Accounting Fraud

Investment Overvaluation and Valuation Misstatement – South Florida Investment and Mismanagement Litigation and FINRA Arbitration Attorney

Published on: September 25, 2013 | By Russell L. Forkey, P.A.

JPMorgan Chase Agrees To Pay $200 Million and Admits Wrongdoing to Settle SEC Charges – Firm Must Pay $920 Million in Total Penalties in Global Settlement

The Securities and Exchange Commission (Commission) recently charged JPMorgan Chase & Co. with misstating financial results and lacking effective internal controls to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.

The SEC previously charged two former JPMorgan traders with committing fraud to hide the massive losses in one of the trading portfolios in the firm”s chief investment office (CIO). The SEC”s subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm”s audit committee about the severe breakdowns in CIO”s internal controls.

False and Misleading Information Investment and Securities Fraud Florida Litigation and FINRA Arbitration Attorney

Published on: September 17, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission Charges Operator of Miami-Dade County’s Largest Hospital with Misleading Investors about Financial Condition

The Securities and Exchange Commission (“Commission”) recently charged the operator of the largest hospital in Miami-Dade County with misleading investors about the extent of its deteriorating financial condition prior to an $83 million bond offering.

An SEC investigation found that the Public Health Trust, which is the governing authority for Jackson Health System, misstated present and future revenues due to breakdowns in a new billing system that inaccurately recorded revenue and patient accounts receivable. The Public Health Trust projected a non-operating loss in the official statement accompanying the bond offering in August 2009, but reported a figure that was more than four times lower than what was ultimately reported at the end of the 2009 fiscal year. The Public Health Trust also failed to properly account for an adverse arbitration award, and misrepresented that its financial statements were prepared according to U.S. Generally Accepted Accounting Principles (GAAP).

Hedge Funds – Florida Hedge Fund Investment Loss and Mismanagement Litigation and Arbitration Attorney

Published on: August 30, 2013 | By Russell L. Forkey, P.A.

Hedge Funds – Investment Loss and Mismanagement Federal and State Litigation Attorney:

“Hedge fund” is a general, non-legal term used to describe private, unregistered investment pools that traditionally have been limited to sophisticated, wealthy investors. Hedge funds are not mutual funds and, as such, are not subject to the numerous regulations that apply to mutual funds for the protection of investors – including regulations requiring a certain degree of liquidity, regulations requiring that mutual fund shares be redeemable at any time, regulations protecting against conflicts of interest, regulations to assure fairness in the pricing of fund shares, disclosure regulations, regulations limiting the use of leverage, and more.

“Funds of hedge funds” are nvestment companies that invest in hedge funds. Some, but not all, register with the SEC and file semi-annual reports. They often have lower minimum investment thresholds than traditional, unregistered hedge funds and can sell their shares to a larger number of investors. Like hedge funds, funds of hedge funds are not mutual funds. Unlike open-end mutual funds, funds of hedge funds offer very limited rights of redemption. And, unlike ETFs, their shares are not typically listed on an exchange.

Cash Basis of Accounting, Accrual Method of Accounting and Modified Cash Basis of Accounting – Florida Breach of Contract, Breach of Fiduciary Duty, Fraud and Accounting Negligence Litigation Attorney

Published on: August 15, 2013 | By Russell L. Forkey, P.A.

Cash Basis of Accounting, Accrual Method of Accounting and Modified Cash Basis: South Florida Accounting Negligence and Breach of Contract Commerical Litigation Attorney, Russell L. Forkey, Esq.

The Cash Basis accounting method recognizes revenues when cash is received and recognizes expenses when cash is paid out. In contrast, the Accrual Method of accounting recognizes revenues when goods or services are sold and recognizes expenses when obligations are incurred. A third method, called Modified Cash Basis uses accrual accounting for long-term assets and is the basis usually referred to when the term cash basis is used.

Please keep in mind that the above information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

Accounting Fraud and Accounting Negligence (Generally Accepted Accounting Principles) Florida Litigation and Arbitration Attorney

Published on: June 30, 2013 | By Russell L. Forkey, P.A.

Florida Accounting Fraud and Accounting Negligence Litigation Attorney:

Court Enters Final Judgments against JBI, Inc. and Former Officer in Accounting Fraud Case

The Securities and Exchange Commission announced that a Massachusetts federal court entered final judgments by consent on June 26, 2013 and March 20, 2013, respectively, against John W. Bordynuik (“Bordynuik”) and JBI, Inc. (“JBI”), two defendants in a fraud action filed by the Commission in 2012. The Commission alleged in its complaint that JBI, its then CEO, John Bordynuik, and its former CFO, Ronald Baldwin, Jr. (“Baldwin”), engaged in a scheme to commit securities and accounting fraud in 2009. In the consent judgments, the Court ordered JBI to pay $150,000 and Bordynuik to pay $110,000 in civil monetary penalties.

Florida Accounting and Financial Disclosure Fraud, Breach of Contract and Negligence Litigation and FINRA Arbitration Attorney

Published on: March 1, 2013 | By Russell L. Forkey, P.A.

China-Based Company and Former CFO to Pay Penalties for Disclosure and Accounting Violations

The Securities and Exchange Commission recently charged a China-based petrochemical company and its former chief financial officer with accounting and disclosure violations, and they agreed to pay more than $1 million combined to settle the charges.

The SEC alleges that Keyuan Petrochemicals, which was formed through a reverse merger in April 2010, systematically failed to disclose to investors numerous related party transactions involving its CEO, controlling shareholders, and entities controlled by management or their family members. Keyuan also operated a secret off-balance sheet cash account to pay for cash bonuses to senior officers, travel and entertainment expenses and an apartment rental for the CEO, and cash and non-cash gifts to Chinese government officials.

Edward J. Woodard, Jr., Cynthia A. Sabol and Stephen G. Fields – Accounting Fraud and Negligence Florida Litigation and Arbitration Attorney

Published on: January 10, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Edward J. Woodard, Jr., Cynthia A. Sabol, CPA and Stephen G. Fields, Civil Action No. 2:13cv16 (Eastern District of Virginia, Complaint filed January 9, 2013)

SEC Charges Three Former Senior Officers of Commonwealth Bank With Understating Losses and Material Misstatements During Financial Crisis

The Securities and Exchange Commission today charged three former bank executives in Virginia for understating millions of dollars in losses and masking the true health of the bank’s loan portfolio at the height of the financial crisis.