Author Archive

On Herbalife And The Slow Death Of Value Investing

By • Aug 3rd, 2013

Big egos making shares move by waving their wands. That makes picking stocks based on fundamental analysis more than slightly anachronistic. A bit about Herbalife…



The Problem Of An Audit Firm Market Exit: New Research From University of Chicago Booth School of Business

By • Jul 29th, 2013

A post at University of Chicago Booth School of Business Capital Ideas blog discusses new research from Joseph Gerakos and Chad Syversen on the dangers of industry concentration in the event of a market exit by one of the large audit firms. For example, what if PwC, which audits five of the top ten global pharma companies ran into trouble amid the ongoing investigations of bribery of Chinese officials, in particular by PwC audit client GlaxoSmithKline and a few of its other audit clients?



In Pari Delicto: Can A Law Make It Go Away?

By • Jul 27th, 2013

Pete Brush at Law.com did a story last week about a story about in pari delicto, the adverse interest exception, and holding third-parties like auditors liable for fraud in bankruptcy cases. I was quoted.



The Indictment of S.A.C. Capital Advisors: Where Was The Auditor?

By • Jul 26th, 2013

Unfortunately, regulatory supervision of investment advisors, broker-dealers, and their auditors leaves a lot to be desired. PwC missed years of illegal activity at S.A.C. Capital Advisors. If only we could say that’s the first time.



Cosmology Themes in Modern Literary Fiction

By • Jul 25th, 2013

This is the final paper from my first University of Chicago MLA class, “The New Cosmology”. There are some recommendations for summer reading if you are interested in literary science fiction. (As if I didn’t have enough writing to do…)



Unfrugal, Lawbreaking CEOs and Auditor Reputation: New At University of Chicago Booth School of Business

By • Jul 15th, 2013

Two new blog posts at University of Chicago Booth School of Business Capital Ideas blog. One is about public company CEOs who buy luxury items and break the law and the other is about auditor reputation. Now I need an example of a thrice-married and divorced audit partner with a gambling or drug addiction who owns a Ferrari and a private jet…



The Economic Significance of Accounting and the Key Role of Integrity in the Profession

By • Jul 14th, 2013

Robert Ricketts, Texas Tech University and Rawls College of Business accounting department chairman, invited me to speak at his school last April. Here’s a link to the presentation, an excerpt and some additional comments on recent news.



EY Bets The Farm On Advisory With Vision 2020: A Guest Post From Mark O’Connor

By • Jun 30th, 2013

Lofty goals like EY’s Vision 2020 serve a promotional purpose to attract top talent, and create the rationalization for promises of vast internal opportunities to keep top performers engaged. But unintended consequences would likely foreclose any real possibility that the $50 billion aspect of EY’s 2020 strategic plan could be executed as currently conceived.



More Conflicts For The “Independent” Foreclosure Reviews

By • Jun 30th, 2013

PwC has an ongoing independence conflict in performing the Ally/ResCap independent foreclosure review. This conflict is disturbing on two fronts.



Who Is The PwC Partner Responsible For MF Global? Someone With A Lot of Baggage

By • Jun 14th, 2013

It’s important for the integrity of the capital markets to assign individual responsibility for audit failures. We need to see the key partners’ names and their career histories because recidivist partners are hiding behind the firms which are very good at dodging general liability.