I held out hope that Ashanti Hamilton was going to be one of the good guys. A guy who represented his constituents with integrity, and demanded the same of his colleagues.
I was wrong.
Here are his shameful words at a rally to support habitual criminal, Michael McGee Jr., as reported by 620 WTMJ Radio: [Read more...]
…or so Usana Health Sciences would have us believe. But don’t listen to them. No, no. Listen to a third party. An unbiased person who is quite knowledgeable about the reasons why auditors quit. Or not.
It took me a moment to pick myself up off the floor after rolling around and laughing, thanks to Scott Van Winkle of Canaccord Adams.
We all understand that investment analysts aren’t really independent. I mean, we get it that Canaccord Adams earns money from Usana and therefore has a vested interest in the company staying afloat.
But doesn’t Van Winkle have at least some common sense and self-respect? Do you think he realized exactly how silly he made himself look? You can’t make this stuff up. The guy really said this, as quoted by the Associated Press: [Read more...]
Would it be any surprise if Patrick Byrne was in violation of more regulations applicable to public companies???
Recently, Sam Antar sent emails to the Overstock.com Board of Directors, two audit committee members and Patrick Byrne himself. The emails reported Byrne’s known violations of Overstock’s Code of Business Conduct and Ethics. Various officials at the SEC were also sent copies of these emails.
The emails were published by Patrick Byrne on his blog.
Sam has recently been the target of retaliation by people believed to be working on behalf of Patrick Byrne. And heres what Sarbanes-Oxley says about retaliation against informants:
From Usana’s 8-K:
In connection with GT’s review of the Company’s unaudited financial statements that were included in the Company’s Quarterly Report on Form 10-Q for quarter ended March 31, 2007, the Audit Committee and GT disagreed as to the scope of the procedures to be performed by the auditors and disagreed as to the extent to which the Audit Committee should engage new, independent consultants to respond to what the Company and its Audit Committee deemed to be unfounded and unwarranted accusations leveled against the Company by a third-party detractor. These disagreements led to further discussions between the Audit Committee and GT, which were resolved to the satisfaction of GT, the Company, and the Audit Committee. As a result of these discussions, the Audit Committee engaged select advisers to render advice with respect to certain of the third party allegations, and GT completed its review of the Company’s first quarter 2007 financial statements. The Company has authorized GT to respond fully to any inquiries of a successor accountant.
So the auditors wanted a different scope (amount or depth) of procedures performed. One can assume the auditors wanted more and Usana wanted less. No company in its right mind would object to if the auditors wanted it the other way around.
It also seems that Grant Thornton suggested that Usana should engage independent consultants to help respond to the fraud allegations in the report done by Barry Minkow and Fraud Discovery Institute (including me).
All in all, it still appears that Grant Thornton wanted more examination of the financials and Usana wanted less, so they fired the auditors.
Note also that Grant Thornton reviewed first quarter numbers, and not the record setting second quarter numbers just announced by the company.
Usana Health Sciences announced today that its auditors, Grant Thornton LLP, resigned the engagement. The press release said:
During USANA’s fiscal years ended December 30, 2006 and December 31, 2005, and the interim periods since December 30, 2006, there were no disagreements between the Company and Grant Thornton on any accounting principles or practices, financial statement disclosure, or auditing scope or procedure, except as described below.
As outlined in a Form 8-K filed today by USANA with the Securities and Exchange Commission (SEC), the Audit Committee and Grant Thornton did have an initial disagreement regarding the appropriate scope of review procedures following unfounded, third-party allegations that appeared in the media in March 2007. That difference of opinion was resolved to the satisfaction of Grant Thornton, the Company, and its Audit Committee.
TRANSLATION: Grant Thornton wanted to do more procedures during the review of quarterly numbers and Usana did not allow it.
And the company announced record high net sales ($109.4 million) and record high earnings per share ($0.66) for quarter 2. Go figure. Anyone suspicious of the earnings results in light of the fact that the auditors couldn’t look at them more closely???
three sets of books and riley timmer posting
john mackey from whole foods posts on message boards and so does riley timmer. he is one of us who has access to inside information on the company and he posts on the message boards under an assumed name defending and attacking. riley has been used. double standard for me. my goal is different. truth. like the three sets of books we have. one to the associates coming into the company. the other to the analysts and stock investors. associates grow all the time. make sure it says that. that is the goal. third set buried deep within a password protected web site for associates only. there below the murky water is a graveyard of dead associates. all three sets of books provide data. they each have a purpose. while eyes focus on earnings the three sets of books go unnoticed.
there is so much work involved in preparing for convention. no time for many. i look at things differently now. the packages and materials given and sold were once admired. now shame lurks in the background. i feel guilty with the distribution of materials that seduce the needy when the reality is contrary. i will be at convention. but no heart for it. more evidence you wanted? ask mark erickson why he needs all that toothpaste.
the new article? one theme. we will not change. nope. it is obvious. no change. stick to our guns. petty things like facts are meaningless. you being served was a prediction i made and it does not help your cause. you need to answer. there will be a scheduling conference. then certain disclosures. then discovery. long process. we know that. forward the phone number. i will make one call.
With the recent SEC investigation of the message board posting activities of Whole Foods CEO John Mackey, the spotlight has also been turned on Patrick Byrne, CEO of Overstock.com. Byrne is known to run around the internet, posting on a few different message boards, often using a screen name rather than his real name.
But did he say this to the New York Times? Nope. He instead said this: [Read more...]
Conrad Black, the former chairman of Hollinger International Inc., was found guilty by a jury on 3 counts of mail fraud and one count of obstruction of justice. He was acquitted on 9 counts, which included racketeering and wire fraud.
The guilty verdicts relate to Black’s skimming of millions of dollars from the company by engaging in deals that weren’t approved by the board of directors. Black built Hollinger into the world’s third-largest newspaper company as ranked by circulation, and at one point the company had more than 300 newspapers. He was forced out of the company in 2003 after an investment firm that held stock in the company began questioning how money was spent. The company is now much smaller, and operates about 100 newspapers under the name of Sun-Times Media Group Inc. The company owns the Chicago Sun-Times.
The indictment of Black in 2005 accused him of stealing more than $84 million from shareholders. (According to defense attorneys, he is now convicted of stealing $2.9 million.) A former executive testified that Black came up with an idea to pay millions of dollars to himself and his cronies by adding non-compete clauses to deals that sold Hollinger papers. The purchasers of those papers said they never asked for non-competes from the executives.
Black could receive a sentence up to 35 years in prison and $1 million in fines and forfeitures. He will be sentenced on November 30.
Tags: fraud, obstruction of justice, racketeering, wire fraud, skimming
Note to Patrick Byrne, CEO of Overstock.com: Read carefully please.
Note to readers: Check out Gary Weiss’s comments on this situation.
According to the Wall Street Journal, the Securities and Exchange Commission has opened an informal inquiry into the message board postings of Whole Foods Market Inc.’s CEO John Mackey. Mackey has allegedly been posting on Yahoo stock boards using a pseudonym for the last 8 years. His postings included pumping Whole Foods’ stock, praising the company’s financial results, and bashing a company Whole Foods wanted to acquire.
The SEC is likely to look into the accuracy of the comments, as well as whether or not Mackey selectively disclosed material corporate information. This disclosure could violate Regulation FD, which basically says that public company executives may not pick and choose who gets material information.
Message board posts are somewhat of untested waters yet. Message board activity has been going on for years, yet a definitive view of this activity under Regulation FD has yet to be developed. [Read more...]
From the Associated Press:
The Securities and Exchange Commission charged a Southern California man with fraud for allegedly running a $45 million Ponzi scheme through investment firms that claimed to make loans to Asian companies.
A complaint was filed Thursday against Terchi “Nelson” Liao, 49, the SEC said. A judge also temporarily halted the activities of two firms he controls, AOB Commerce and AOB Asia Fund, and froze their assets, the agency said.
According to regulators, Liao took in at least $45 million since 2004 from hundreds of investors nationwide, promising them monthly returns as high as 5.5 percent.
While Liao and his firms claimed they made loans to companies in China and other Asian countries, most of the money they received went instead to paying interest due to other investors, officials said.
In a Ponzi scheme, early investors are generously rewarded when they recruit investors. It is illegal to use money from those recruits, rather than real investments, to pay promised returns.
A lawyer representing Liao, Russ Frandsen, said AOB Commerce was cooperating with authorities.
“AOB Commerce had consulted several attorneys during the course of its business in an effort to comply with the law and AOB commerce believed it was in full compliance with the law,” he added.
A hearing in the case was set for Aug. 6.
Allegations were brought to the attention of authorities by Barry Minkow, a former federal convict turned anti-fraud investigator. Minkow is co-founder of the for-profit Fraud Discovery Institute in San Diego.
Tags: fraud, Ponzi scheme, fraud investigator
