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Legal issues

Forensic Accounting: A Basic Guide to The Profession

By, Alan Zysman, B.Comm, CA·IFA, CFE - Forensic accounting has existed for many years. With the growing complexities of the business environment and the growing number of business related investigations, forensic accounting professionals are increasingly asked to assist in the investigation of financial and business related issues.What is Forensic Accounting? The integration of accounting, auditing and investigative skills yields the specialty known as forensic accounting.

Judge Allows Class Action Against Tyco, Strikes Down Another Suit

A federal judge has allowed a shareholder class action lawsuit against Tyco International Ltd. to proceed, but he rejected a related shareholder lawsuit.According to the Wall Street Journal, U.S.
Community News

Spitzer Takes on Marsh & McLennan for Bid-Rigging

New York State Attorney General Eliot Spitzer has filed suit against the nation's top insurance brokerage firm for allegedly directing clients to insurers that paid Marsh & McLennan Cos. handsomely for the business.Spitzer told Dow Jones Newswires that an investigation by his office revealed that Marsh & McLennan made it look as if the marketplace was competitive by soliciting fake bids.

Adelphia's Complex Bankruptcy: Claims Total $3 Trillion

It is what some are calling the most complicated bankruptcy case in history.

'Spyware' Under Attack by Government

By taking advantage of a hole in Microsoft's Internet Explorer web browser, hackers have been able to introduce “spyware” or “adware,” which is downloaded on to hard drives without owners' knowledge. The scourge causes countless “pop-up” ads to appear, driving many users away from their computers. But now, the government is cracking down.
Community News

KMPG Agrees to Pay $115M to Settle Lernout Lawsuit

Accounting firms KPMG Bedrijfsrevisoren of Belgium and KPMG LLP of the United States (together the "KPMG Defendants") have agreed to pay a total of $115 million to settle a shareholder lawsuit stemming from the collapse of Lernout & Hauspie Speech Products, N.V., a Belgian software company.

RS Investments Settles Market-Timing Probes for $25 Million

The Securities and Exchange Commission (SEC) has charged investment adviser RS Investment Management L.P., CEO G. Randall Hecht, and former CFO Steven M. Cohen with favoring certain mutual fund investors by allowing them to engage in frequent short-term trading (market timing). According to the Commission, RS entered into secret agreements that permitted select investors to generate millions of dollars in trading profits at the potential expense of other shareholders, and allowed RS to reap substantial advisory fees.

Consumer Loss from Phishing Fraud to Reach $500 Million

A recent national study conducted by Ponemon Institute and sponsored by TRUSTe, an online privacy nonprofit organization and NACHA, an electronic payments association, revealed that 76 percent of consumers are experiencing an increase in spoofing and phishing incidents and that 35 percent receive fake e-mails at least once a week.

Federal Court Stops Ohio Tax Promotions

The Justice Department announced on Wednesday that a federal court in Akron has entered an order barring James Binge and Terrence Bentivegna from promoting abusive tax schemes and preparing federal tax returns for others. Judge John R. Adams of the U.S. District Court for the Northern District of Ohio found that Binge and Bentivegna, who are from the Canton, Ohio area, sold sham trusts and prepared income tax returns for customers that hid income and claimed improper deductions.

Justice Dept. Sues to Halt Alleged Internet Tax Scam

Eariler this month the Justice Department asked a federal court in Atlanta to bar Jonathan D. Luman, of Lovejoy, Georgia, from selling an alleged tax scam via the Internet. According to the civil injunction complaint, Luman operates websites that sell bogus documents, including a manual known as the "Tax Buster Guide," containing forms which customers are told to submit to the IRS in lieu of tax returns. Luman allegedly told customers that the documents would allow them to reclaim their "sovereign citizen" status and eliminate liability for federal income taxes.

South Carolina Considers Restricting KPMG

South Carolina tax officials are considering barring KPMG from representing taxpayers in disputes with the state's revenue department.According to the Wall Street Journal, the move would be the first disciplinary action against KPMG by a government body over the firm's tax-shelter practices.
Community News

Shareholder Litigation Against Foreign Companies on the Rise

According to PricewaterhouseCoopers 2003 Foreign Securities Litigation Study and a review of cases filed to date in 2004, the number of shareholder class actions filed against foreign registrants is on the rise. Through September 15, 2004, 21 foreign companies listed on U.S. exchanges have been sued in securities class actions. The 21 cases easily surpass the complete 2003 total of 15 such cases and are likely to eclipse the previous high of 23 foreign companies sued in 2002.
Community News

KPMG Settles AmGen Suit; Agrees to Pay $18 Million

Without admitting fault, KPMG LLP settled a suit connected to the collapse of General American Life Insurance Co., formerly Missouri's largest insurance company, the St. Louis Business Journal reported.In a settlement approved Sept.

Fannie Mae Agrees to Demands of Regulator

Fannie Mae, the nation's largest mortgage buyer, has signed an agreement with its regulator to fix accounting problems, raise billions of dollars in capital, and scrutinize management policies and internal controls, the Washington Post reported.The agreement came Monday, on the heels of a highly critical report by the Office of Federal Housing Enterprise Oversight (OFHEO), which outlined steps to repair widespread accounting irregularities that allowed the company to manipulate numbers to make earnings look less volatile from quarter to

Seattle Tax Preparer Ordered to Stop Preparing Taxes

The Justice Department announced this week that a federal court has ordered Ronald Paul of Seattle, Washington to stop acting as an income tax return preparer. The court found that Paul, who does business under the name "The Tax Clinic," engaged in conduct that led to the understatement of tax liabilities.

GE Settles Enforcement Over Failure to Disclose Welch's Perks

The Securities and Exchange Commission announced last week that it has instituted settled enforcement proceedings against General Electric Company (GE). The Commission charged that GE failed to fully describe the substantial benefits it had agreed to provide its former chairman and CEO John F.

IRS Defrauded by Chicago Woman, Ex-Rabbi

A Chicago woman who helped a former rabbi try to bilk the Internal Revenue Service out of nearly $500,000 by filing income tax refunds in the names of deceased people pleaded guilty Wednesday to federal charges, the Daily Southtown in Chicago reported.Therese Daniels admitted in court that she was paid $350 a week to prepare taxes in 1999 and 2000 on behalf of former rabbi Marvin Berkowitz, who is now a fugitive.

GE's Statement on Recent SEC Action

General Electric Company (GE) issued the following statement recently regarding the Securities and Exchange Commission's (SEC) announcement on the Employment and Post-Retirement Consulting Agreement of former GE CEO Jack Welch: GE has cooperated fully with the SEC's informal investigation into the disclosure of Jack Welch's Employment and Post-Retirement Consulting Agreement. As part of that cooperation and in keeping with GE's longstanding emphasis on compliance, GE has settled this administrative matter, while neither admitting nor denying the SEC's findings.

Former Chief of Computer Associates Faces Charges

A federal grand jury on Wednesday charged the former chief executive Sanjay Kumar of Computer Associates with securities fraud and obstruction of justice. According to the Wall Stree Journal, Kumar pleaded not guitly.

U.S. Chamber Seeks to Block SEC Mutual Fund Company Rule

A controversial new rule from the Securities and Exchange Commission is under attack by the U.S. Chamber of Commerce, which filed an emergency motion Monday in the U.S. Court of Appeals for the D.C. Circuit.The Chamber of Commerce, which represents U.S. businesses, is looking to protect the interests of mutual fund companies who will be required to ensure that 75 percent of company directors, including the chairman, be independent of the fund company beginning in 2006, the Associated Press reported. The Chamber of Commerce requested a court ruling by Oct.


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