- Ernst & Young was fined $8.5 million for violating securities laws while auditing Bally’s Fitness. “In 2002, worried about growing financial scandals, the audit firm of Ernst & Young set out to identify its riskiest clients and force them to comply with accounting rules. The effort backfired.” On the violations, SEC enforcement division director Robert Khuzami said: “It is deeply disconcerting that partners, even at the highest levels of E. & Y., failed to fulfill their basic obligations to the investing public by not conducting proper audits.”
- Insurance woes plague Florida businesses as unemployment insurance premiums are set to skyrocket. “The minimum rate for employers with few claims, which was $8, is leaping to more than $100 per employee. That has left business owners like Rusk with sticker shock.”
- An Op-ed arguing for the transparency of e-mails and key internal accounting documents on AIG servers by Eliot Spitzer, Frank Partnoy and William Black in the New York Times. “As fraud investigators, we would like to examine the trading patterns of A.I.G.’s financial products division, and its communications with Goldman Sachs and other bank counterparties who benefited from the bailout. We would like to understand whether the leaders of A.I.G. understood that they were approaching a financial Armageddon, and whether they alerted their counterparties, regulators and shareholders to the impending calamity.”
- PricewaterhouseCoopers says it’s thankful for a deal of any sort out of Copenhagen, but the outcome was not exactly what it had wished for. Richard Gledhill, head of climate change for the company said: “Business was looking for more. Major capital investments in low carbon infrastructure require long and loud regulatory signals and long term carbon price visibility. We aren’t there yet, so we aren’t going to see the scale OR SPEED of investment required to accelerate the transition to a low carbon economy.”
- D&O rates for financial industry companies declined in the third quarter, according to Aon. On average, pricing fell 2.7% during the third quarter of this year compared with the same quarter last year. “The decreasing number of claims may signal an end to the litigation explosion for financial services firms,” Mike Rice, national practice leader of Aon’s financial services group and author of the index, said in the report. Aon foresees a continuing softening of D&O rates for financial companies into 2010.
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