Wednesday, October 22, 2008
Of Planks and Specks-2
"The [SEC] said it has charged a Beverly Hills firm and its principal with illegal short-selling in 14 publicly traded companies. ... The SEC alleges that [Kenneth] Rickel made at least $207,291 in profits from illegal trades in 2005 and 2006", WSJ, 8 October 2008.
"Duane Reade Inc.'s [DRI] former chief executive and chief financial officer were indicted Thursday on charges of exaggerating the income of the New York drugstore chain by millions of dollars. The SEC filed a separate complaint in federal court in Manhattan, saying the men schemed to overstate the chain's pretax income by a total of $17.5 million between 2000 and 2004. The exectives entered into fraudulent transactions to boost reported income and enable the company to meet earnings guidance, the commission said", WSJ, 10 October 2008.
It's good the SEC has time to pursue this charge of illegal profits of .0031 of Lloyd Blankfein's 2007 bonus.
Normally, I wouldn't object to the SEC and DOJ pursuing a case like DRI. But under the circumstances, with "fish to fry" at least 1,000 as large, I think the DRI case should be shelved. Again we wonder, where were the CPAs, PriceWaterhouseCoopers this case, as the fraud went on?