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Our girlfriend Francine McKenna from MarketWatch today announced a rather important article about an accountant who denounced Walt Disney Co.
A Disney whistleblower told the SEC that the company had inflated its revenues for years [MarketWatch]
According to the whistleblower, Sandra Kuba, a former chief revenue analyst at Disney, who had been with the company for 18 years, employees in the parks and resorts sector consistently overstated revenues by $ 6 billion in 2008- 09 by exploiting the weaknesses of the company's accounting software.
Kuba's whistleblower filings, which have been reviewed by MarketWatch, describe several ways in which employees would have generated revenue, including recording fictitious revenue for free golf games or free promotions. Another alleged action by Kuba in his SEC file was to record receipts for $ 500 gift cards at face value, even when guests were paying a reduced fee of $ 395.
Kuba also alleged that employees sometimes recorded gift card revenue twice, both when guests purchased the card and when it was used at a resort. Sometimes the recipes were saved even though a gift card had been given to a guest free of charge following a complaint from a customer, for example, according to the allegations of the whistleblower.
Kuba told Francine that she had met with SEC representatives several times to discuss her claims. Disney calls its accusations "totally baseless" and "unfounded" and "no doubt not supercalifragilisticexpialidocious". (OK, not the last part.)
Former SEC chief: Markopolos targets GE for a short seller and not a "suspicious" alert launcher [CNBC]
Harvey Pitt, who was president of the SEC during the Enron scandal, had a lot to say yesterday about CNBC about the accountant and whistleblower Madoff Harry Markopolos and his report on accounting fraud of $ 38 billion of dollars from General Electric.
On the motivations of Markopolos:
"One of the ways to test Markopolos' good faith, however, is the fact that the SEC has a whistleblowing provision. And if he had brought all his data to the SEC first, he could reap up to 30% of the potential payback that the SEC could get in this case, "Pitt told CNBC.
"Instead, what he's done has been to make public, to explode society without giving him even a chance to respond to his concerns," Pitt said. "These are factors that make this appearance suspicious."
Markopolos revealed that he had conducted research on GE at the request of a hedge fund, which he declined to name:
"Until the SEC and the DOJ resolve the fundamental question of whether General Electric's accounting was appropriate, I think Markopolos becomes, to a certain extent, a secondary issue," said Pitt, acknowledging that GE was under investigation by the Department of Justice and the Exchange Commission on its accounting practices.
GE Audit Committee Chair Leslie Seidman said she supports the company's financial reports:
"Seidman used to work for the FASB, which sets accounting standards. These are not people who ignore the critical facts, "said Pitt, adding that any suggestion that" they were not smart enough to solve these problems "or" refused to see the problems they were aware of. "would take a lot to prove.
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