July 2015 The Securities and Exchange Commission recently announced its first fraud charges involving what some have called an attempt at “Robocop”, derived from tracking behavior using data analytics of large volumes of investment advisors’ trade allocation detail. The enforcement target is Welhouse & Associates Inc. and its owner Mark P. Welhouse. Mr. Welhouse is [...]
July 2015 The US Court of Appeals for the Ninth Circuit has opened the door significantly wider for those who wish to pursue qui tam False Claims Act suits by reversing a dismissal of two such matters. Ruling en banc in United States ex rel. Hartpence v. Kinetic Concepts, Inc., the Ninth Circuit has removed [...]
June 2015 The April 2013 Supreme Court decision in Comcast Corp. v. Behrend, No. 11-864, was a profound change benefitting companies facing class action lawsuits. The Court held that a plaintiff seeking certification must establish through “evidentiary proof” that damages can be measured on a class-wide basis. Individual damage issues can defeat class certification where [...]
May 2015 A recent case addressed the interesting question of whether a corporation could serve as an expert witness. The matter involved a breach of fiduciary duty case coordinated with an appraisal proceeding, in re Dole Food Company (“Dole”). The defendants designated Stifel, Nicolaus & Company, Incorporated (“Stifel”), a corporation, to serve as their expert [...]
May 2015 The U.S. Government Accountability Office (“GAO”), a government watchdog group, recently reported the results of its 2014 audit of the Securities and Exchange Commission (“SEC”) financial statements. The findings included (i) troubling reports of internal control failures at the very agency tasked with policing the reporting activities of others and (ii) warnings of [...]
April 2015 The Financial Accounting Standards Board (“FASB”) has announced a proposal to delay by one year the effective date of implementation of the new revenue recognition standard under Generally Accepted Accounting Principles (“GAAP”), making the new date of change for public companies those reporting periods beginning after December 15, 2017. Private companies would have [...]
March 2015 The Government Accountability Office (“GAO”) recently published a summary of the testimony of US Comptroller General Gene L. Dodaro regarding government efficiency and effectiveness. The GAO reports annually to Congress on federal programs, agencies, offices, and initiatives (both within departments and government-wide) that are fragmented, overlapping, or duplicative. It also identifies opportunities for [...]
March 2015 Prejudgment interest is often applied to a personal injury award in an attempt to capture the lost value of the use of monies prior to the judgment date. A recent case, Bean v. Pacific Coast Elevator Corporation (“Pacific Coast”), has addressed whether costs awarded to a plaintiff in addition to damages are also [...]
January 2015 The current tax season brings some small consolation to victims of Ponzi schemes and certain other financial fraud, with the Internal Revenue Service (“IRS”) allowing duped investors to obtain partial relief in the form of a theft loss tax deduction. Internal Revenue Code (“IRC”) 165(a) provides that a theft loss incurred in a [...]
January 2015 The Financial Accounting Standards Board (“FASB”) has issued its first accounting standards update of 2015. Simply put, FASB wishes to inform preparers of financial statements that there is nothing special about the results they are reporting, i.e., the end of the concept of “Extraordinary Items” on Income Statements. Accounting Standards Update No. 2015-01, Income Statement—Extraordinary [...]