Financial Complexity Made Clear Financial Complexity Made Clear

Fraud and Other Corporate Investigations Articles

Recent Research On Compensation Structure And Fraud Reinforces The Principals Of The Fraud Triangle

May 14th, 2013

May 2013 A recent study in The Journal of Financial Economics suggests that a compensation structure that relies on financial performance measures can be tied to [...]

SEC Hesitating To Impose Internal Audit Function Requirement On NASDAQ Companies

April 30th, 2013

April 2013 On March 4, 2013, NASDAQ issued a proposed new rule (Release No. 34-69030; File No. SR-NASDAQ-2013-032) which would require listed companies to have [...]

PCAOB Issues Second Mixed Report On Audits By Smaller Firms, But Ultimately Puts Them On Par With Larger Firms

April 2nd, 2013

April 2013 On February 25, 2013, the Public Accounting Oversight Board (PCAOB) issued its summary report on smaller accounting firms. The PCAOB described its inspections [...]

SEC To Utilize Data Analytics To Identify Accounting Irregularities

February 5th, 2013

February 2013 Data is valuable.  The question is once you have it, how can you use it?  Data analytics uses processes to extract and evaluate [...]

Government Improves Its Fraud Recovery Results, Mainly Through The Efforts Of Private Citizens

January 4th, 2013

January 2013 The False Claims Act, 31 U.S.C. § 3729 et seq., allows penalties of $5,500 to $11,000 per claim and triple damages against those [...]

DOJ & SEC Issue Guidance on Foreign Corrupt Practice Act

November 26th, 2012

November 2012 The U.S. Justice Department (DOJ) and Securities and Exchange Commission (SEC) jointly published a much anticipated guidance on the U.S. Foreign Corrupt Practices [...]

PCAOB Initial Inspections Of Smaller Broker Dealers Uncover Significant Audit Failures

September 5th, 2012

September 2012 On August 20, 2012, the Public Company Accounting Oversight Board (PCAOB) released its first report on the progress of the interim inspection program [...]

Standard Charter Bank Still In Trouble Over Iranian Money Laundering Fraud

August 28th, 2012

August 2012 In a quick settlement over Iranian-related illegal conduct, Standard Chartered Bank (SCB) agreed on August 14 to pay $340 million in a settlement [...]

Europe’s LIBOR Manipulation Is A Big Deal, But The Story Is Probably Different Than You Heard

July 10th, 2012

July 2012 UK-based Barclays is the fourth largest bank in the world, with operations in over 50 countries. Barclays recently received huge publicity pertaining to [...]

MF Global Trustee Reports Significant Management Malfeasance

June 11th, 2012

June 2012 MF Global Inc. filed the eighth-largest U.S. bankruptcy on Monday October 31, 2011.  MF Global would ultimately report the shortfall in customer accounts [...]

Billions Of Theft From The U.S. Government Could Be Stopped

June 11th, 2012

June 2012 Billions of dollars are being stolen from the U.S. Treasury through a combination of identity theft and related fraudulent tax returns.  To make [...]

California’s Business Judgment Rule Offers No Protection For Officers

June 6th, 2012

January 2012 Before its failure, IndyMac Bank was the largest savings and loan association in the Los Angeles area and the seventh largest mortgage originator [...]

Scienter (Almost) Required for 1933 Act Securities Suits

November 3rd, 2011

November 2011 It just got a lot harder to successfully sue preparers of financial statements and their auditors under the 1933 Securities Act.  In Fait [...]

First-Ever SEC Deferred Prosecution Agreement Is Hardly A “Game Changer”

August 11th, 2011

August, 2011 On May 17, 2011, the Securities and Exchange Commission (SEC) announced its first-ever deferred prosecution agreement with a company who voluntarily reported a [...]

California Appellate Court Says Attorney-Prepared Witness Statements Are Discoverable

March 17th, 2010

March 2010 Discovery requests regularly ask (often through form interrogatory 12.3 and a related document production request) for all witnesses interviewed, and to produce copies [...]

Central District of California Case Poses New Requirements For Internal Investigations

April 17th, 2009

April 2009 In an April 2009 written Order following a three-day hearing, federal judge Cormac Carney criticized Irell & Manella for “ethical failures” arising from [...]

Largest-Ever Ponzi Scheme Should Have Been Obvious To Anyone Who Looked Seriously

January 17th, 2009

January 2009 In mid-December, Bernard Madoff was arrested for operating a giant ponzi scheme. After his two sons reported him to regulators, Madoff admitted that [...]

Electronic Data Is Always Difficult … If You Don’t Try

November 17th, 2008

November 2008 The Obama campaign shattered all fund-raising records. The President-elect raised approximately twice as much money (approximately $300 million more) than McCain. A surprising [...]

Delaware Case Alters Existing Practice Regarding Use Of Special Committees

January 17th, 2008

January 2008 The Delaware Chancery Court issued a ruling in Ryan v. Gifford, C.A. No. 2213-CC (Del. Ch. Nov. 30, 2007) that runs afoul of [...]

10b5-1 Plans Deserve Greater Scrutiny by Boards of Directors

July 17th, 2007

July 2007 Stock option backdating scandals have grabbed headlines for quite some time. These scandals were initially identified by academic research that noted unexplained stock [...]