Legal issues

Buffet Faces Questioning in AIG Flap

The nation's second wealthiest man, billionaire investor Warren Buffet, has indicated he will cooperate in the investigation into a deal made by one of his companies, but claims he was never briefed on the details of the deal, according to his company Berkshire Hathaway Inc.Executives of both Berkshire Hathaway and its insurance arm, General Reinsurance, have "voluntarily given interviews" with investigating authorities, and Buffett himself will do so "shortly," the company's statement said.
Tax

Fannie Mae Facing Another Class Action Lawsuit

On Friday, March 24, 2005, a class action lawsuit was filed against Fannie Mae in the District of Columbia federal court. Attorneys from the Law Office of Frank J. Johnson filed the complaint on behalf of traders in Fannie Mae stock options against the mortgage giant.The complaint alleges Fannie Mae and its top executives misrepresented or failed to disclose the troubled company’s true financial condition in public statements between April, 2001 and September, 2004.
Tax

IRS and States Collect from Son of Boss

The IRS announced on Friday that more than $3.2 billion has been collected in the biggest ever crackdown on improper tax shelters. In addition, the states of Arizona, Illinois, Maine, Michigan, New York, Ohio, Utah, and Virginia have collected more the $23.5 million in voluntary state tax return amendments.The $3.2 billion has been collected from 1,165 taxpayers participating in the “Son of Boss” tax shelter settlement.
Practice Management

Boston Accounting Firm Split Ends Up in Court

A partner who left his Boston accounting firm to join another is now suing his former partners, saying they wrongly spent hundreds of thousands of dollars.Scott Kanter, formerly of Kanter Troy Orleans & Wexler LLP, left the firm last August and, along with 10 others, joined Brown & Brown LLP, also based in Boston. Two months later, his former partners merged with competitor DiCicco, Gulman & Co., the Boston Business Journal reported.Kanter, in a complaint filed March 10, says that he notified his partners on Aug.
Tax

IRS Continues to Seek NAACP Speech Documents

Did the NAACP's chairman violate nonprofit rules by criticizing President Bush in a speech last year?
Tax

FDIC Wants Banks to Notify Customers of Identity Theft

On Friday, March 18, 2005, regulators at the Federal Deposit Insurance Corp. (FDIC) voted 5-0 to approve a ruling that would force U.S.
Tax

SEC Charges Time Warner with Fraud

The Securities and Exchange Commission this week charged Time Warner Inc. (formerly known as AOL Time Warner) with materially overstating online advertising revenue and the number of its Internet subscribers, and with aiding and abetting three other securities frauds. The Commission also charged that the company violated a Commission cease-and-desist order issued against America Online, Inc. on May 15, 2000. In a separate administrative proceeding, the Commission charged Time Warner CFO Wayne H. Pace, Controller James W.
Tax

Board Members Pay to Settle WorldCom Suit

In a settlement that has sent shock waves through corporate boardrooms, 11 former WorldCom Inc. board members have agreed to pay $20.2 million of their own money to settle a lawsuit tied to the company's $11 billion accounting fraud.The Wall Street Journal reported that the settlement, once sidelined by a legal technicality, was reached on Friday.It is highly unusual for board members to have to tap into their own resources to pay settlements such as this, and the WorldCom settlement, first announced in January, shocked many corporate boards.
Community News

Bankrupt Airline Sues Ernst & Young for Accounting Fraud

Ernst & Young defrauded creditors of bankrupt airline Tower Air by helping the airline inflate profits and understate losses, a lawsuit claims.The creditors, who are seeking more than $380 million in damages, allege that the auditors hid the airline's debts and improper business practices, formed a too-close relationship with the CEO and destroyed evidence in the case, the Baltimore Business Journal reported.The creditors include Fleet Business Credit, General Electric, the Port Authority of New York and New Jersey, and Annapolis-based aviation firm ARINC.
A&A

Women Sue Small Business Administration Over Missed Goals

Upon viewing the disturbing results of a recent U.S. Women's Chamber of Commerce national survey of women business owners which found a remarkable 62 percent unable to access capital they need to be competitive -- despite their preparedness and available collateral --, the leaders of the USWCC decided to take dramatic action.To significantly increase access to capital for the more than 10 million women-owned businesses in the U.S., the USWCC announced a groundbreaking partnership with Newtek Small Business Finance.
Tax

Settling WorldCom Lawsuit Will Cost J.P. Morgan $2 Billion

J.P. Morgan Chase will pay $2 billion to settle a class-action investor lawsuit that alleges the bank failed to investigate WorldCom's financial health when it sold bonds just before the company imploded amid scandal.J.P. Morgan Chase is the last of 14 bond underwriters to settle the case, led by New York Comptroller Alan Hevesi, who oversees the New York State Common Retirement Fund.
Tax

Ebbers Found Guilty in Massive WorldCom Fraud Case

In a closing chapter in what has become the nation's largest accounting fraud, former WorldCom chief executive Bernard Ebbers was found guilty today on all counts, the Wall Street Journal reported.The verdicts were a major victory for Justice Department prosecutors who spent nearly three years investigating the $11 billion fraud that pushed the company into bankruptcy and decimated a stock that was once worth $100 billion. The company, now known as MCI, emerged from bankruptcy in 2004 and is courting acquisition offers from Verizon Communications Inc.
AccountingWEB Life

Federal Court Bars Three From Promoting 'Sham Trust' Tax Scam

The Justice Department announced last week that a federal court in Florida has permanently barred Fred J. Anderson and Deborah A. Martin, of Lehigh Acres, Florida; and Richard A. Walters, of Arlington, Texas, from promoting sham trust tax schemes or any other tax fraud scheme.The court also barred Martin, a tax return preparer, from preparing returns for customers that assert unrealistic positions. The court in January barred Tax Strategies, Inc., a company the three defendants ran, from promoting sham trust or other tax fraud schemes.
Tax

SEC Charges Two Former Buddies of ImClones' CEO With Insider Trading

The Securities and Exchange Commission today charged Zvi Fuks and Sabina Ben-Yehuda, two friends of the former CEO of ImClone Systems Inc., Samuel Waksal, with insider trading in ImClone securities in December 2001. The Commission charged that Ben-Yehuda and Fuks sold ImClone stock after receiving an illegal tip from Waksal just before the FDA denied approval of ImClone's cancer treatment drug.Fuks is the Chairman of the Department of Radiation Oncology at Memorial Sloan Kettering Hospital in New York, and in December 2001 was a member of the ImClone Scientific Advisory Board.
Tax

Chess Great Bobby Fischer Detained By Japan, Faces U.S. Tax Evasion Charges

As the U.S. builds a tax evasion case against chess great Bobby Fischer, the man himself sits in the Japanese detention center where he has been held for eight months after being caught trying to leave Japan on an invalid U.S. passport, the Associated Press reported.Japan ordered Fischer deported to the U.S. after the passport incident, in which he attempted to board a flight to the Philippines in July.As Fischer tries to fight his way out of Japan-Iceland has offered him a passport-the U.S.
Tax

Supreme Court: Tax Court Must Reveal Documents

The Supreme Court on Monday struck down a U.S. Tax Court practice that shields vital documents from participants in cases before the tax court as well as the federal judges who hear tax court appeals, the New York Times reported.In an unusual move, the Supreme Court overturned rulings of two federal appeals courts, the Seventh Circuit in Chicago and the 11th Circuit in Atlanta.
Tax

Washington State Trust Promoters Indicted for Tax Conspiracy

Eileen J. O’Connor, Assistant Attorney General for the Tax Division, United States Department of Justice and John L. McKay, United States Attorney for the Western District of Washington, announced this week that a federal grand jury in Seattle, Washington returned an indictment against David C. Stephenson and Michael J. Shanahan. The indictment charges the defendants with conspiring to defraud the United States by impeding and impairing the Internal Revenue Service in the ascertainment and collection of income taxes. The indictment also charges Mr.
Tax

Citigroup Reaches $75M Settlement on Global Crossing Suit

Citigroup on Wednesday announced it has settled class action litigation brought on behalf of purchasers of Global Crossing securities which was pending in the United States District Court for the Southern District of New York as In re Global Crossing Ltd. Securities Litigation, No. 02 Civ. 910 (GEL).
Tax

Merrill Lynch Loses $1 Million Court Case

Merrill Lynch, Pierce, Fenner & Smith, Inc. has been ordered by an arbitration panel of the National Association of Securities Dealers, Inc.
Community News

PwC, Partners Hit with Class-Action Pension Suit

A former PricewaterhouseCoopers LLC employee has instigated a class-action suit against the Big Four firm claiming unfair pension practices, Pension and Investments reported.The company, as well as its partners who oversee the pension and retirement plans, face a class-action lawsuit that contends they used the pension plans as tax shelters for well-off partners to the detriment of regular employees and the public.Pension and Investments reported that PwC's cash balance plan, with $1.4 billion in assets at the end of June 2003, and a 401(k) plan, with $1.6 billion in assets for the fisca

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