#AceFinanceNews – UNITED STATES (Washington D.C) August 28 2014 –
The Securities and Exchange Commission today charged two executives at a Dallas-based information technology company with mischaracterizing an arrangement with an equipment manufacturer to purport that it was conducting so-called “resale transactions” to inflate the company’s reported revenue.
An SEC investigation found that then-CEO Lynn R. Blodgett and then-CFO Kevin R. Kyser caused the disclosure failures at Affiliated Computer Services (ACS), which has since been acquired by Xerox Corporation. ACS provided business process outsourcing and information technology services. Shortly before the end of its first quarter in fiscal year 2009, ACS faced a scenario where the company’s revenue was set to fall short of company guidance and consensus analyst expectations, so ACS arranged for an equipment manufacturer to re-direct through ACS pre-existing orders that the manufacturer already had received from one of its customers.
This gave the appearance that ACS was involved in resale transactions, but ACS in fact had no such involvement. ACS went on to report $124.5 million in fiscal year 2009 revenue from these transactions as though it had resold the equipment itself.
Blodgett and Kyser have agreed to pay nearly $675,000 to settle the SEC’s charges that they and ACS did not adequately describe the arrangement in its financial reporting, and the purported revenue in turn allowed ACS to publicly report inflated internal revenue growth (IRG). Blodgett and Kyser emphasized the inflated IRG as a key metric in earnings releases and other public statements to investors, and a portion of their annual bonuses was linked to IRG.
“ACS positioned itself in the middle of pre-existing transactions without adding value, but still improperly reported the revenue. Blodgett and Kyser knew the truth about these deals, and they were responsible for ensuring that ACS accurately disclosed the full story to investors,” said David R. Woodcock, director of the SEC’s Fort Worth Regional Office and chair of the agency’s Financial Reporting and Audit Task Force.
“This enforcement action holds them accountable for failing to uphold that responsibility.”
Read More on this Press Release
#AceFinanceNews – UNITED STATES (Washington) – August 29 – President Obama’s new push to secure an international climate change accord is another headache Democrats don’t need this fall.
Several vulnerable House and Senate Democrats kept quiet on the administration’s talks with the United Nations over a deal to reduce global greenhouse gas emissions.
The effort could offer Republicans another opportunity not only to hammer red-state Democrats for what they’ve deemed are Obama’s job-killing energy policies but also to attack Obama for a pattern of “lawlessness,” if he seeks to go around Congress to secure the pact.
But Democrats are, at this point, almost used to doing damage control after a new controversial administration policy crops up. Rep. Nick Rahall (D-W.Va.), one of his party’s most vulnerable incumbents, wasted no time in heartily attacking the president.
“This administration’s go it alone strategy is surely less about dysfunction in Congress than about the president’s own unwillingness to listen to our coal miners, steelworkers, farmers and working families,” he said in a statement.
And some vulnerable Democrats may get a boost from it. Rep. Scott Peters (D-Calif.), who leads a House climate task force, said he agreed with the move in principle.
“I don’t think it’s very surprising, and under the circumstances it’s the right thing to do,” he told The Hill.
#AceFinanceNews – UNITED STATES (Washington) – As President Barack Obama warns of stepped-up economic punishments against Russia for its military incursions inside Ukraine, U.S. sanctions have so far avoided one prominent financial institution: the $10 billion Russian Direct Investment Fund, which has partnered with brand-name American companies and whose advisers include top U.S. and European private equity executives.
Despite its ties to Russian state businesses and officials, the Russian Direct Investment Fund has managed to operate unaffected by the sanctions imposed by the U.S. and EU in response to Russian President Vladimir Putin’s military actions in Ukraine.
#AceFinanceNews – BRITAIN – August 28 – On the 27 August – Families of missing people will be given extra help when a loved one goes missing, under proposals announced by Lord Faulks QC.
The government’s proposals, which fill a gap in the law, would create a new power for relatives of missing people. This would allow families to take care of legal and financial affairs following a disappearance – for example being able to suspend direct debits for mobile phone and utility bills or to make mortgage payments.
It follows the introduction of certificates of presumed death which can be applied for by relatives from 1 October 2014.
These will be equivalent to death certificates and will enable families to resolve a loved one’s affairs when he or she is thought have died.
Ace Related News:
- ‘Missing Children and Adults: A Cross Government Strategy’ was published in December 2011. It committed the government to ensuring there are appropriate systems in place for families to deal with the legal and financial problems faced by those left behind following a disappearance; this consultation forms part of this work.
- Data on the number of people who go missing in England and Wales together with indications from other jurisdictions on the use of their legislation, suggest that if similar provisions were created in England and Wales there would be between 50 and 300 appointments annually.
- View the consultation paper: Guardianship of the Property and Affairs of Missing Persons. The government will decide whether to create a status of guardian of the property and affairs of missing persons once it has considered the responses to the consultation.
- The consultation will last for 12 weeks and will close on 18 November.
- The Presumption of Death Act 2013 will take effect on 1 October 2014.
- The charity Missing People supports missing persons and their families to explore their options and, where possible, to reconnect. For those left behind they provide specialised support to ease the heartache and confusion, and help search for their missing loved ones.
UK Government Press Release
#AceFinanceNews – FRANCE (Paris) – August 28 – French Prime Minister Manuel Valls appointed Emmanuel Macron, a 36-year-old former merchant banker, as his economy minister on Tuesday (26 August), as he unveiled his new government.
Valls, who was himself appointed by President Francois Hollande in March, dissolved his administration on Monday after the left-wing economy minister Arnaud Montebourg criticised the government’s economic policies and accused Germany of having an “obsession” with budgetary austerity in two speeches over the weekend.
"France is a free country which shouldn’t be aligning itself with the obsessions of the German right," Montebourg told a Socialist party rally on Sunday.
#AceFinanceNews – SCOTLAND – August 27 – BBC Scotland on August 01 2014 highlighted the concerns of Royal Bank of Scotland (RBS) over independence and the adverse affect it would have on customer numbers. In their report the BBC reported this: Royal Bank of Scotland has reiterated that Scottish independence could have a "material adverse effect" on its business.
The Edinburgh-based bank, 80% owned by the taxpayer, said a "Yes" vote in the 18 September referendum could cause uncertainty and hit credit ratings.
RBS said independence could also affect the fiscal and monetary backdrop under which the bank operates.
Scottish ministers said independence would boost the nation’s economy.
The bank’s comments came it announced its half year results, confirming figures published last week which showed a big jump in operating profits, to £2.6bn.
In a section of its results report on risk factors facing the group, RBS stated: "Although the outcome of the referendum is uncertain, subject to any mitigating factors, uncertainties resulting from an affirmative vote in favour of independence would be likely to significantly impact the group’s credit ratings and could also impact the fiscal, monetary, legal and regulatory landscape to which the group is subject.
"Were Scotland to become independent, it may also affect Scotland’s status in the EU.
#AceFinanceNews – SCOTLAND – August 27 – More than 130 businesses have signed a letter saying the business case for Scottish independence "has not been made".
The signatories come from a variety of businesses including banking, mining, engineering, food, whisky, and technology.
But lobby group Business for Scotland said economic "facts and figures" support Scottish independence.
The letter has been published in The Scotsman newspaper.
Scotland will go to the polls in the referendum on 18 September, with voters being asked the "Yes/No" question: "Should Scotland be an independent country?"
The letter is signed by business leaders including Douglas Flint, the chairman of HSBC; Andrew Mackenzie, the chief executive of the mining giant, BHP Billiton; and Sir John Grant, executive vice-president of policy at the energy company, BG Group.
Others include Audrey Baxter, executive chairman of Baxters Food Group; Simon Thomson, the chief executive of Cairn Energy; and Ian Curle, the chief executive of Edrington, which owns the whisky brands The Macallan and The Famous Grouse.
The real question though is it better for them or better for Scotland – l suppose that will another debate.
#AceFinanceNews – UNITED STATES – August 26 – The Securities and Exchange Commission today announced that the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) filed a proposal to establish a national market system plan to implement a targeted 12-month pilot program that will widen minimum quoting and trading increments (tick sizes) for certain stocks with smaller capitalization. The Commission plans to use the pilot program to assess whether such changes would enhance market quality for smaller capitalization stocks for the benefit of investors and issuers.
“This is an important step for a valuable initiative that could have meaningful implications for market quality,” said SEC Chair Mary Jo White. “I look forward to the public comment on the proposal and the expeditious development of a final pilot program.”
In June, the Commission ordered the exchanges and FINRA to develop and file a proposal for a tick size pilot program. The SEC will seek comment on the proposed plan, which will be subject to Commission approval following a 21-day public comment period.
The pilot program will include stocks with a market capitalization of $5 billion or less; an average daily trading volume of one million shares or less; and a closing share price of at least $2 per share. The pilot will consist of one control group and three test groups with 400 securities in each test group selected by stratified sampling.
- Pilot securities in the control group will be quoted at the current tick size increment of $0.01 per share, and trade at the increments currently permitted. The control group would represent a baseline for analysis during the pilot period.
- Pilot securities in the first test group will be quoted in $0.05 minimum increments. Trading would continue to occur at any price increment that is permitted today.
- Pilot securities in the second test group will be quoted in $0.05 minimum increments, and traded in $0.05 minimum increments subject to certain exceptions.
- Pilot securities in the third test group will be subject to the same minimum quoting and trading increments (and the same exceptions) as the second test group, but in addition would be subject to a “trade-at” requirement. In general, a “trade-at” requirement prevents price matching by a trading center that is not displaying the best bid or offer.
The pilot also directs the exchanges and FINRA to collect and transmit data to the Commission and make the data available to the public in an agreed-upon format.
After the end of the pilot period, the exchanges and FINRA will complete an assessment of the impact of the pilot and submit the assessment to the Commission.
#AceFinanceNews – UKRAINE – August 26 – At the forthcoming Ukrainian official donors’ meeting scheduled for September, one has to hope that G-7 policy-makers stop pretending and face up to the questions that they should have been asking when Ukraine’s $17 billion International Monetary Fund (IMF) stand-by program was approved last May.
Desmond Lachman (Contributor) @ The Hill
#AceFinanceNews – UNITED STATES – August 26 – The public is paying hundreds of millions of dollars in hospital costs for gunshot victims who lack private insurance, according to a new study issued Tuesday.
The study, which focused on six states, also found that uninsured gunshot victims are more likely to die from their wounds at the hospital than victims with insurance.
According to the Urban Institute study, in 2010 the public footed at least 64.8 percent—and as much as 85 percent—of the hospital costs for treating firearms assault injuries in Arizona, California, Maryland, New Jersey, North Carolina and Wisconsin.