This week's market-movers.
SEC targets banks; In-house cleanups
Stock option accounting reform should be "low on the list of priorities,"
said SEC Chief Accountant Robert Herdman, who is at the center of the
SECs accounting reforms.
J.P. Morgan and Citicorp
were accused by Senate investigators of helping Enron "camouflage" $8
billion in off-the-book loans over six years.
New York Times
Deloitte Consulting was
renamed Braxton, after the consultancy it purchased in 1984.
Wall Street Journal
On behalf of the IRS,
the Justice Dept. sued US arms of KPMG and BDO. The IRS is seeking
evidence that those firms have been marketing tax shelters improperly.
Accountancy Age (UK)
"Corporate governance legislation will spark market recovery." Market responds
CMS Energy Corp.,
accused of false power trades, announced CFO Alan Wright's resignation.
Citigroup, J.P. Morgan Chase officials told Senators their Enron financing (and
structured finance) was legit. Senators disagreed. Bank stocks dropped sharply.
WSJ, NYT, Financial
put PNC Financial under six-month watch.
British MPs called for
a Competition Commission inquiry into the Big Four.
AOL reveals it
is latest SEC accounting target. Share price drops six percent.
New York Times
asked for a higher salary and more clout. No. Washington Post, NYT
The IRS apologized
for revealing the names of hundreds of taxpayers in its tax-shelter lawsuit against KPMG.
Those involved should be investigated. Partisan too.
WSJ Editorial page
Adelphia, Global Crossing, Qwest, billions gone, no sector reform.
The White House
initiated a market fallout containment strategy. Yesterday it took credit for the Adelphia
arrests and cancelled Treasury Secretary Paul H. O'Neill trips.
PwC sold U.S.
restructuring business to Annapolis, Md.-based FTI Consulting Inc., in a
$230m deal. The auditor has also sold valuation, lobbying, and HR businesses.
apologized to his 270 thousand Citigroup employees for supporting Enron.
"By today's new standards
we will evaluate client transactions in an entirely
different light." Also, its potential Achilles heel ubiquitous financial
services -- is exposed.
latest to deduct stock option costs, perversely evading black ink.
Its a tax
loophole blessed by the IRS. Milbank, Tweed, Hadley & McCloys tax head uses
life insurance to pass wealth without much taxation and its a hit. Controversy
Accounting firm KPMG
was put on probation for a year for alleged gross negligence and unprofessional conduct
that contributed to Orange County's 1994 bankruptcy filing.
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