2009 June | Rich and Wealth

Archive for June, 2009

Other Consequences (4)

Financial listing requirements typically focus on such quantifiable measures as net tangible assets, market capitalization, profitability, and a company’s share price. For example, among the financial requirements for initial listing on Nasdaq (National Association of Securities Dealers Automated Quotation System), an issuer must have net tangible assets of $4 million, a market capitalization of $50 million, or net income of $750,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. In addition, an issuer must have a minimum share price of $4. For continued listing, these financial requirements become net tangible assets of $2 million, a market capitalization of $35 million, or (more…)

Posted in: General | Posted by: Donalds | June 29th, 2009 | 2 Comments

Other Consequences (3)

In 1999, for example, Cendant Corp. agreed to a $2.83 billion settlement, the largest ever in a shareholder class action, in conjunction with its 1998 accounting scandal. As noted at the time, the settlement “will allow shareholders to recoup some of the losses they suffered when Cendant’s share price plunged by more than 50% after an accounting fraud was disclosed last year.”68 Also settling a lawsuit over the accounting problems at Cendant was the company’s auditors, Ernst & Young LLP, which agreed to a cash settlement of $335 million. (more…)

Posted in: General | Posted by: Donalds | June 26th, 2009 | 2 Comments

Other Consequences (2)

Class Action Litigation Almost immediately after the announcement of a financial reporting problem significant enough to require restatement of prior-period results, class action lawyers likely will have identified investors who have lost money on their investments in the subject company. Using information that the SEC is investigating reporting problems and that prior-year results are in error, suits may be filed in the names of losing investors who are seeking to be named as representatives of an entire class of similar investors. These suits will target many potential defendants, including the (more…)

Posted in: General | Posted by: Donalds | June 23rd, 2009 | 1 Comment

Other Consequences

The monetary fines assessed on defendants for alleged acts of fraudulent financial reporting seem low, almost inconsequential. The low amounts may suggest to some that it is worth trying to get away with reporting transgressions. It is important to keep in mind, however, that the SEC’s monetary fines are not necessarily the end of the matter. As noted, there is always the threat of criminal prosecution, which provides a dark cloud that can hang over defendants for some time. In addition, other costs may accrue to players of the financial numbers game, beyond the potential civil and criminal penalties, that dwarf, in financial terms, the direct costs that the SEC may assess. The significant reduction in shareholder value that (more…)

Posted in: General | Posted by: Donalds | June 20th, 2009 | 1 Comment

IMMEDIATE HELP FOR BAD DEBT

Today, people can not live without loan. People need loan to fill in their financial gap. There is financial gap because they are unable to fulfill expenses with their income which means the expense is greater than the income. It can happen because most of people can not manage their shopping desire. Life style and environment have great influence in making us as consumptive person. We have to admit that live in consumptive society influence us to spend more money for something we actually do not need. We bought it because of the shopping impulse. If we continue this life style, we always count on loan or credit card to settle all the bill and expenses. This can lead us into debt trouble if we are unable to pay back all the loans on time. Once you get into bad debt it is hard to find a way out. (more…)

Posted in: General | Posted by: Donalds | June 17th, 2009 | No Comments

Penalties

The SEC has a wide range of penalties available to it for punishment of violations of the Securities Acts. The simplest penalty is a cease-and-desist order or a permanent injunction where the defendant is enjoined from future violations on penalty of contempt of court. For more egregious acts, wrongdoers can be prohibited from ever again serving as an officer or director of a registered company. Professionals, such as lawyers and accountants, who are found to violate the securities laws can be censured, suspended, or barred from practicing before the SEC. Such suspensions can be for a set time interval or permanent. Civil monetary penalties are also available. In addition, a (more…)

Posted in: General | Posted by: Donalds | June 17th, 2009 | 1 Comment

Application Examples (3)

The complaint alleged that Covey and Skadra caused System Software to misstate its financial results during its fiscal years 1994 through 1996 by improperly reporting revenue on sales of a evelopment-stage UNIX-language software product. Customers who purchased the product allegedly experienced severe and continuing difficulties with its performance and often rejected it. According to the SEC, revenue was not earned and should not have been recognized because “there existed significant uncertainties about customer acceptance of the product and collectibility of the contract price and significant vendor obligations remained. . . .”58 The commission also alleged that System Software recognized revenue from sales of its UNIX product that were subject to side letters or other material contingencies that effectively negated the sales. (more…)

Posted in: General | Posted by: Donalds | June 14th, 2009 | 1 Comment

Application Examples (2)

The SEC maintained that the manner in which these transactions were accounted for was in violation of Section 13(a), the periodic reporting provision, Section 13(b)(2)(A), the books and records provision, and Section 13(b)(2)(B), the internal control provision, of the 1934 Act. (more…)

Posted in: General | Posted by: Donalds | June 11th, 2009 | 1 Comment

Application Examples

To demonstrate how the SEC applies the aforementioned sections and rules of the 1934 Act, specific details of three enforcement actions are provided. The companies involved are America Online, Inc., FastComm Communications Corp., and System Software Associates, Inc. (more…)

Posted in: General | Posted by: Donalds | June 8th, 2009 | 1 Comment

Generally Accepted Accounting Principles and the Securities and Exchange (4)

The antifraud provisions are broad and, taken at face value, could be construed to include almost all forms of misstatement made by a company’s management, whether within or outside its financial statements. However, through case law, it has been demonstrated that to violate the antifraud provisions of the Securities Acts, a defendant must act with scienter—an intent to defraud. Consider, for example, an interpretation of the antifraud provisions found in an administrative proceeding involving Waste Management, Inc. (more…)

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