Professor Elam

Matt Lampert Research Director Socio Intitue on Stuart Varney

Thursday October 22 2020

Matt Lampert was on Stuart Varney's show today.

Matt predicted an  87% probability Trump would win based on their studies of all Presidential Elections.

Their research tied re election chances to the stock market, as much as it has been up, they think that will cinch it  for Trump..

Fines Frauds and Other Disappointments

Thursday Oct 22 2020

Purdue Pharma pleads guilty to three felonies which helped accelerate the opiod crisis.

This involves a $8.34 Billion settlement but Pharma is bankrupt. Expect about  $225 M to be paid.

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Streaming startup Quibi shuts down.

 

In an open letter to employees and investors posted to Medium on Wednesday evening, cofounders Jeffrey Katzenberg (former DreamWorks Animation CEO) and Meg Whitman (former HP CEO) wrote, “It is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets. Quibi was a big idea and there was no one who wanted to make a success of it more than we did. Our failure was not for lack of trying; we’ve considered and exhausted every option available to us.”

Gee the CEO of Dreamworks and HP, what could go wrong?

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 Lots of new electric vehicle companies, No revenue no problem

Gee this sounds a lot like the dot.coms of  2000. ya think?

 

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Ex Blue Bell CEO Charged in deadly listeria case

Prosecutors say Paul Kruse conspired to remove tainted ice cream from customer shelves without admitting wrong doing.  This is an indictment not a conviction. This is another case that has been hanging around for years.

Google Sued by DOJ

Tuesday Oct 20 2020

 

Google is being sued by DOJ over search dominance, joined by 11 State Republican AGs

Probably right and this is in keeping with lawsuits against successful companies at past market highs.

 

BRK Fined $4.1 M for Turkish Violations

Tuesday Oct 20 2020

We have noted an apparent increase in fees and fines for wrong doing, now even

Berkshire Hathaway is being fined.

Students Can Attend SA CPA CE Oct 21 -22 for Free

Tuesday Oct 20 2020

 

https://sacpasociety.com/continuing-education-events/2020-ce-symposium-webinar/

 

I asked and the SA CPA Society responded. Students must register but that allows you to attend any of the online events for free.

The entire program is displayed at the above URL.  Scroll to the bottom of the page where you will see the free student registration.

This is a valuable opportunity to see just what SA CPA Society offers its members

 

SEC Eases Regulations on Auditor Independence

Monday Oct 19 2020

Page B 5 of today's WSJ

 

The U.S. Securities and Exchange Commission adopted changes that relax some conflict-of-interest rules for companies and audit firms, making it easier for them to avoid violating auditor independence in certain situations.

But honestly I am not sure what this means.

the article says it gives auditors more discretion in assessing conflicts of interest. 

Two SEC commissioners disagreed arguing it would inject moe opportunity for uncertainty and error.

Positive mood results in a  loosening of accounting restrictions near market tops. That appears to be the case here.

Three Energy Firms that Might Bankrupt

Weekend Oct 17 2020

Here is an accounting analysis of hthree energy firms.

They may not make it with less and less business. And looks like they all took on debt when oil prices were much higher.

That is always a bad combination.

Four Scandals One Auditor / Ponzi Retrospective

Weekend October 17 2020

I don't know if this links as it is through our University Library and I had to log in but

https://search-proquest-com.tamusa.idm.oclc.org/news/docview/2451495587/fulltext/B06F603601D4050PQ/3?accountid=130967

There is a front page article in the Weekend WSJ about Luckin, Wirecard and two mid east firms all of which are failed audits and all of which

belong to EY. Actually this is right on time, consider

Enron happened right after the dot.com peak in March 2000. The resulting fall out took down Arthur Andersen and gave us SARBOX.

Nine years later we had Bernie Madoff and the sub prime crisis. Goldman had to issue a $1 B preferred stock to Warren Buffet to stay in business.  Goldman is back to reporting big profits.  This followed a market peak in Fall 2007.  That brought us Dodd Frank.

Now another ten years later, the stock market is recording another record run. And right on time we have another auditor scandal this time courtesy of EY and various mis steps by KPMG the last few years.

The article mentions that many ex EY personnel sit on the Board so firms EY audits. And that EY seeks new tech firms. Gee sounds like an echo of Enron which claimed it had new ways of doing business as well.

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And in  the weekend journal there is a Carlo Ponzi Retrospective, the  100th Anniversary

https://search-proquest-com.tamusa.idm.oclc.org/news/docview/2451495641/F073537C4809400FPQ/1?accountid=130967

 

Liz Warren Blasts Disney over Restoring Top Pay and Stock Buybacks

Thursday Oct 15 2020

I don't usually agree with Elizabeth Warren but in this case she is right.  She wrote a five page letter to Bob Iger at Disney.

Disney has laid off 28,0000 employees at its theme parks. Now it is restoring top exec pay.  In the past few years it spent $47 B buying back its own stock to increase the share price.  And of course that has weakened the financial position of the company.

As social mood grows more negative expect more such protests.

Wells Fargo Fires Dozens for Abuse of COVID Program

Thursday Oct 15 2020

Wells Fargo says it's fired workers who bilked a federal coronavirus relief program. A source tells CBS News 100 to 125 workers were shown the door.

 

Brian Dakss

Thu, October 15, 2020, 4:53 AM CDT

 

 

Wells Fargo says it's fired workers who bilked a federal coronavirus relief program. A source tells CBS News 100 to 125 workers were shown the door.

David Galloreese, head of the bank's Human Resources department, said in an internal memo provided to CBS News that the workers "defrauded" the Small Business Administration's Economic Injury Disaster Loan program.

It was designed to aid companies hurt by the coronavirus shutdown.

The program offered grants of up to $10,000 for businesses impacted by the coronavirus. But Well Fargo says it discovered that some of its employees got loans from the program and put the funds into their personal accounts.

We have detailed numerous problems at WFC over the last few years. Most involved ethical failures at the top of the organization. We study ethics and corporate governance in ACCT 5308 and  4311. Apparently the tone at the top has been such that  100 employees thought they could get away with this stunt.

Worse what does this say about internal control at the Small Business Administration?  I am guessing they just rubber stampled teh applications without asking any questions. No accountability at WFC or SBA.

 

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The Galloreese memo read in part, "Unfortunately, we have identified employees who we believe – outside of their work responsibilities – defrauded the U.S. Small Business Administration (SBA) by making false representations in applying for coronavirus relief funds for themselves through the Economic Injury Disaster Loan program, which is administered directly through the SBA.