Lybrand, and California Micro Devices, Inc. encompasses charges for neglecting to comply with auditing standards. The Securities and Exchange Commission makes these charges against Michael Marrie, audit partner, and Brian Berry, manager, of Coopers & Lybrand. There are three main areas in which the auditing standards were not in compliance, a write-off of accounts receivable, confirmation of accounts receivable and sales returns and allowances. The Securities and Exchange Commission make these accusations against Michael and Brian for failure

On August 2, 2007, the U.S. District Court in Houston entered final judgments in the Commission's civil action against Jerry K. Castleman, a former Enron executive and accountant, and Kathleen M. Lynn, a former Enron executive. The Commission filed a complaint against Castleman, Lynn and others stating that they had participated in a transaction that defrauded Enron's security holders to enrich themselves and others. Included in the complaint, was disclosed that they were involved in a sham sale pursuant in which Enron manufactured earnings and then repurchased the asset without reversing the earnings that they had originally purchased improperly. Some of the security law violations include filing materially false and misleading financial statements

The Securities and Exchange Commission investigated Global Crossing for more than two years before finding the fraud. The company allegedly used 'capacity swaps' between itself and other entities, which it "booked as revenue and used to pump up its financial position in 2001" (Global Crossing settles with regulators, 2005, AP Wire). "Capacity swaps" are used to "fill gaps in its network and provide bandwidth to competitors" and are technically legal but critics alleged they were conducted to inflate revenue and did not serve a legitimate purpose (Global Crossing executives defend capacity swaps, 2002, Accounting SmartPros).

Power Failure: The Inside Story of the Collapse of Enron, Mimi Swartz and Sherron Watkins, 432 pages, March 25, 2003, Crown Publishing Group, ISBN: 978-0-767-91368-3

In September, 2006, a large-sized hedge fund named Amaranth Advisors LLC lost $4.942 billion in natural gas futures trading and was forced to close their hedge fund. Although Amaranth Advisors was not exclusively an energy trading fund, the energy portion of their portfolio had slowly grown to represent 80% of the performance attribution of the fund. Their collapse was not entirely unforeseeable or unavoidable. Amaranth had amassed very large positions on both the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) in natural gas futures, swaps, and options. The trades consisted mainly of buying and selling natural gas futures contracts with a

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”

Main character in this fraud is Mr. Dennis Kozlowski, the CEO of Tyco. He misappropriated around $270 million through unauthorized loans, sale of Tyco securities and undisclosed compensation. In order to conceal these amounts, the compensation was incorrectly offset against unrelated gains. This led to violation of GAAP and misrepresented financial statements. For example, $44.6 million of bonuses were offset against gain from IPO of one of Tyco’s subsidiaries. They have also netted the bonuses with gain on disposal of business and gain on sale of common stock. According to ASC 718 Compensation, these and other bonuses should have been disclosed in operating earnings and should have decreased operating income. However, since they were offset against one-time gains, they did not have any impact on operating income. This “hiding” of compensation occurred on several occasions – the expenses were also netted against gain on sale