Responsibilities for Offerings of Securities

at Schwab and that Castro acted upon protected company data lists to gain an unfair competitive

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

When assessing the economic damage to due to Paul Thayer and those that he tipped off about the acquisition of Campbell Taggart, it should be noted that some argue that this kind of insider trading circulates information and forces the stock to its “true value.” If we assume this argument to be flawed, then part of Anheuser-Busch stock dip after the announcement was due to the insider trading and the fact Anheuser-Busch probably paid more to acquire its target. Thayer and his friends trade the Campbell stock for nearly a month before any public announcement of the merger. On July 27 nearly half the volume was insider volume controlled by those individuals who were in violation of rule 14(e)-3 (See exhibit 2). The increased volume might

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

For instance, the funds owed the company by the Rigas family went undisclosed in the statements, because the management at Adelphia deemed such disclosure as being “unnecessary” (Barlaup, Hanne, & Stuart, 2009). Given that Adelphia was a publicly traded company, the purposeful non-disclosure caused potential investors to rely on financial records that were grossly misleading. The inevitable result was the investors continued to inject money into a company that had all the appearances of profitability and sustained growth, but that was, in reality, rapidly becoming insolvent. Moreover, lending institutions also relied on the “independently-audited” financial statements, and they were more than eager to loan the company money, given Adelphia’s presumed state of financial “profitability.”

The major conspiracy was uncovered by Manhattan District Attorney, Robert Morgenthau, who was investigating Kozlowski for income tax evasion for some fine art work that he had purchased. As Morgenthau kept digging into the record keeping of Tyco and Kozlowski, it was determined that there were other situations that had occurred, such as a 10 million dollar loan that was totally forgiven by Tyco, and all interest was billed to the corporation. It became apparent on January

The Court found that Cuban had not “misappropriated” any material non-public information because he had not violated a “legal duty to refrain from trading. Cuban had not promised that he would not trade after learning about a PIPE offering. The judge also said that the SEC failed to show that Cuban undertook a legal duty to not use the information he learned from those two phone calls with Mamma.com representatives. Mark Cuban did not have any fiduciary duty to not act upon the information. The Mamma.com CEO asked Cuban to keep their conversation confidential. However, that didn’t prove that Cuban had a legal duty to Mamma.com that would prohibit him from selling his shares based on what he was told. He just promised to not disclose the information to the others, not promised to not act upon what someone told him.

Levin and Goldberg quickly shot down Gilmore’s idea of adding a footnote about the warehouse arrangement where South City Electronics would ship their goods to Kelly Electronics who would then sell it to Victor Systems, while South City recognized revenue immediately. Not disclosing this arrangement would be in direct violation of AICPA’s Code of Professional Conduct. Levin even told Gilmore himself that the footnote would create doubt in the public and wonder what accounting practices they are partaking in. With this being said, this would violate the public trust principle. This principle states that South City has a responsibility to the public to serve them honestly, and to carry out their duties with integrity and objectivity. If they go through with this warehouse arrangement and add the footnote, the public would wonder what other manipulative accounting practices they use to meet their earning goals. If they don’t add the footnote, they would be violating AICPA’s Code of Professional Conduct integrity and objectivity rule, which states that a member can not knowingly misrepresent facts to the public. This warehouse arrangement would allow South City to record a $1.2 million sale early, before the goods have reached the final customer, Victor Systems which violates SEC and FASB

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?

He also increased the risk exposure of the bank and had hidden it from its superiors. By using his reputation and the trust from the bank he speculated while he should not have been able to do so.

S.1043A “prohibits anyone in possession of non-public, price sensitive information from dealing in, or engaging others to deal in, the shares of a company” (text). After Patricia gained non-public, price sensitive information about SEPL’s intentions to buy a large amount of shares in FPPL, she immediately told her sister and engaged her in buying shares in

The Securities and Exchange Commission (SEC) acted in a timely and appropriate manner when addressing the forbidden arrangements that were discovered from PwC and PwCS. Although the punishments were deemed harsh, the repercussions were appropriate in this case. The harsh nature of the punishments stemmed from the speculation of the SEC that PwC and Coopers & Lybrand officials were well aware that the fee arrangements that were made were banned. The AICPA and SEC govern the rules regarding independence and conflicts of interest that may arise and these companies were well aware of this governance and oversight prior to arranging the contingent fees. There is a distinct breach of independence that is formed from the actions that were made, that deserves a harsh punishment from the SEC. Without punishment from the SEC, there would be a lack of oversight with controlling companies from making arrangements to compromise independence and properly integrate internal controls.

This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government's and the Security and Exchange Commission's concern in promoting ethical standards in terms of financial disclosure in the corporate environment.

Bollenbach knew that the next steps would be critical or the deal to go through. As such it was necessary to first research the investors and arbiters to have better negotiation tactics when the time comes.

The move came after Bear Stearns was bleeding cash after word spread about the company’s crumbling position. European banks and other brokerage clients were pulling their investments and loans with Bear Stearns rapidly—and the company was losing billions in a week. In a swift move, the CEO of Bear Stearns, Alan Schwartz, was connected with the FED Chairman Ben Bernake, who agreed to loan money to JPMorgan if the financier company took over the quickly deteriorating Bear Stearns. It is argued that the FED was right in doing so as this move not save one of the largest American investment banks thus preventing a crushing blow to the US economy.