Settlement talks are apparently progressing in a large class action suit against the big banks for manipulating foreign exchange rates.
Wall Street Journal reports on 3/17 that Citigroup, Barclays Close to Settling Forex Lawsuit With Private Investors.
Rumors are those two banks may settle with a group of investors for $800M between them.
According to the article, here’s the current status:
After reading the data for the 100 largest accounting firms, I realized the CPA industry can provide a frame of reference for the magnitude of fiascos we are seeing in the banking industry. Discussion of that article is here.
My wild guess is here for the total fines for manipulating forex rates: a range of $11B to $16B with point estimate of $13B.
Sixteen billion is just a number with lots of zeros. Let’s look at that number in relation to revenue in the CPA profession.
Just how big are the Big 4? They are really big.
If we took our magic wand and split up each firm along 3 product lines and the resulting firms would be larger than the currently fifth largest firm.
If we took those Big 12 firms and waved our magic wand again to split each of the 4 audit firms in half, the former Big 4 would make up 16 of the 18 largest firms.
High level overview on the how-to of laundering money and using tax havens. Will leave you curious for more details, but it’s a good intro. Also, article on another couple of billion in another settlement from the Great Recession.
4/7/13 – ICIJ – Tax Havens 101: the high cost of going offshore – Good 4 minute primer on how to set up and run an offshore operation to hide assets, whether from the taxman, your spouse, or creditors.
For under 4 minutes, it is a good explanation.
A few places to expand the ideas:
FASB has issued ASU 2014-15 which brings going concern consideration into the GAAP literature. Here are three articles that helped me and I think you can learn from as well.
You can find ASU 2014-15 here.
You can find SAS 126 in AU-C section 570 here.
Current going concern rules in SAS literature
4/19/14 – CPA-Scribo – Audits: Going Concern Issues – From a year ago, here is a great summary of going concern rules in SAS 126. I recommend you check out this post as a refresher on the rules.
New going concern rules in GAAP
Not a lot of new info in this report on the TBTF banks’ settlement discussions for manipulating foreign exchange rates, or forex. There are a few tidbits at the inside-baseball level that are interesting. If you’ve been reading my posts on banking fiascos, you will appreciate this info.
2/13 – Bloomberg Business – U.S. is Seeking Billions from Global Banks in Currency Manipulation Settlement –
DoJ is looking for a simultaneous settlement with all the banks so none of them are singled out.
Total dollar amount on the table is reportedly $4B with starting point for each bank about $1B, give or take.
Here’s what the really deep-inside-baseball lineup is looking like: Read the rest of this entry »