Staff Writer and Editor AccountingWEB
Share this content
lunch beat

Bramwell's Lunch Beat: SEC In-House Court Process Suffers Another Setback

by
Aug 14th 2015
Staff Writer and Editor AccountingWEB
Share this content

SEC loses again as US judge rejects in-house court process
A second federal judge slapped down the US Securities and Exchange Commission (SEC), ruling its method for appointing in-house judges was “likely unconstitutional,” wrote Bob Van Voris of Bloomberg. The decision on Wednesday by US District Judge Richard Berman in Manhattan rejected the agency's method of selecting administrative law judges, to whom it directs hundreds of cases a year. The legal setback, along with two other ones by an Atlanta judge in June, poses a dilemma for the SEC. The agency's options include routing fewer cases to its in-house judges or trying to challenge the decision, potentially all the way to the US Supreme Court. The latest decision came in a suit brought by ex-S&P executive Barbara Duka, who faces an internal SEC claim that she pushed to change credit ratings to win more business for the firm. Berman tentatively sided with Duka and blocked the SEC from moving ahead.

Read more

SEC commissioners tell industry to finish muni rules on mark-ups
Four SEC commissioners called on the Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board to finish rules on the disclosure of mark-ups and mark-downs on municipal bonds – and threatened agency action if not done, wrote Steve Goldstein of MarketWatch. They said the case announced on Thursday against brokerage firm Edward Jones highlights the need for clear rules. Edward Jones will pay more than $20 million and the former head of its municipal underwriting desk will pay $15,000 to settle charges they overcharged municipal bond customers. Edward Jones customers paid at least $4.6 million more than they should have for new municipal bonds, the SEC said.

Read more

IRS: No taxes on credit monitoring after breach
The IRS made it clear on Thursday that it wouldn't count free credit monitoring offered to victims of data breaches as taxable income, wrote Bernie Becker of The Hill. In a new notice, the tax agency said its current rules didn't specifically tackle that question. Data breaches and identity theft have become an increasingly big problem for both the government and the private sector, with the IRS announcing in May that thieves had swiped data from around 100,000 tax accounts. Businesses and government agencies have offered data breach victims free credit monitoring and other protections to help soften the blow.

Read more

Etsy taps secret Irish tax haven and brags about transparency at home
Brooklyn-based artisan goods marketplace Etsy Inc., which promised to be a beacon for transparency as a public company, recently implemented a strategy that shrouds its offshore tax-cutting arrangements in secrecy, wrote Alex Barinka and Jesse Drucker of Bloomberg. Because of a change in how its Irish subsidiary is registered, Etsy no longer needs to publicly disclose basic financial information about that unit. The classification designates the business in Ireland as an unlimited liability company, enabling them to conceal how profits are shifted to zero-tax locales such as Bermuda or Isle of Man. Now, more revenue may be routed through Etsy's Irish subsidiary. These changes may help lower tax bills, Etsy says. At the same time, having the unlimited liability company means Etsy doesn't have to report publicly how much money is being moved through Ireland or the amount of tax its Irish unit will pay.

Read more

PCAOB continues to sharpen focus on internal controls
Companies with significant accounting problems seem to have a looser grip on their internal controls over financial reporting, even after they attest to their adequacy, wrote Maxwell Murphy of CFO Journal. Audit-oversight inspections indicate 36 percent of company audits had internal-control deficiencies in 2013, up from 16 percent five years ago, according to Jeanette Franzel, a member of the Public Company Accounting Oversight Board (PCAOB). Since 2010, there's been an increased focus from the PCAOB on internal controls, according to a Thursday blog post by Audit Analytics. Several companies are still behind adopting the 2013 Committee of Sponsoring Organizations of the Treadway Commission (COSO) internal-control standards. During a speech last weekend, Franzel said weak controls continue to be the most frequent problems, “which is a concern.” She added, however, that the number of severity of such weaknesses is on the decline.

Read more

Dewey witness says she helped stifle alarms over accounting
Testifying in a Manhattan courtroom for a second straight day on Thursday, former Dewey & LeBoeuf revenue support director Dianne Cascino told jurors she had faced frequent questions at the law firm about accounting entries she used to artificially inflate the firm's bottom line, wrote Nell Gluckman of American Lawyer. Those entries, Cascino testified earlier, included millions of dollars of client disbursements that had been written off, but that she reversed in order to keep them on the firm's books. Cascino is a cooperating witness in the Manhattan district attorney's criminal case against three of Dewey's former leaders – CFO Joel Sanders, chairman Steven Davis, and executive director Stephen DiCarmine – who are charged with deceiving bank lenders and investors about the firm's shaky finances before it collapsed in 2012. All three deny any wrongdoing.

Read more

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.