Tag Archives: KPMG

Looming Dangers Arise in Secret Underground Cigarette Trade

By Jacob Roche, The Motley Fool

Filed under:

Between 2006 and 2012, illegal smuggling of this product grew by more than 15%. The trade is largely run by organized crime. Government policy can be blamed for at least part of the problem.

Am I talking about cocaine? Marijuana? No, just the humble cigarette.

A recent report from research group KPMG, and commissioned by Philip Morris , revealed that while total consumption of cigarettes in Europe has fallen in recent years, the illegal contraband and counterfeit trade has grown from 8.3% of total consumption to 11.1%. The report suggests that the high profitability and low risk of penalties attracts organized crime, which can use the trade as a cash cow to fund far more objectionable activities. An ad from British American Tobacco goes as far as to suggest that the trade could even be indirectly funding terrorism.

There’s a black market for everything
But why are people buying illegal cigarettes? Restrictions differ from country to country, but on the whole, cigarettes are legal and can easily be purchased. The trouble is that, because taxes and regulations vary so widely between countries, the price for consumers varies as well. A pack of Marlboros costs 6.69 euros in Sweden, and 13.18 euros in next-door Norway. In Ukraine, they sell for just 1.31 euros.

The differential makes it easy for smugglers to buy large quantities in cheap countries, bring them into more expensive countries, and sell them at some in-between price to profit. These large quantities are available in part because the large cigarette companies overproduce in cheaper countries. Ukrainian authorities estimate that the world’s four leading tobacco companies — Philip Morris, Japan Tobacco, Imperial Tobacco, and British American Tobacco — produced about 130 billion cigarettes in the country in 2008, 30% more than the local market consumed or legally exported. The rest simply disappeared into the black market, making Ukraine one of the top sources of non-counterfeit black market cigarettes.

What’s the impact?
Apart from the whole “funding organized crime” thing, the trade has a negative impact on both countries and cigarette manufacturers. It is estimated that governments around the world lost $40 billion to $50 billion in tax revenue in 2006, and that’s just from lost cigarette taxes — the losses are higher if you factor in things like unpaid income taxes from the money smugglers make.

As for manufacturers, there are two problems they face. The first should be obvious: If any of them are knowingly involved in undeclared overproduction, they may be criminally liable. Even if they aren’t knowingly involved, government authorities are likely to decide that manufactures are at least partially responsible for cleaning up the mess. The report by KPMG, for example, was only commissioned by Philip Morris as part of a 2004 legal settlement with European regulators.

The other problem is that not all illegal cigarettes are legitimate ones being smuggled. Many are simply counterfeits, dressed up to look like a real pack of Marlboros or

Source: FULL ARTICLE at DailyFinance

KPMG's Inside Trader: What The Auditor, and Skechers, Don't Want To Talk About

By Francine McKenna, Contributor Much has been written about Scott London, the KPMG partner in charge of the firm’s southern California audit practice, and his illegal and career-limiting-move of passing inside information to a jeweler buddy. KPMG may be sorry, at this point, for starting the ball rolling April 8 with its press release. Deloitte hid Vice Chairman Flanagan’s violations as long as possible and made few comments. Deloitte, and Flanagan, successfully stayed out of the national and world news except when something happened in court. Flanagan actually traded on the inside info he filched and I think that’s an even worse indictment of a partner and his audit firm, if one was possible, than what happened at KPMG.

From: http://www.forbes.com/sites/francinemckenna/2013/04/22/kpmgs-inside-trader-what-the-auditor-and-skechers-dont-want-to-talk-about/

KPMG and Scott London: Long-Forgotten Devil's Deal Means Feds Are Unlikely to Bring Corporate Charges

By Harvey Silverglate, Contributor

KPMG LLP, one of the Big Four international accounting outfits, just got a bitter taste of what happens when a partner’s loyalty to the firm erodes. During a March 20 interview with the FBI, former Los Angeles-based partner Scott London admitted to passing confidential inside information about some of the firm’s audit clients to a friend, Bryan Shaw. Shaw reportedly admitted to trading on that information and making over a million dollars, a small portion of which he shared with London. The Wall Street Journal reported that KPMG Chairman and Chief Executive John Veihmeyer was “appalled” to learn of Mr. London’s “violations of trust.”

From: http://www.forbes.com/sites/harveysilverglate/2013/04/18/kpmg-and-scott-london-long-forgotten-devils-deal-means-feds-are-unlikely-to-bring-corporate-charges/

Think Your Taxes Are High? The 5 Countries With the Highest Taxes

By Eric Bleeker, CFA, The Motley Fool

Filed under:

Tomorrow’s D-Day for tax filers across the United Sates. While its easy to bemoan your tax rate, especially if you owe money to Uncle Sam, the United States actually has a relatively low personal tax rate compared with other countries. 

Last October, accounting firm KPMG put together a study of the countries with the world’s highest tax rates on personal income. Not surprisingly, Europe was among the most-taxed regions. Western Europe led all world regions with  a 46.1% tax rate on personal incomes. By contrast, North America stood at 27.7%. 

Also, while the top income-tax bracket for America is jumping to 39.6% this year, it stands neck-and-neck with Spain for having the world’s highest income level where the highest rate of taxes takes effect. 

Clearly, taxes are a matter of significant controversy. Not only do tax codes and deductions vary wildly by country, but the services a citizen receives for his or her tax dollars also differ. Services are difficult to measure in an objective manner, but KPMG tried looking beyond purely top tax rates by measuring effective taxes for people who earn both $100,000 and $300,000 per year. 

Let’s look which countries’ citizens had the highest tax burden in 2012, and how they compare with the United States

1. Belgium

  • 2012 top rate of income taxes: 50%
  • Effective tax rate on $100,000: 47% (13.1% Social Security, 33.9% income tax)
  • World rank on effective tax rate of $100,000: 1
  • Effective tax rate on $300,000: 53.4% (13.1% Social Security, 40.3% income tax)
  • World rank on effective tax rate of $300,000: 2

2. Italy 

  • 2012 top rate of income taxes: 43%
  • Effective tax rate on $100,000: 45.2% (9.6% Social Security, 35.6% income tax)
  • World rank on effective tax rate of $100,000: 4
  • Effective tax rate on $300,000: 51.8% (10% Social Security, 41.8% income tax)
  • World rank on effective tax rate of $300,000: 3

3. France

  • 2012 top rate of income taxes: 45%
  • Effective tax rate on $100,000: 42% (22% Social Security, 20% income tax)
  • World rank on effective tax rate of $100,000: 8
  • Effective tax rate on $300,000: 54% (20% Social Security, 34% income tax)
  • World rank on effective tax rate of $300,000: 1

4. Denmark

  • 2012 top rate of income taxes: 55.4%
  • Effective tax rate on $100,000: 42.3% (0.2% Social Security, 42.1% income tax)
  • World rank on effective tax rate of $100,000: 6
  • Effective tax rate on $300,000: 51.5% (0.1% Social Security, 51.4% income tax)
  • World rank on effective tax tate of $300,000: 4

5. Greece

  • 2012 top rate of income taxes: 45%
  • Effective tax rate on $100,000: 46.5% (16.5% Social Security, 30% income tax)
  • World rank on effective tax rate of $100,000: 2
  • Effective tax rate on $300,000: 45.1% (5.6% Social Security, 39.5% income tax)
  • World rank on effective tax rate of $300,000: 14

For comparison: The United States

Why Herbalife Should Sue KPMG

By Rich Smith, The Motley Fool

Filed under:

Herbalife has had a rough time of things so far this year, and things got even rougher when the multilevel marketer got sucked into an insider trading scandal at KPMG last week. When a KPMG partner was caught selling inside information on two clients he was auditing, Skechers and Herbalife, and subsequently “fired” both clients, Skechers shares skated away unscathed — but Herbalife lost more than $100 million in market cap.

How should Herbalife respond to the situation KPMG has put it in? Click through to the following video, and Fool contributor Rich Smith will lay it out for you.

What macro trend was Warren Buffett referring to when he said “this is the tapeworm that’s eating at American competitiveness”? Find out in our free report: “What’s Really Eating at America’s Competitiveness.” You’ll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

The article Why Herbalife Should Sue KPMG originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Skechers and has long January 2014 $50 calls on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}

addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})

var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);

(function () {

var ga = document.createElement('script');
ga.type = 'text/javascript';
ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js';

var s = document.getElementsByTagName('script')[0];
s.parentNode.insertBefore(ga, s);
})();

<p style="clear: both;padding: 8px 0 0 0;height: 2px;font-size:

From: http://www.dailyfinance.com/2013/04/14/why-herbalife-should-sue-kpmg/

Ex-KPMG partner hit with civil, criminal charges

It has shades of a Hollywood crime story.

An accountant and a jeweler are longtime friends and golf partners. But then the down-on-his-luck jeweler convinces the accountant to pass along private information about clients, and uses the insider information to play the stock market and win big. Bags of cash swap hands in alleys. Then the feds get wind of the scam. The jeweler turns state’s witness and amid a spiral of wire taps and surveillance photos, the men’s reputations unravel and their mea culpas play out on a very public stage.

On Thursday, federal prosecutors and the Securities and Exchange Commission filed criminal and civil charges against fired KPMG accounting partner Scott London for conspiracy to commit securities fraud through insider trading. The 24-page criminal affidavit alleges that London, 50, provided confidential information about KPMG audit clients Herbalife Ltd., Skechers USA Inc., Uggs maker Deckers Outdoor Corp., RSC Holdings and Pacific Capital to Bryan Shaw, a close friend, from late 2010 until last month. Prosecutors allege that Shaw made more than $1.2 million in illicit profits by trading in advance of company announcements on earnings results or mergers.

The government alleges that on some occasions, London called Shaw two to three days before press releases were issued for KPMG clients and read confidential information from the draft releases to Shaw. London, who worked for KPMG for nearly 30 years, also disclosed confidential information about impending mergers concerning KPMG clients before that information was made public. He discussed how to structure Shaw’s purchases of the stock in certain companies in order to protect them from being discovered, according to the complaint.

The government‘s complaint quotes Shaw as saying that he expressed concerns to London in late 2011 about trading ahead of RSC Holdings’ sale to United Rentals, but that London told him not to worry because regulators weren’t looking for “small fish.”

Shaw passed London “tens of thousands of dollars in cash” in bags over the years for the information, according to the government. London also received a $12,000 Rolex watch, as well as jewelry for his wife and concert tickets. London‘s lawyer Harland Braun has said London received “about $25,000” over several years. The SEC puts the cash sum at at least $50,000.

The scandal has unfolded in pieces this week. Late Monday KPMG announced that it fired a Los Angeles partner who leaked nonpublic information about companies that KPMG worked with. On Tuesday nutritional supplement maker Herbalife and shoe seller Skechers announced that they were the companies whose information was

From: http://feeds.foxnews.com/~r/foxnews/national/~3/mVm_8wKvk_A/

KPMG Statement On Scott London Criminal and Civil Charges

By Francine McKenna, Contributor I asked KPMG spokesman Seth Oster for a statement on KPMG‘s next steps and further investigation given the more extensive charges leveled against Scott London by the Department of Justice and the SEC.  I received this statement this evening. (Emphasis mine.) STATEMENT FROM KPMG CHAIRMAN & CEO JOHN VEIHMEYER   KPMG LLP Chairman and CEO John Veihmeyer issued the following statement upon reviewing the criminal complaint filed today against former partner Scott LondonLondon was charged today in the Central District of California for conspiring to commit securities fraud through insider trading. “I was appalled to learn of the additional details about Scott London’s extraordinary breach of fiduciary duties to our clients, KPMG and the capital markets.  We unequivocally condemn his actions, and deeply regret the impact that his violations of trust and the law have had on our clients and our people. KPMG will be bringing legal actions against London in the near future. “As a result of his unlawful activities, it was clear that our independence had been impaired with respect to the two companies for which he served as lead partner, Herbalife and Skechers. Due to this impairment, we were professionally obligated to take the regrettable action to resign as the independent auditor for these two companies and withdraw our previously issued audit reports. The sole reason for these steps was the actions of our former partner and we have no reason to believe that their financial statements are materially misstated.”  

From: http://www.forbes.com/sites/francinemckenna/2013/04/11/kpmg-statement-on-scott-london-criminal-and-civil-charges/

Price Of Former KPMG Auditor's Integrity: Fifty Grand, A $12,000 Rolex And Some Springsteen Tickets

By Steve Schaefer, Forbes Staff

So what does it take to wring sensitive information out of somebody? In the case of former KPMG audit partner Scott London the answer is apparently a fancy watch, a few concert outings, some free dinners and the old standby, cold hard cash.

From: http://www.forbes.com/sites/steveschaefer/2013/04/11/price-of-former-kpmg-auditors-integrity-fifty-grand-a-12000-rolex-and-some-springsteen-tickets/

Fmr KPMG Partner, Scott London, Legal Strategy – Admit Guilt Before Charges

By Walter Pavlo, Contributor

In the old days, last week, many accused of white-collar crimes took a traditional path of 1) Retaining a Lawyer, 2) Denying the Charges, and, after a long while, 3) Admitting guilt through a plea agreement.  However, the case of former KPMG partner Scott London is embarking on new ground … admitting guilt before he is even charged.

From: http://www.forbes.com/sites/walterpavlo/2013/04/11/fmr-kpmg-partner-scott-london-legal-strategy-admit-guilt-before-charges/

Another "Rogue" Audit Partner; Another "Duped" Audit Firm

By Francine McKenna, Contributor There are things you anticipate, worry about, know will be troublesome once they happen. It’s safe to say global audit firm KPMG wasn’t worrying it would someday hear the leader of its Los Angeles audit practice was passing confidential client information to someone else who then traded on it. …read more

Source: FULL ARTICLE at Forbes Latest

Dow May Open Higher After Chinese Imports Beat Expectations

By Roland Head, The Motley Fool

Filed under:

LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open up by 0.29% this morning, while the S&P 500 may open 0.26% higher. The Dow closed at a new record high of 14,673.46 yesterday, but the CNN Fear & Greed Index remained almost unmoved at 53, or “neutral.”

European markets moved strongly higher this morning after Chinese import and export figures beat analysts’ forecasts. Imports rose by 14.1% in March, while exports rose by 10%, boosting trade hopes for European companies. At 7:20 a.m. EDT, the German DAX was up 1.16%, and the French CAC 40 was 1.18% higher. In London, the FTSE 100 was up 0.76%, helped by a strong showing from mining firms and financial stocks, which collectively make up the majority of the index’s capitalization.

In the U.S. today, investors are likely to focus closely on the minutes of March’s Federal Open Markets Committee meeting, which may provide some insight into the current thinking of the Fed’s interest rate-setting committee. The minutes are due to be published at 2 p.m. EDT, when details of March’s federal budget are also due to be released.

In other news, the Mortgage Bankers Association reported earlier this morning that its weekly mortgage-applications index increased 4.5% following a 4% decline the previous week. The EIA weekly petroleum status report is due at 10:30 a.m. EDT.

Companies due to report quarterly earnings before markets open this morning include Constellation Brands, CarMax, MSC Industrial Direct, and Bed Bath & Beyond. Earlier this morning, Fastenal reported quarterly earnings of $0.37 per share, an 8.8% increase on the same period in 2012. Fastenal also announced a $0.20 cash dividend for the second quarter of 2013.

Stocks that may be actively traded today include Herbalife, which slid nearly 4% before markets closed yesterday after it revealed that its auditor, KPMG, was to resign. The decision is the result of insider-trading allegations against the KPMG partner responsible for auditing the nutritional-supplements company, which is already the subject of a war of words between activist investors Carl Icahn and William Ackman. Trading in J.C. Penney shares may also be heavy after the retailer’s share price slid a further 12% in trading yesterday. The company’s shares have now fallen almost 60% over the last year.

Finally, let’s not forget that the Dow’s daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced of the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

The article Dow May Open Higher After Chinese Imports Beat Expectations originally appeared on Fool.com.

…read more

Source: FULL ARTICLE at DailyFinance

Herbalife Response to Media Inquiries

By Business Wirevia The Motley Fool

Filed under:

Herbalife Response to Media Inquiries

LOS ANGELES–(BUSINESS WIRE)– Herbalife (NYS: HLF) today issued the following statement in response to media inquiries:

We believe we are currently in compliance with New York Stock Exchange (NYSE) listing requirements and we do not anticipate that the NYSE will initiate any type of proceeding to delist the company. Earlier today, the company proactively reached out to NYSE officials regarding its detailed plan to replace KPMG and will keep the exchange fully apprised of those efforts. In addition, the company has confirmed that KPMG‘s resignation as the company’s auditor and KPMG‘s withdrawal of its prior audit opinions will not result in a default under Herbalife’s existing credit facilities.

About Herbalife Ltd.

Herbalife Ltd. (NYS: HLF) is a global nutrition company that sells weight-management, nutrition and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 80 countries to and through a network of independent distributors. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife’s website contains information about Herbalife, including financial and other information for investors at http://ir.Herbalife.com. The company encourages investors to visit its website from time to time, as information is updated and new information is posted.

FORWARD-LOOKING STATEMENTS

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:

  • any collateral impact resulting from the ongoing worldwide financial environment including the availability of liquidity to us, our customers and our suppliers or the willingness of our customers to purchase products in a difficult economic environment;
  • …read more

    Source: FULL ARTICLE at DailyFinance

KPMG Kerfuffle KOs Herbalife Stock

By Rich Smith, The Motley Fool

Filed under:

Herbalife shares are in freefall today — once again, through no fault of its own.

In months past, the stock has come under continual attack from famed hedge-fund manager Bill Ackman, who has publicly shorted the stock and even accused the multilevel marketer of operating a pyramid scheme. Today, however, the culprit is different: Herbalife’s own auditor is behind the collapse of the stock, which is down 3.6% with an hour left in trading.

So what happened to Herbalife?

In a nutshell, the story goes like this. Last week, the company’s auditor, KPMG, announced that it had fired a partner in its Los Angeles office who had apparently been feeding confidential information on the company to a third party, which was trading Herbalife stock.

This morning, Herbalife announced that as a result of these actions by the partner in question, KPMG has notified Herbalife that it’s resigning as the Herbalife’s auditor. KPMG says this employee may have compromised Herbalife’s fiscal-year 2010, 2011, and 2012 audit reports, which can therefore no longer be considered “independent.” KPMG has consequently resigned and withdrawn its endorsement of the financial-year reports in question.

For its part, Herbalife is attempting damage control, emphasizing that:

  • KPMG‘s resignation is “solely due to the impairment of KPMG‘s independence resulting from its now former partner’s alleged unlawful activities.”
  • “Herbalife’s financial statements, its accounting practices, [and] the integrity of Herbalife’s management” have not been impugned.
  • None of the audit reports (albeit now withdrawn) “contained an adverse opinion or a disclaimer of opinion, nor was any such report qualified or modified as to uncertainty, audit scope or accounting principles.”
  • There were never any “disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures.”

As such, Herbalife says it stands by the accuracy of the reports, even if KPMG no longer does, averring that “the Company’s financial statements covering the referenced periods fairly present, in all material respects, the financial condition and results of operations of the Company as of the end of and for the referenced periods.”

Investors, now beginning to absorb the import of the news, are beginning to rethink the sell-off. The stock has slowly been recovering some of its losses this afternoon.

Expert advice from The Motley Fool
Profiting from our increasingly global economy can be as easy as investing in the U.S. of A. The Motley Fool’s free report “3 American Companies Set to Dominate the World” shows you how. Click here to get your free copy before it’s gone.

The article KPMG Kerfuffle KOs Herbalife Stock originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has the following options: Long Jan 2014 $50 Calls on Herbalife Ltd. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same …read more

Source: FULL ARTICLE at DailyFinance

Stocks Are Higher Despite Significant Turmoil

By John Maxfield, The Motley Fool

Filed under:

Today is an interesting day to be an observer of the stock market.

Aluminum giant Alcoa kicked off earnings season less than 24 hours ago, investors and analysts are still parsing last night’s speech by the Federal Reserve chairman, and trading in two stocks was halted this morning due to an insider-trading scandal at one of the nation’s largest accounting firms.

You’d never know this, however, by looking at the performance of blue-chip stocks today. With roughly an hour left in the trading session, the Dow Jones Industrial Average is up by 97 points, or 0.66%.

While Alcoa is certainly not the economic bellwether it once was, its earnings release is nevertheless noteworthy, as it marks the unofficial start of earnings season. For the three months ended March 31, the company earned $0.11 per share, comfortably exceeding the consensus estimate of $0.08 — though its top-line revenue figure came up short of expectations.

The next Dow component at bat is JPMorgan Chase . The nation’s largest bank by assets is scheduled to report earnings on Friday. Analysts anticipate that the bank will earn $1.39 per share, an increase of nearly 10% over the same quarter last year.

At about the same time Alcoa was reporting its results, Federal Reserve Chairman Ben Bernanke was delivering remarks at a financial-markets conference near Atlanta, Ga. The purpose of the talk was to discuss bank stress-testing, though Bernanke couldn’t avoid the subject of the economy, given last Friday’s dismal jobs report. According to Bernanke, “Today the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would all like them to be.”

The remarks left analysts wondering if and when the Fed might finally ease off of the aggressive monetary policy that has driven long-term interest rates down to near-historic levels.

Finally, the two biggest pieces of news today both concerned stocks owned by activist investor Bill Ackman. First, J.C. Penney announced that CEO Ron Johnson has been shown the door and replaced by former J.C. Penney CEO Myron Ullman. The retailer has been reeling from Johnson’s attempted makeover of the brand, which has thus far led to massive declines in same-store sales. The stock is down nearly 12% on the news.

And second, trading in shares of Herbalife was temporarily halted this morning after it was reported that KPMG had resigned as its auditor. Although there’s been much speculation about the possibility that Herbalife is a Ponzi scheme — this is Ackman’s position and thus the reason he’s short Herbalife stock — today’s move involves KPMG instead. It turns out that a partner at the firm had been leaking inside information about Herbalife and another company to a still-unknown outfit, which then traded on the inside information.

Want to learn more about Alcoa?
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about …read more

Source: FULL ARTICLE at DailyFinance

The Men Who Run Bunzl

By Tony Reading, The Motley Fool

Filed under:

LONDON — Management can make all the difference to a company’s success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at Bunzl , the “one-stop shop” distributor of low-value products from coffee cups to cleaning fluid.

Here are the key directors:

Director

Position

Philip Rogerson

(non-exec) Chairman

Michael Roney

Chief Executive

Brian May

Finance Director

Pat Larmon

CEO, North America

Philip Rogerson has been chairman since March 2010. Although he gave up one chairmanship and another non-executive position to clear his diary for the role, he remains chairman of another FTSE 100 company, Aggreko, and of FTSE 250 member Carillon.

His executive career was spent at ICI, and then British Gas where he served as finance director and as a divisional director, before overseeing the demerger of Centrica as deputy chairman.

Growth by acquisition
Michael Roney became CEO in 2005, shortly after Filtrona was spun off from the company leaving Bunzl as the distribution group it is today. He had been a non-executive since 2003, and as he stepped into the CEO role the former CEO, who had overseen Bunzl’s divestment of a swathe of businesses over a 14 year period, moved up to chairman. That would be frowned upon in today’s corporate governance climate, but makes for continuity.

An American, Roney worked for Goodyear in various roles before joining Bunzl, including being CEO of the Asian and European divisions. With Bunzl already focused on distribution, Rooney has led its growth by acquisition, rolling out specific market niches globally, with over 60 acquisitions completed. Revenues, operating profit and EPS have grown in each year under his leadership, and the shares have increased by 150%.

Company men
Brian May has been finance director for most of Roney’s tenure, taking up that role in 2006. A chartered accountant, he joined Bunzl from KPMG in 1993 and rose through the finance ranks. North American CEO Pat Larmon has also been with the company for a long period. He joined in 1990 when Bunzl took over a company he owned, and rose through the group to his current position in 2004.

Bunzl has six non-execs, with two new directors joining this year. They have credible and relevant experience with a bias toward distribution and retailing CVs. The company has a policy requiring executives holding shares worth at least their annual base salary.

I analyze management teams from five different angles to help work out a verdict. Here’s my assessment:

1. Reputation. Management CVs and track record.

Good.

Score 3/5

2. Performance. Success at the company.

Excellent.

Score 5/5

3. …read more

Source: FULL ARTICLE at DailyFinance

Fraud Prevention in a Big Data Environment

By Derek Klobucher, AdVoice

Christchurch, New Zealand is rebuilding after a devastating earthquake two years ago and recovering from the global financial crisis — and it could be losing more than US$1.2 billion to fraud. Of 140 businesses surveyed there, 38 percent had no distinct procedures to combat fraud, Chicago-based forensic analyst firm KPMG stated Monday. Fraud costs companies US$3.5 trillion to fraud each year, according to the ACFE. Companies around the world lose US$3.5 trillion to fraud each year, according to a report by the Association of Certified Fraud Examiners last year. More than one-fifth of cases in the study lost at least US$1 million to fraud, and the average loss of revenue per organization is 5 percent annually. …read more
Source: FULL ARTICLE at Forbes Latest

Australia remains favoured destination for Chinese investment, but faces growing competition

The latest research into Chinese direct investment by KPMG and the University of Sydney China Studies Centre – “Demystifying Chinese Investment in Australia: Update March 2013″- reveals some new and potentially significant changes to the pattern of Chinese outbound direct investment (ODI) in Australia in 2012 compared to previous years. These changes occurred across industry sector, geography and investor type. …read more
Source: FULL ARTICLE at Phys.org

Is GM Ready to Turn the Corner?

By Daniel Miller, The Motley Fool

Filed under:

Detroit’s big three have come a long way since the depths of the recent recession. They’ve improved vehicle quality and management enough for investors like me to root for an American comeback. While consumer perceptions are difficult to turn around, Ford and General Motors have gone to great lengths to convince consumers that domestic vehicles can once again compete. 

That said, in many ways GM still trails behind rival Ford. Its vehicle portfolio is much older, contributing to its market-share losses. The common jab of “Government Motors” highlights the negativity its brand image has battled over the last few years. GM still ranks second in global sales and needs to refresh its vehicles and improve its marketing to become a better investment. Let’s look at a few recent events that might show GM is ready to turn the corner and start fixing its vehicle portfolio and marketing weaknesses.

Enter Mr. Mahoney
Tim Mahoney is Chevrolet’s new global marketing chief. GM hopes he will bring stability and creativity to its often bland marketing strategies. In the past it’s been difficult to create an image that can encompass such a large number of brands and models. The last attempt, “Chevy Runs Deep,” didn’t run very far or very long. It’s remarkable that with the slogan not translating well into other languages, Chevy still represented 54% of GM‘s global sales. Imagine how sales could rise if Chevy finally creates a marketing campaign that consumers can relate with and buy into.

It will be no easy task, as Chevy is about to tackle its wildest vehicle portfolio refresh in the brand’s 102-year history. It will redesign numerous models in the United States this year, including its highly profitable Silverado. The Impala and the buzz-worthy new Corvette will also roll out in new styles. Chevy will then continue its redesigns into early 2014, with the Suburban and Tahoe due to release.

Mahoney’s first job will be to make sure Chevy’s cash cow, the Silverado, is positioned correctly. It has a year’s head start on Ford’s redesigned F-150 and must take advantage of that to secure its market share. Ford and Chrysler both have been touting fuel efficiency, which, in KPMG‘s 2013 survey, is the consumer’s No. 1 factor in purchasing a vehicle. Ford is showing off its popular EcoBoost engine whenever possible, and it’s catching on with consumers. The turbocharged V6 saves fuel while providing equivalent power. GM‘s other rival, Chrysler, has been parading the Dodge Ram in recent commercials as a best-in-class 25 mpg on the highway. Finally, GM has prepared a response to its rivals’ advertisements.

Mahoney is fighting back with a different viewpoint. Rather than arguing fuel efficiency, it says the Chevy Silverado 1500 has the lowest total cost of ownership. That includes transaction prices, operating costs, maintenance, and fuel consumption. It’s the second year in a row it earned the “5-Year Lowest Cost to Own” award. If Chevy can market this idea well, …read more
Source: FULL ARTICLE at DailyFinance

Saba CEO Steps Down

By Rich Smith, The Motley Fool

Filed under:

On Friday, software maker Saba announced that company founder, Chairman, and Chief Executive Officer Bobby Yazdani has retired, effective March 1.

Yazdani will be replaced on an interim basis by Executive Vice President and Chief Operating Officer Shawn Farshchi, who will remain COO while holding the interim CEO title. The company also noted that it is separating the office of chairman from that of CEO and naming independent director Bill Russell non-executive chairman of the board.

In an SEC filing related to Yazdani’s departure, Saba disclosed its separation agreement guaranteeing Yazdani:

  • “all base salary due and owing and all other accrued and unpaid benefits through the last day actually worked.”
  • a “target bonus payment” of unspecified amount.
  • “continued group health insurance coverage paid by the company” for one year.
  • “all shares subject to any outstanding stock options and restricted stock units … held by the Executive.”

The company was very careful not to include in its filing any actual dollar figures related to Yazdani’s exit package.

In other news, Saba announced Friday that it is switching auditors. Once Ernst & Young has completed its work on restating the company’s financials so that the firm can file its belated SEC filings, KPMG will take over as Saba’s new independent registered public accounting firm of record.

The article Saba CEO Steps Down originally appeared on Fool.com.

Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}

addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})

var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);

(function () {

var ga = document.createElement('script');
ga.type = 'text/javascript';
ga.async = …read more
Source: FULL ARTICLE at DailyFinance