Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

More context on the sentencing hearing for Scott London. Why I am writing so much about this case.

leave a comment »

Found some more comments from coverage of the sentencing for Scott London that change the perception of the hearing. At least it changes my perception. Mentioned this earlier here. Wish I had been in the sentencing hearing.

Look at the comments I mentioned earlier:

The Wall Street Journal – Former KPMG Partner Scott London Gets 14 Months in Prison for Insider Trading:

“I deeply regret my actions,” Mr. London told the court. “I’m embarrassed and ashamed…I blame no one but myself.”

Bloomberg BusinessWeekEx-KPMG Auditor London Gets 14 Months in Insider-Trading Case:

“I’m at the core an honest person,” London, 51, told Wu. He asked the judge to give him a sentence of probation and community service.

Stuart Pfeifer –Los Angeles Times- KPMG partner who gave tips to golf buddy sentenced for insider trading. Mr. Pfeifer provide a quote from Mr. London provided during an interview a year earlier:

“I have no idea what I was thinking,” he said shortly after he was fired. “I don’t know why there was a lapse of judgment but there was.”

I sense a perspective of “I’m a good guy” in that quote at BusinessWeek. That one sentence suggests a lack of ownership in the fiasco. It is at its core a rationalization. On the other hand, the quote provided by the WSJ indicates ownership of the situation.

The year earlier comment got attention in the twitter world for the passive voice. That phrasing suggests the mess just sort of happened. Remember that was a year ago, in the midst of the massive reporting taking place then. Long before sentencing and possibly in the midst of various negotiations.

All of those are bits and pieces of the story.

More context

Now the point: add to all of that the following comments. Consider whether it changes your perspective.

The article from Mr. Pfeifer above has a time stamp of 11:50 a.m. on 4/24/14. The same article was updated that afternoon with a 5:44 p.m. timestamp as Former KPMG partner sentenced for insider trading.

Check out this comment which was in the 5:44 article but not in the 11:50 article:

“I’m embarrassed and ashamed,” London said, his voice quivering. “I disappointed everyone close to me. Most of all, I disappointed myself.”

London then returned to his seat and wiped away tears.

The earlier article had no quotes from the hearing, only the comment from a year ago.  That quote from the hearing in the later article provides a different perspective. The comments in court show ownership and taking responsibility.

On the other hand, every one of those comments was in front of a judge and had the obvious goal of trying to minimize the jail sentence. On the other, other hand, CPAs are not usually very good actors.

Let me reorganize the above comments to see what picture it shows. The comment from a year ago:

“I have no idea what I was thinking,” … “I don’t know why there was a lapse of judgment but there was.”

Fast forward a year, past the plea deal, prep for sentencing, and now appearing for sentence. It has been a year, which could allow some time for coming to terms with the underlying causes.  Here are several comments during the hearing, with my wild guess on the sequence:

“I’m at the core an honest person,” …

“I deeply regret my actions,” … “I’m embarrassed and ashamed…

I’m embarrassed and ashamed,” (overlap with previous quote) … “I disappointed everyone close to me. Most of all, I disappointed myself.”

… I blame no one but myself.”

Looking at only those fragments of comments from longer comments shows progress on taking ownership.

Why the odd pose in that photo?

Check out the photo of Mr. London in that LA Times article. Looks odd.

He is leaning to his right, has his right arm up in a defensive position, looks a bit distressed, and is covering his left ear with his left hand.

Why would he be in such an odd position? Is he mad at the photographer? Getting ready for an exchange of blows?

Put together what happened a few seconds earlier and a different picture appears (sorry for the pun).

Just a moment before that snapshot, a CNBC camera operator had pushed a camera lens into Mr. London’s ear. He had been struck by a camera. Looks to me like the camera operator stepped into Mr. London. (I hope it is a career limiting move at CNBC to commit battery on the subject of one’s camera work. From my outside perspective, that seems to be exquisitely unprofessional.) You can see the clip here which I mentioned here in update 4.

That odd pose makes sense. The I’m-still-learning-about-this-journalism-stuff part of me wonders why that is the snapshot used to illustrate the story when the photog probably took a hundred pictures of Mr. London walking from the courthouse to his car.

Why do I share this information?

This is rather minor trivia in a story that is now old news. So why this post?

There are several reasons.

By diving deep into a story, I am learning and growing more than with just one or two posts.

By putting my thoughts into writing, I am learning to articulate my observations. Hopefully I’m learning how to tell a complex story.  Essentially, I’m doing it for myself – even if nobody ever reads this post, I benefit. Seth Godin and Tom Peters explain this idea.

Also, someday I’d like to write a book about this situation.

Finally, it is possible (not likely, but possible) that some people following my discussion of the KPMG fiasco might be interested in the subtle details.

Written by Jim Ulvog

June 3, 2014, 8:32 am at 8:32 am

Posted in Audits

Tagged with

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: