The Donald W. Reynolds National Center for Business Journalism presented the free, three-hour workshop, "Detecting Corporate Fraud: Tips from a Crook and a Sleuth," before the Investigative Reporters and Editors Conference on June 25, 2014.
Roddy Boyd, investigative reporter and founder of the Southern Investigative Reporting Foundation, led this investigative training with Sam E. Antar, former CFO of Crazy Eddie, Inc. and convicted felon.
To access all training materials provided during the series of "Detecting Corporate Fraud" workshops, please visit http://bit.ly/cofraud14.
For information about business journalism training and resources, please visit http://businessjournalism.org.
Theo Francis of The Wall Street Journal and Roddy of the Southern Investigative Reporting Foundation present "Detecting Corporate Fraud." Sponsored by the Donald W. Reynolds National Center for Business Journalism, this workshop preceded the Investigative Reporters & Editors NICAR Conference in Baltimore on Feb. 26, 2014.
For more information about business coverage training for journalists, please visit http://businessjournalism.org.
Theo Francis of The Wall Street Journal and Roddy of the Southern Investigative Reporting Foundation present "Detecting Corporate Fraud." Sponsored by the Donald W. Reynolds National Center for Business Journalism, this workshop preceded the Society of American Business Editors and Writers Conference in Phoenix on March 25, 2014.
For more information about business coverage training for journalists, please visit http://businessjournalism.org.
Getting Your Venture "Game Ready" for FundingAndrew Tulchin
Triple bottom line efforts need capital. But securing this capital is often challenging, despite impactful value propositions and promising ROIs. Meanwhile, options for funding are expanding, creating a dizzying array of options for the entrepreneur. In this workshop, you’ll work with two experienced social enterprise funding advisors to get your efforts “game ready” for funding. You’ll learn how to package your venture to successfully raise the funds you need… and from the right type of capital source.
Fundamental Global | Some Investors Wonder if Mellon Financial Is Being All I...Fundamental Global
Mellon Financial has in recent years undergone a makeover, transforming itself from a slow-growing mid-Atlantic bank into an asset management giant.
Over the last six years, it has shed its consumer banking businesses and grown its money management units, which rake in hefty fees. But some say that Mellon remains one of the banking industry's ugly ducklings still waiting to blossom.
Transcript: Alternatives for a Distressed Company in Apparel and RetailExpert Webcast
The discussion includes the process of bidding for, financing and acquiring distressed companies in the Apparel and Retail space is competitive and complex. The panel addressed the strategies and tips for success from the perspectives of an investment banker, a deal and bankruptcy lawyer, a turnaround executive, a lender and a tax accountant.
Theo Francis of The Wall Street Journal and Roddy of the Southern Investigative Reporting Foundation present "Detecting Corporate Fraud." Sponsored by the Donald W. Reynolds National Center for Business Journalism, this workshop preceded the Investigative Reporters & Editors NICAR Conference in Baltimore on Feb. 26, 2014.
For more information about business coverage training for journalists, please visit http://businessjournalism.org.
Theo Francis of The Wall Street Journal and Roddy of the Southern Investigative Reporting Foundation present "Detecting Corporate Fraud." Sponsored by the Donald W. Reynolds National Center for Business Journalism, this workshop preceded the Society of American Business Editors and Writers Conference in Phoenix on March 25, 2014.
For more information about business coverage training for journalists, please visit http://businessjournalism.org.
Getting Your Venture "Game Ready" for FundingAndrew Tulchin
Triple bottom line efforts need capital. But securing this capital is often challenging, despite impactful value propositions and promising ROIs. Meanwhile, options for funding are expanding, creating a dizzying array of options for the entrepreneur. In this workshop, you’ll work with two experienced social enterprise funding advisors to get your efforts “game ready” for funding. You’ll learn how to package your venture to successfully raise the funds you need… and from the right type of capital source.
Fundamental Global | Some Investors Wonder if Mellon Financial Is Being All I...Fundamental Global
Mellon Financial has in recent years undergone a makeover, transforming itself from a slow-growing mid-Atlantic bank into an asset management giant.
Over the last six years, it has shed its consumer banking businesses and grown its money management units, which rake in hefty fees. But some say that Mellon remains one of the banking industry's ugly ducklings still waiting to blossom.
Transcript: Alternatives for a Distressed Company in Apparel and RetailExpert Webcast
The discussion includes the process of bidding for, financing and acquiring distressed companies in the Apparel and Retail space is competitive and complex. The panel addressed the strategies and tips for success from the perspectives of an investment banker, a deal and bankruptcy lawyer, a turnaround executive, a lender and a tax accountant.
Business Breakups (Series: Common Commercial Conflicts)Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/business-breakups-2019/
The Very Basics: Forming the Business (Series: The Start-Up/Forming the Busin...Financial Poise
So, you are an entrepreneur and want to start your own business (or you are an attorney, accountant, or other professional advisor working with one). One of the first decisions required is to choose a legal structure for the business and the jurisdiction of entity organization. What factors should be taken into consideration prior to selecting a legal structure and jurisdiction? Does a sole proprietorship, partnership, limited liability company or corporation (C- or S-corp) make the most sense? This webinar focuses on business formation and the pros and cons to the different legal structures, and includes tips on how to keep one’s personal assets safe from the claims of future creditors of the business.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/the-very-basics-forming-the-business-2021/
The process of getting your business in shape to get the funds needed for its operations does not have to be painful. Learn some tips to make the process easier!
Keller Williams Realty emphasizes associate leadership and the importance of individual real estate businesses. We believe we must remain flexible and innovative in the face of an evolving market and an increasingly Internet-empowered clientele. This slide show explains a little about our business model and our unique value proposition. Thanks for taking the time to check it out.
Business Entities: classify, understand, choose, and manage.Berkman Solutions
Business entities are essential for starting, managing, and growing your business. This guides to business entities covers every major type, core concepts, criteria for choosing an entity, and legal entity management.
“Business entity” is a generic term with no legal significance per se. A business entity simply refers to the form of incorporation for a business. When a business incorporates, the law recognizes the business as a distinct entity which can enter contracts and acquire property among other rights and privileges.
There are, of course, some exceptions like sole proprietorships and general partnerships, which do not require incorporation. They also do not have the same right and privileges as incorporated legal entities.
There are four broad groups of business entities: limited liability companies, corporations, partnerships, and sole proprietorships. There are important flavors of each class of business entity.
Roddy Boyd, founder of the Southern Investigative Reporting Foundation, presented a one-hour "Detecting Corporate Fraud" session during SABEW's Spring Conference, March 29, 2014. Sponsored by the Donald W. Reynolds National Center for Business Journalism, the training focused on using SEC filings and other corporate disclosures to identify investigative stories.
For more information about training for business journalists, please visit http://businessjournalism.org.
When he took the helm at a Chicago-based law firm called Kirkland & Ellis in 2010, with the aim of turning it into a world-beater, few in the industry thought Jeff Hammes stood a chance.
For decades, the most lucrative and prestigious careers for ambitious young lawyers were to be found at the “white shoe” set of leading New York firms — long-established, fed by the best Ivy League graduates and nourished by work for Wall Streetʼs all-powerful banks and Fortune 500 companies.
The Opening Bell - Disclosure Dilemma Part IIGus Okwu
Please find attached our weekly column, The Opening Bell. We value your feedback and opinion. So, please feel free to contact us with any questions and thoughts. Please send us a short email if you would like to be removed from the distribution list. Thanks for your interest and enjoy your weekend.
Talk originally given at FISL 2012 in Porto Alegre, Brazil. Video was on YouTube but regrettably taken down. Fortunately, I gave a slightly updated (and frankly, tighter and better produced) version of this at the Liferay Symposium in the fall of 2012: https://www.youtube.com/watch?v=Pm8P4oCIY3g
The strength of your community is the best predictor of your project’s long-term viability. What happens when your community is gradually infiltrated by assholes, who infect everyone else with their constant negativity and personal attacks? This talk will teach you about the dramatic impact assholes are having on your organization today and will show you how you can begin to repair it.
Business Breakups (Series: Common Commercial Conflicts)Financial Poise
As any entrepreneur will attest, starting and operating a business comes with unique challenges. These challenges are a key reason that, by some estimates, half of the companies that are founded today will not exist four years from now. It can be argued that the effort and attention needed to find success precludes business owners from planning for failure. This webinar focuses on the realities of a failing business from the owners’ perspective. Join our panel of experts as they discuss the various considerations that should be given at the outset of start-up negotiations and through business breakup, including dispute negotiation and litigation.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/business-breakups-2019/
The Very Basics: Forming the Business (Series: The Start-Up/Forming the Busin...Financial Poise
So, you are an entrepreneur and want to start your own business (or you are an attorney, accountant, or other professional advisor working with one). One of the first decisions required is to choose a legal structure for the business and the jurisdiction of entity organization. What factors should be taken into consideration prior to selecting a legal structure and jurisdiction? Does a sole proprietorship, partnership, limited liability company or corporation (C- or S-corp) make the most sense? This webinar focuses on business formation and the pros and cons to the different legal structures, and includes tips on how to keep one’s personal assets safe from the claims of future creditors of the business.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/the-very-basics-forming-the-business-2021/
The process of getting your business in shape to get the funds needed for its operations does not have to be painful. Learn some tips to make the process easier!
Keller Williams Realty emphasizes associate leadership and the importance of individual real estate businesses. We believe we must remain flexible and innovative in the face of an evolving market and an increasingly Internet-empowered clientele. This slide show explains a little about our business model and our unique value proposition. Thanks for taking the time to check it out.
Business Entities: classify, understand, choose, and manage.Berkman Solutions
Business entities are essential for starting, managing, and growing your business. This guides to business entities covers every major type, core concepts, criteria for choosing an entity, and legal entity management.
“Business entity” is a generic term with no legal significance per se. A business entity simply refers to the form of incorporation for a business. When a business incorporates, the law recognizes the business as a distinct entity which can enter contracts and acquire property among other rights and privileges.
There are, of course, some exceptions like sole proprietorships and general partnerships, which do not require incorporation. They also do not have the same right and privileges as incorporated legal entities.
There are four broad groups of business entities: limited liability companies, corporations, partnerships, and sole proprietorships. There are important flavors of each class of business entity.
Roddy Boyd, founder of the Southern Investigative Reporting Foundation, presented a one-hour "Detecting Corporate Fraud" session during SABEW's Spring Conference, March 29, 2014. Sponsored by the Donald W. Reynolds National Center for Business Journalism, the training focused on using SEC filings and other corporate disclosures to identify investigative stories.
For more information about training for business journalists, please visit http://businessjournalism.org.
When he took the helm at a Chicago-based law firm called Kirkland & Ellis in 2010, with the aim of turning it into a world-beater, few in the industry thought Jeff Hammes stood a chance.
For decades, the most lucrative and prestigious careers for ambitious young lawyers were to be found at the “white shoe” set of leading New York firms — long-established, fed by the best Ivy League graduates and nourished by work for Wall Streetʼs all-powerful banks and Fortune 500 companies.
The Opening Bell - Disclosure Dilemma Part IIGus Okwu
Please find attached our weekly column, The Opening Bell. We value your feedback and opinion. So, please feel free to contact us with any questions and thoughts. Please send us a short email if you would like to be removed from the distribution list. Thanks for your interest and enjoy your weekend.
Talk originally given at FISL 2012 in Porto Alegre, Brazil. Video was on YouTube but regrettably taken down. Fortunately, I gave a slightly updated (and frankly, tighter and better produced) version of this at the Liferay Symposium in the fall of 2012: https://www.youtube.com/watch?v=Pm8P4oCIY3g
The strength of your community is the best predictor of your project’s long-term viability. What happens when your community is gradually infiltrated by assholes, who infect everyone else with their constant negativity and personal attacks? This talk will teach you about the dramatic impact assholes are having on your organization today and will show you how you can begin to repair it.
Database Scalability - The Shard ConflictScaleBase
This presentation tackles a particularly challenging situation that often occurs when creating a distributed relational database.
In this presentation you will learn:
- What a ‘shard conflict’ is
- How to identify ‘shard conflicts’
- How to resolve ‘shard conflicts’ in a distributed database
- How ‘shard conflicts’ affect query processing
Running Secure Server Software on Insecure Hardware Without ParachuteCloudflare
In today’s world, you may not know if the hardware you are running software on is secure or not. How can you ensure that, regardless of the hardware security, the software stays protected? CloudFlare’s systems engineer, Nick Sullivan shares advanced techniques on how to protect your server software. These techniques include anti-reverse engineering methods, secure key management and designing a system for renewal.
How Your Startup Can Raise Venture Capital in the COVID-19 Eraideatoipo
This presentation will cover some of the key topics that you will need think about as you prepare your startup for venture capital funding.
The speaker will address the following and provide context for the COVID-19 era:
1) Should you be raising money from venture capital investors yet, or does it make sense to seek more angel/friends and family financing to allow you to better succeed when you seek venture capital funding?
2) What kinds of marketing documents will you need?
3) Do you have a compelling team, including the right advisors?
4) Who are your targets?
5) Is your pitch and presentation ready for a prime time audience?
6) Can you effectively answer the questions you will face?
7) Is your company prepared for legal due diligence?
The speaker, veteran startup and corporate attorney Greg Chin of Duane Morris LLP, has seen hundreds of startups succeed and fail.
Greg will address these issues and more!
Funding options early stage companies april30 v2-lsn.pptx
Are you thinking about what you need to fund your company? Where do you start?
Funding is not one size fits all. Every company has to approach their pathway to funding with a unique approach. Join our fundraising experts for an in depth discussion of what options you have for funding and how to decide which paths are right for you and your company.
Topics covered will include investment criteria, time to closing, investment range, success rates, control features, compliance requirements and the overall costs of capital from each such source.
www.thecapitalnetwork.org
Startup Basics: How to Split the Pie, Raise Money and Reward ContributorsRoger Royse
What’s my startup worth? How much equity should founders have? How much equity should I give to employees and consultants? How much should I give the VC’s?
Silicon Valley startup attorney Roger Royse of the Royse Law Firm discusses the basic valuation and ownership issues involved in a startup’s life, from formation to financing to exit, including how to value your company and the contributions of stakeholders and investors at each step with a particular emphasis on different models, best practices and traps to avoid.
Funding Options at Harvard iLab
Are you thinking about what you need to fund your company? Where do you start? Funding is not one size fits all. Every company has to approach their pathway to funding with a unique approach. Join our fundraising experts for an in depth discussion of what options you have for funding and how to decide which paths are right for you and your company. Topics covered will include investment criteria, time to closing, investment range, success rates, control features, compliance requirements and the overall costs of capital from each such source.
www.thecapitalnetwork.org
How to Split the Pie, Raise Money, and Reward Contributors (Idea To IPO)Roger Royse
What’s my startup worth? How much equity should founders have? How much equity should I give to employees and consultants? How much should I give to the venture capitalists?
Silicon Valley startup attorney Roger Royse of the Royse Law Firm discusses the basic valuation and ownership issues involved in a startup’s life, from formation to financing to exit, including how to value your company and the contributions of stakeholders and investors at each step with a particular emphasis on different models, best practices and traps to avoid.
Get funded Expert Advice from the People Who KnowIntelligent_ly
When it comes to startups, SVB has been around the block. Many times. They've helped countless founders and CEOs negotiate the ups and downs of startup financing.
Confused about the how to choose the right funding strategy? Don't be.
On November 12th, SVB’s Dan Allred and Smith Anderson will break it down for you. They'll introduce five of the most important and popular avenues for startup funding:
Bootstrapping
Crowdfunding
Angel Investors
Venture Capital
Debt
Learn what can you do to stay a step ahead of fraudsters without limiting revenue growth. Prevent Financial Fraud in your organization with the help of HLB HAMT
As a B2B software investor, we like to support the startup community with knowledge and content. We hosted a Q&A on fundraising & cash planning amidst Covid19.
Data journalist Steve Doig, the Knight Chair at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication, demonstrates 10 data sources you may never have heard of that can lend rich context to your business and economic stories and spark meaningful investigations.
“Developing an Effective Business Journalism Syllabus - Leverage! Using Existing Resources to Create a Killer Course" from Reynolds Business Journalism Week 2016 by Keith Herndon
“Marketing Your Work and Engaging Your Audience - Engaging Audiences to Promote Your Work” from Reynolds Business Journalism Week 2016 by Rebecca Blatt
Christina Leonard, Director of Reynolds Business Reporting Bureau at the Walter Cronkite School of Journalism and Mass Communication shared 30 Agriculture stories at this year's Ag Media Summit. Take a look at these 30 examples of unique agriculture coverage to help end your writer's block!
Pulitzer Prize winner, Michael J. Berens of The Seattle Times presents "Data Journalism 101," a three-hour, hands-on workshop for the Donald W. Reynolds National Center for Business Journalism at the Excellence in Journalism Conference in Nashville, Tenn. on Sept. 4, 2014.
Part 3 offers tips for creating your own databases.
For more business journalism training opportunities and resources, please visit http://businessjournalism.org.
More from Reynolds Center for Business Journalism (20)
Want to move your career forward? Looking to build your leadership skills while helping others learn, grow, and improve their skills? Seeking someone who can guide you in achieving these goals?
You can accomplish this through a mentoring partnership. Learn more about the PMISSC Mentoring Program, where you’ll discover the incredible benefits of becoming a mentor or mentee. This program is designed to foster professional growth, enhance skills, and build a strong network within the project management community. Whether you're looking to share your expertise or seeking guidance to advance your career, the PMI Mentoring Program offers valuable opportunities for personal and professional development.
Watch this to learn:
* Overview of the PMISSC Mentoring Program: Mission, vision, and objectives.
* Benefits for Volunteer Mentors: Professional development, networking, personal satisfaction, and recognition.
* Advantages for Mentees: Career advancement, skill development, networking, and confidence building.
* Program Structure and Expectations: Mentor-mentee matching process, program phases, and time commitment.
* Success Stories and Testimonials: Inspiring examples from past participants.
* How to Get Involved: Steps to participate and resources available for support throughout the program.
Learn how you can make a difference in the project management community and take the next step in your professional journey.
About Hector Del Castillo
Hector is VP of Professional Development at the PMI Silver Spring Chapter, and CEO of Bold PM. He's a mid-market growth product executive and changemaker. He works with mid-market product-driven software executives to solve their biggest growth problems. He scales product growth, optimizes ops and builds loyal customers. He has reduced customer churn 33%, and boosted sales 47% for clients. He makes a significant impact by building and launching world-changing AI-powered products. If you're looking for an engaging and inspiring speaker to spark creativity and innovation within your organization, set up an appointment to discuss your specific needs and identify a suitable topic to inspire your audience at your next corporate conference, symposium, executive summit, or planning retreat.
About PMI Silver Spring Chapter
We are a branch of the Project Management Institute. We offer a platform for project management professionals in Silver Spring, MD, and the DC/Baltimore metro area. Monthly meetings facilitate networking, knowledge sharing, and professional development. For event details, visit pmissc.org.
Resumes, Cover Letters, and Applying OnlineBruce Bennett
This webinar showcases resume styles and the elements that go into building your resume. Every job application requires unique skills, and this session will show you how to improve your resume to match the jobs to which you are applying. Additionally, we will discuss cover letters and learn about ideas to include. Every job application requires unique skills so learn ways to give you the best chance of success when applying for a new position. Learn how to take advantage of all the features when uploading a job application to a company’s applicant tracking system.
The Impact of Artificial Intelligence on Modern Society.pdfssuser3e63fc
Just a game Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?
New Explore Careers and College Majors 2024.pdfDr. Mary Askew
Explore Careers and College Majors is a new online, interactive, self-guided career, major and college planning system.
The career system works on all devices!
For more Information, go to https://bit.ly/3SW5w8W
Exploring Career Paths in Cybersecurity for Technical CommunicatorsBen Woelk, CISSP, CPTC
Brief overview of career options in cybersecurity for technical communicators. Includes discussion of my career path, certification options, NICE and NIST resources.
Detecting Corporate Fraud: Tips from a Crook and a Sleuth by Roddy Boyd and Sam E. Antar
1. Title
Slide
Detecting Corporate Fraud
Roddy Boyd, founder
Southern Investigative Reporting
Foundation
Sam Antar, Convicted Felon
Former Crazy Eddie CFO and CPA
IRE Conference June 25, 2014
3. Title
Slide
Convicted felon, former CPA, and former
CFO of Crazy Eddie. Teaches law
enforcement, professional organizations,
businesses, and colleges and universities
about white-collar crime and how to catch
the crooks. Assists law firms on fraud
cases.
Sam Antar
Twitter: @samantar
Email: sam@whitecollarfraud.com
5. Title
Slide“It Pays To Do it, It’s Easy To Do and It’s
Unlikely They Will Be Caught.”
Source: Howard Schilit, Financial Shenanigans, 2002
Why Do Companies Lie To
Investors?
6. Title
Slide100% of All Financial Crime Violates This Precept
Common Sense: The First
Rule of Financial Fraud
Detection
7. Title
Slide—Merrill & Law of Large Numbers: http://tinyurl.com/mmt4snz
—AOL’s Miracle Growth: http://tinyurl.com/kd78vjg
—Brookfield’s “Paper”$: http://tinyurl.com/m5vd5kz
Common Sense “Cheats”
8. 8
Caveat reporter
• No one red flag always indicates fraud.
• Not every example that raises eyebrows
amounts to fraud.
• Michelle Leder’s “mosaic”
principle.
• Talk to the company.
Image: Rutger van Waveren, http://flic.kr/p/bfBSC
9. Who’s Who: What to look for
Check it out
•Education, especially:
• Specialized degrees/expertise
• Attendance vs. degree
• Diploma mills & dubious online
schools
•Litigation
• Corporate
• Personal
• Professional
Photo by Flickr user un.sospiro
10. 19
Who’s Who: What to look for
Don’t forget the help
•Lawyers
•PR firms
•Consultants
•Exceptions?
• Crisis PR firms
• Defense lawyers
• etc.
Scenario: Ditching the troubled founder
•Really?
•Relatives & associates
•LLCs
The blame game
Pinning operational problems on others
•Short-sellers
•The media (that’s us)
•Regulators
11. Who’s Who: Next steps
Who to background
•Executives
•Directors
•Major investors
•Lawyers
•PR people
•Consultants (especially in technical industries)
•LLCs & similar entities
•Reynolds Center on backgrounding people & businesses:
http://bit.ly/1js5XOJ
13. Ties: What to look for
• Commodity transactions
• Why is the insider the best choice?
• Confusion, dead-ends, obfuscation
• Layers of LLCs or other private companies
• Especially if they tie back to the same
people
• Especially if those people are executives,
directors or big investors
Exceptions?
• Private-equity investors
• Founders & founding families
14. Ties: What to look for
Less worrisome (maybe):
•“The father of Mr. Dimon has been employed by the Firm as a
broker since 2009, and for 2012 received compensation of
$1,599,616, including annual salary, commissions, and an equity
award.” — JPMorgan Chase proxy (2013)
•Previously a broker for Bank of America
Still…
•That’s up from $447,000 in 2011.
15. Eliyahu “Eli” Weinstein
Sentenced to 22 Years in Prison for $200 Million Ponzi Scheme
“He also realized, authorities say, that pouring some of the money he swindled
back into local charities and religious organizations would help him maintain his
community standing and possibly help him secure future deals.”
Source: Jason Grant, The Star-Ledger, February 25, 2014
16. Ties that bind: Next steps
• Location, location, location
• Google
• State corporation filings
• Secretary of state, state
incorporation office, etc.
• Legal databases
• Court documents
Photo by Flickr user Daniel Moyle
17. Ties that bind: “Certain
Relationships”Exercise
• Nanoviricides http://tinyurl.com/lcwtg2s
• DHB Industries http://tinyurl.com/mbr73wc
18. Who’s Who: Buried treasure
“In December 2008, the Company purchased an extensive
collection of historical maps of the American Southwest from
[Chairman & CEO] McClendon for $12.1 million, which
represented his cost. A dealer who had assisted Mr. McClendon
in acquiring this collection over a period of six years advised the
Company that the replacement value of the collection in
December 2008 exceeded the purchase price by more than $8
million. The maps have been displayed at the Company’s
Oklahoma City headquarters for a number of years, during which
the Company has been insuring the maps in exchange for their
display. ... Our employees and visitors appreciate the maps …
The Company was interested in continuing to have use of the
map collection and believed it was not appropriate to continue to
rely on cost-free loans of artwork …” — 2009 proxy
19. • Background MicroStrategy CEO Michael Saylor
• Open proxy & calculate value of holdings
• Look at compensation structure
• Run keyword search: “aircraft,” “tax”
• “Insta-Enterprise”: http://tinyurl.com/olmo7qm
20. 9
Get a grip: The 10s
Primary financial and operational disclosures for established
public companies. http://tinyurl.com/4px4l
10-K
•Annual
•Audited
•Comprehensive
10-Q
•Quarterly (3x a year)
•Unaudited
•More incremental
Image: Heather, http://flic.kr/p/9rpM2p
21. 10
Get a grip: What to look for
• Frequent reshuffling
• Strategies
• Core products & services
• Restructuring
• Poor acknowledgement of costs or risks
• Repeated stock issuance (dilution)
• Unexplained & poorly explained capital raises
22. 11
Get a grip: What’s core?
Everyone knows General Electric
•Power turbines
•Jet engines
•Medical imaging
•Dishwashers
•Subprime debt?!
(http://tinyurl.com/opgcn3b)
•Today: $46B = 31%
23. 12
Get a grip: Go Wayback
InternetArchive.org
•(Almost) Nothing on the Internet ever dies
•Why no cure for AIDS & the common cold?
• http://tinyurl.com/mevqfww
24. 13
Measuring up: The filings
10-K
•Audited
•More comprehensive
•More history
10-Q
•Unaudited
•Narrower in focus
•Less history
Earnings release
•Heavy on the PR
•Compare to 10-K or 10-Q
S-1
•New companies
Other options
•Google Finance
•Yahoo! Finance
•Etc.
25. 14
Measuring up: Financials
The basics:
•Income statement
• Profit & loss
• Revenue (sales)
• Net income (earnings)
•Balance sheet
• Assets & liabilities
•Cash-flow
• Circulatory system
Other resources:
•Reynolds Center 10-Q financial basics: http://bit.ly/1jskFFp
•Mark Tatge’s “Funny Money: How companies play games with numbers”:
http://slidesha.re/1jsjG8c
26. Measuring up: Receivables
Accounts receivable
Money owed to the company, generally by customers
•Big swings
• in dollar terms
• as a percent of revenue
•Collectibility
•Concentration of risk
• Risk factors
•Footnotes
• Rising A/R should mean rising delinquencies, amounts
past due for 90+ days
• Or company may be hiding uncollectible sales
• Overstatement of revenues
27. Measuring up: Inventories
Inventory:
Raw materials, work-in-process goods and completely finished goods
held for sale
•Big swings
• in dollar terms
• as a percent of cost of goods sold
•Risk of write-down in valuation due to obsolescence
•Footnotes
• Rising inventories could mean increased risk of unsaleable
goods and eventual write-down or inflation of inventory to
overstate profits
28. Measuring up: Payables
Accounts payable
Money the company owes, generally to
suppliers
•Profitable company with rapidly increasing
A/P
• Implies the company may not be
paying its bills
• The opposite can imply that a
company is understating liabilities
Photo by Flickr user 401(k) 2012
29. Measuring up: Arthrocare
• ArthroCare Spine segment revenues (Sept. 30 quarter)
• to $11.4 million from $5.9 million
• to 15.1% of sales from 9.4%
• Extremely competitive market for spinal devices
• Competitors are bigger and well funded
• Johnson & Johnson, Stryker
• Kickback allegations
• Channel stuffing
• Disclosure
30. Measuring up: Arthrocare
• Accused of “parking” millions of dollars in merchandise with
distributors
• to meet/beat forecasts
• booked $37 million in sales to one distributor
• but only $50,000 in net sales
History:
• Investors raised questions.
• Arthrocare bought the distributor.
• Over time, $400 million in stock losses
• Two former SVPs pleaded guilty to conspiracy to commit
securities and wire fraud in 2013.
• Executives convicted, await sentencing.
31. Measuring up: Receivables
Channel Stuffing
“A deceptive business practice used by a company to inflate its
sales and earnings figures by deliberately sending retailers along
its distribution channel more products than they are able to sell to
the public.” (Source: Investopedia)
Channel stuffing provides an immediate boost to revenues and
earnings. However, it results in a revenue shortfall in the following
period. To maintain the scheme, companies need to increase the
amount of channel stuffing by growing amounts growing amounts in
subsequent periods.
32. Measuring up: Receivables
How to you detect channel
stuffing?
The SEC has recognized that, “a growing
DSO figure is often a telltale sign that a
company’s receivables are impaired due to
channel stuffing.” (Source: SEC v Korkuc)
33. Measuring up: Receivables
Accounts receivable: If a company is taking longer periods of time to
collect on accounts receivable, it is a red flag for a possible revenue
overstatement
How long does it take a company to collect payments on accounts
receivable?
Days- Sales -Outstanding (DSO):
End of Quarter or Avg. Accounts Receivable X Number of Days in Period
Sales During Period
34. Measuring up: Receivables
What is DSO?
Days- Sales-Outstanding (DSO). It measures how long it takes a
company to collect on accounts receivable:
Accounts Receivable X Number of Days in Period
Sales During Period
Note: Can use end of period accounts receivable or average of
beginning and ending accounts receivable
35. Measuring up: Receivables
Why a rising DSO is a red flag?
As a company pushes more
unnecessary inventory into the
distribution channels, it becomes
harder and harder to collect revenue,
both because the company is forced
to offer increasingly generous credit
and collection terms to customers to
induce excess sales and because
distributors are themselves unable to
sell to end-customers, limiting their
ability to pay.
36. Measuring up: Receivables
Example:
“By allowing distributors to delay payment or
not pay their invoices in full, McAfee
accumulated on its balance sheet millions of
dollars of aging receivables. Consequently,
“days sales outstanding” (“DSO”) – the
average number of days that it takes a
company to collect its accounts receivable –
was directly affected.” – (Source: SEC v
McAfee)
37. Measuring up: Orthofix International N.V.
•Founded in 1980
•Operationally based in Lewisville, Texas
•Global medical device company with six offices
worldwide and an international distribution presence.
•Publicly traded on the NASDAQ exchange (stock
ticker “OFIX”)
•June 2012: Pleaded guilty to obstructing a federal
audit after it failed to disclose that it routinely falsified
Certificates of Medical Necessity
•July 2012: Agreed to a deferred prosecution
agreement regarding violations of Foreign Corrupt
Practices Act by Mexican subsidiary
38. Measuring up: Orthofix International N.V.
SEC Filings Reveal Red Flags - Rising DSO
Quarter
Ended:
Net DSO
Quarter
Ended:
Net DSO
Quarter
Ended:
Net
DSO
Quarter Ended: Net DSO
03/31/13 120.5
12/31/12 122.4 09/30/12 124.0 06/30/12 114.1 03/31/12 99.8
12/31/11 88.2 09/30/11 89.6 06/30/11 88.5 03/31/11 87.8
12/31/10 85.2 09/30/10 87.2 06/30/10 82.7 03/31/10 88.4
39. Measuring up: Orthofix International N.V.
“… certain revenues recognized during 2011 and 2012,
upon further evaluation, should not have been recognized
or should not have been recognized during the periods in
which they were recognized.” – (Source: 8-K, 08/06/13)
“The Company has received requests from the SEC
Enforcement Staff for documents and other information
concerning various accounting practices, internal controls
and business practices. Such requests cover the years
ended December 31, 2011 and 2012, and in some
instances, prior periods.” – (Source: 10-K report for 2013)
40. Measuring up: Inventories
Inventories: If a company is taking longer periods of sell
(turnover its inventory) it is a red flag for possible inventory
inflation or future write-downs due to obsolescence
How long does it take a company turnover its inventory?
Days-Sales-Inventory (DSI):
Average Inventory X Number of Days in Period
Cost of Sales During Period
Note: Average inventory is total of beginning and ending balances divided by 2
41. Crazy Eddie Inventory Fraud
Crazy Eddie inventory inflation: $3 million in 1985, $13 to $16 million in
1986, and $28.5 to $37 million in 1987
Source: Second set of books maintained by Sam E. Antar
42. Red Flags, But No One Listened
Then too, while we are at it, inventory
controls seem a wee bit casual, what
with the company not keeping records
based on product groups. The
company “believes” that television and
video products account for the largest
percentage of sales. Oh, by the way,
Crazy’s shopping around for a new
chief financial officer. (Source: Not-So-
Crazy Eddie: Hard-Sell Retailer Going
Public, by Gigi Mohan, Barron's
National Business and Financial Jun 4,
1984)
43. Red Flags, But No One Listened
And so it was that Mr. O'glove had never met, much less been charmed by, the fast-
talking chief of Crazy Eddie. In fall 1986, he noticed that for the fiscal half ended
Aug. 31, Crazy Eddie's sales had risen 41%, while inventories had mushroomed
147%. Previously, sales and inventories had generally moved in unison.
"It was obvious to me that the company was having big problems despite other
sanguine analyses on Wall Street," he said in a 1987 interview. Mr. O'glove is
generally credited with being the first to sense trouble at Crazy Eddie.
In hindsight, his suspicions seem almost naive. According to allegations in lawsuits
filed by shareholders and by current management, those bloated inventory figures in
fall 1986 were reflections of nothing less than a scheme to defraud Crazy Eddie and its
shareholders. (Source: Calculated Madness: The Rise and Fall of Crazy Eddie Antar,
by Gary Belsky and Phyllis Furman, Crain’s New York Business, June 5, 1989)
44. Finding fraud: Compare the footnotes
Crazy Eddie changed one word in footnotes to overstate income by $20 million
Annual Report Fiscal year 1986:
"Purchase discounts and trade allowances are recognized when received."
Discounts and trade allowances were not recognized until a credit memo was received from a
vendor even if the discount was earned.
Annual Report Fiscal year 1987:
"Purchase discounts and trade allowances are recognized when earned."
Crazy Eddie immediately recognized discounts and trade allowances when earned.
Change in policy enabled Crazy Eddie to recognize discounts and trade allowances faster and
inflate income by booking $20 million in fictitious charges to vendors.
45. Finding fraud: Compare the numbers
Sharp drop in accounts payable to inventory ratio resulting from
phony discounts and trade allowances booked by Crazy Eddie
46. Measuring Up: Overstock.com
Always check what they say against what they disclose
BYRNE: We're profitable.
BUTTNER: Your real, honest-to-goodness profit, not pro
forma?
BYRNE: None of that stuff.
(Source: Your World with Neil Cavuto, December 11, 2001)
47. Measuring Up: Overstock.com
Overstock was never profitable
We have a history of losses and we may continue to incur operating and net
losses for the foreseeable future. We incurred net losses of $13.8 million in the
fiscal year ended December 31, 2001. As of December 31, 2001, our
accumulated deficit was $44.1 million. We will need to generate significant
revenues to achieve and maintain profitability, and we may not be able to do so.
Even if we do achieve profitability, we may not be able to sustain or increase
profitability on a quarterly or annual basis in the future. If our revenues grow
more slowly than we anticipate, or if our operating expenses exceed our
expectations, our financial results would be severely harmed.
Source: Overstock.com S-1 filed on March 5, 2002
48. Measuring Up: Overstock.com
Always check what they do against what they said
"…I think 'EBITDA' is the stupidest thing I ever heard
emanate from Wall Street (no small feat)....“
Source: Email to Tim Mullaney from Business Week,
January 10, 2006
From Q2 2007 to Q2 2008, started reporting EBITBA, but
used the wrong calculation (Source: Various 8-K, 10-Q, and
10-K reports filed with the SEC)
49. Measuring Up: Overstock.com
What is EBITDA?
The acronym EBITDA refers specifically to earnings before interest, tax,
depreciation and amortization. (Source: SEC Comment Letter to CGG
Veritas)
"Earnings" means net income as presented in the statement of operations
under GAAP. (Source: SEC Compliance and Disclosure Interpretations)
Overstock.com’s EBITDA calculation
Our measure of “EBITDA” is a non-GAAP financial measure. EBITDA, which
we reconcile to “Operating loss” in our income statement, is earnings before
interest, taxes, depreciation, amortization and stock-based compensation.
(Source: Various Overstock.com 10-Q and 10-K reports)
51. Measuring Up: Overstock.com
Always check what they disclose against the rules:
In Q4 2008, Overstock.com reported a $1.014 million net profit.
“After a tough three years, returning to GAAP profitability
is a relief.” ~ CEO Patrick Byrne (Source: Press release
01/30/09)
Earnings call after press release:
“This included a one-time gain of $1.8 million relating to
payments from partners who were under-billed earlier in the
year.” ~ CFO Steve Chesnut (Source: Transcript)
52. Measuring Up: Overstock.com
The rules
Under GAAP, we are required to use an accrual basis of
accounting.
Income is recognized when it is earned and not when it is later
billed or when amounts are collected.
The “one-time gain of $1.8 million relating to payments from
partners who were under-billed earlier in the year” was
earned before Q4 2008 and should have been recognized in prior
periods.
Since the accounting error is material under SAB No. 99,
Overstock.com is required to restate prior period financial reports
under SFAS No. 154 and cannot use a “one-time gain” to correct
its error. – (Source: White Collar Fraud, 02/04/09)
54. Measuring up: Form 4
Always read the explanations very carefully
On 12/21/11, Robert Pedersen, CEO ZAGG, sold 345,200 shares at an average
price of $7.5248 per share:
Explanation of Responses:
1. The shares were sold to meet an immediate financial obligation.
Question: What is an immediate financial obligation?
Source: Form 4 filed on 12/23/11
55. Measuring up: Form 4
Stock Pledges are required to be disclosed in proxy reports
Item 403 -- Security Ownership of Certain Beneficial Owners and
Management
(b) (3), indicate, by footnote or otherwise, the amount of shares that are
pledged as security
Source: Securities Lawyer’s Deskbook
56. Measuring up: Form 4
August 14, 2012, Robert Pedersen sold 515,500 shares at an average price of
$8.22 per share
Explanation of Responses:
1.The shares were sold to meet margin calls on the Reporting Person's
account.
Source: Form 4 filed 08/17/12
On August 17, 2012, Pedersen “resigned in order to focus on his family, his church
and a family foundation.”
Source: CEO of Utah’s ZAGG quits unexpectedly, Salt Lake Tribune 08/17/12
57. Measuring up: Form 4
On August 28, 2012, Zagg held a conference call with investors and admitted:
…departure was entirely related to the margin calls situation that started last
December and unfortunately surfaced again two weeks ago.
Question: If Zagg knew about Pedersen’s stock pledges and margin calls in
December 2011, when didn’t the stock pledge in a proxy report filed on April 27,
2012?
58. Measuring up: Form 4
SEC investigating ZAGG and Pedersen:
“In the fourth quarter of 2012, the Company received requests to provide documentation
and information to the staff of the SEC in connection with a non-public investigation
being conducted by the SEC’s Salt Lake City office. The Company believes the
investigation includes a review of the facts and circumstances surrounding some of the
same issues raised by the plaintiffs in the above lawsuits; specifically, whether the
Company failed to disclose Mr. Pedersen's margin account sales or the alleged
existence of a plan to have Mr. Hales succeed Mr. Pedersen as the Company’s CEO. The
Company responded to these requests and is cooperating fully with the staff. The
Company has chosen to disclose this non-public investigation due to the highly public
nature of the lawsuits described above, which the Company intends to defend vigorously.””
Source: Zagg 10-Q report for quarter ended 03/31/14
59. Measuring Up: Warranty Reserves
A warranty reserve as a liability account is set up to measure expected
warranty claims arising from current sales.
•Beginning Balance
•Provision for Warranty Expense (Increases the Reserve Account and
Reduces Current Period Income)
•Warranty Usage (Reduces Warranty Reserve Account and cash or
accounts receivable – no effect on income)
•Ending Balance
If a company “overestimates” its reserve in one period, it can create illusory
profits in a future period to “correct” the overstatement.
62. Red flags: Director departures
• Sudden resignations
• http://tinyurl.com/m9stmt7 and http://tinyurl.com/ld3yssk
• Detailed complaint letters
• Accounting problems
• Regulatory inquiries
• Board cliques
• Companies sometimes file
responses
63. Red flags: Auditor oddities
• Big company, small auditor
• Audit vs. consulting fees
• Sudden departures
64. Red flags: Next steps
• PCAOB (Public Company Accounting Oversight Board)
• http://pcaobus.org
• Audits the auditors
• Insight into an accounting firm’s quality
• Audit clients usually not named
• Always call departing directors
• Especially if there’s a letter
• Short interest
• If many investors are selling the shares short, why?
• Talk to investors, bullish and bearish.
66. Do audits really protect investors?
No Transparency
•The audit engagement partner’s name is not identified in audit reports.
The accounting firm signs the audit report.
•The CEO and CFO of a public company signs the financial reports.
•Neither the company in question nor audit engagement partner are
identified in PCAOB Inspection Reports.
67. Do audits really protect investors?
Puda Coal
The issue, Judge Katherine B. Forrest of Federal District Court in Manhattan stated
in an opinion filed on Tuesday, was not whether the auditor could have done a
better job, but whether “a reasonable auditor would have” checked the records that
showed a fraud had been committed. “
Could more have been done? Clearly yes,” the judge wrote. “Did more need to be
done, and would auditors conducting a P.C.A.O.B.-compliant audit have done
more? Neither the court nor any reasonable juror at a trial has any way to answer
this question.” (Source: Auditor Moore Stephens Said Not at Fault; Puda Coal
Investor Suit Is Dismissed by Floyd Norris, New York Time, June 19, 2014)
68. Shabby Audits: Autonomy
History:
•October 2011: HP acquires Autonomy for $11.1 billion
•November 2012: HP announced a non-cash
impairment charge of $8.8 billion related to Autonomy
($5 billion linked to serious accounting improprieties)
HP investigation concluded:
•Autonomy made 80% less profits and 54% less
revenues than originally reported
69. Blind Reliance on 2 Audit Firms
The technology giant said that an internal investigation had revealed "serious
accounting improprieties" and "outright misrepresentations" in connection with
U.K. software maker Autonomy, which H-P acquired for $11.1 billion in October
2011.
"There appears to have been a willful sustained effort" to inflate Autonomy's
revenue and profitability, said Chief Executive Meg Whitman. "This was
designed to be hidden.“
Ms. Whitman said Tuesday the company relied on Autonomy's regular
auditor Deloitte and had hired KPMG for an additional review before the
deal closed. (Source: H-P Says It Was Duped, Takes $8.8 Billion Charge, by
Ben Worthen, Wall Street Journal, 11/20/12)
70. How is most fraud discovered?
Source: Association of Certified Fraud Examiners, Report to the Nations
71. Who are the Whistleblowers?
XXX’s:
1. Ex-lovers: Divorced spouses, former girlfriends and boyfriends.
2. Ex-business associates: Former customers and vendors
3. Ex-employees: Fired employees, laid off employees, and
employees who quit working for the entity.
Beware: Most whistleblowers are not motivated by altruism. They
have axes to grind. They come forward because of their personal
agendas.
72. Beware: Most White-Collar Criminal Are Invisible
Source: Association of Certified Fraud Examiners, Report to the Nations 2012
73. Slump in FBI White Collar Crime Prosecutions
Source:
Transactional Records
Access Clearinghouse
(TRAC)
74. Slump in FBI White Collar Crime Prosecutions
Source:
Transactional Records
Access Clearinghouse
(TRAC)
76. The Most Creative Dumbasses
In The Room
Enron’s 1996 Revenues: $13.2 Billion
Enron’s 1999 Revenues: $40.1 Billion
Enron’s 2000 Revenues: $101 Billion
77. Worldcom: Buying your way into jail
Multiple Acquisitions Hide No Organic Growth
Free Cash Flow Tells Real Story
Source: Financial Shenanigans, Howard Schilit