Fulcrum Inquiry

Exxon Valdez Punitive Damages Case Has Broader Implications

fulcrumadmin@fulcruminquiry.com — Tue, 1 July 2008 13:16:02 -0700

U.S. Supreme Court Rules In Employees’ Favor On Disparate Impact Issue

fulcrumadmin@fulcruminquiry.com — Tue, 1 July 2008 13:16:02 -0700

After plaintiffs are able to “isolate and identify the specific employment practices that are allegedly responsible for the statistical disparities”, the employer has the burden of proof. In this area, statistics are a helpful tool for both plaintiffs and employers.

Significant New Litigation Disclosures Proposed

fulcrumadmin@fulcruminquiry.com — Wed, 18 June 2008 13:16:02 -0700

Computer Forensics Deserve A Place In Your Human Resource Toolkit

fulcrumadmin@fulcruminquiry.com — Wed, 18 June 2008 13:16:02 -0700

Home Equity Lines Of Credit May Be Dischargeable Even When Borrower Lies

fulcrumadmin@fulcruminquiry.com — Wed, 4 June 2008 13:16:02 -0700

SEC To Require Mandatory XBRL Submissions

fulcrumadmin@fulcruminquiry.com — Wed, 4 June 2008 13:16:02 -0700

IRS Loses Another Case Involving Auditor Work Papers

fulcrumadmin@fulcruminquiry.com — Wed, 21 May 2008 13:16:02 -0700

Study On How To Manage Electronic Records Has Importance To Lawyers Too

fulcrumadmin@fulcruminquiry.com — Wed, 21 May 2008 13:16:02 -0700

Special Masters And Court-Appointed Experts Save Electronic Discovery Costs

fulcrumadmin@fulcruminquiry.com — Wed, 7 May 2008 13:16:02 -0700

Whistleblower Causes Trouble For SEC

fulcrumadmin@fulcruminquiry.com — Wed, 7 May 2008 13:16:02 -0700

Substantially Reduce Electronic Discovery Costs

fulcrumadmin@fulcruminquiry.com — Wed, 23 April 2008 13:16:02 -0700

New M and A Accounting Contains Important Changes

fulcrumadmin@fulcruminquiry.com — Wed, 23 April 2008 13:16:02 -0700

Major Financial Regulation Shakeup Will Take Years To Pass And Implement

fulcrumadmin@fulcruminquiry.com — Wed, 9 April 2008 13:16:02 -0700

U.S. Trading On Foreign Exchanges Will Become Easier

fulcrumadmin@fulcruminquiry.com — Wed, 9 April 2008 13:16:02 -0700

Bear Stearns’ False Statements To The Investing Public Deserve Greater Attention

fulcrumadmin@fulcruminquiry.com — Wed, 26 Mar 2008 13:16:02 -0700

Court’s Dismissal Of Expert Economics Testimony Is Reversed

fulcrumadmin@fulcruminquiry.com — Wed, 26 Mar 2008 13:16:02 -0700

Somber Yet Clear U.S. Financial Report Should Be Required Reading For All Citizens

fulcrumadmin@fulcruminquiry.com — Wed, 12 Mar 2008 13:16:02 -0700

Fannie Mae Crushes The Impact Of New Jumbo-Conforming Home Loans

fulcrumadmin@fulcruminquiry.com — Wed, 12 Mar 2008 13:16:02 -0700

Weak Credit and Economic Conditions Cause Litigation Over “Material Adverse Change” Clauses

fulcrumadmin@fulcruminquiry.com — Wed, 27 Feb 2008 13:16:02 -0700

The fact that these provisions are standard does not mean they are well understood.

Tax Audits Increase, Especially For The Wealthy

fulcrumadmin@fulcruminquiry.com — Wed, 27 Feb 2008 13:16:02 -0700

Here are some statistics (warnings) if you are reporting income greater then $1 million. We review the long-term trends and changes in audit rates, and the reasons for these changes.

Businesses Also Get Benefits From The Tax Stimulus Package

fulcrumadmin@fulcruminquiry.com — Wed, 13 Feb 2008 13:16:02 -0700

Businesses also received some tax goodies under the recent rebate legislation. Here are the details.

Investing Made Easy

fulcrumadmin@fulcruminquiry.com — Wed, 13 Feb 2008 13:16:02 -0700

In uncertain markets, it’s even more important to stick to the basics. We provide two online interactive calculators, and related implementation advice.

Interactive Calculators Facilitate Statistical Sampling

fulcrumadmin@fulcruminquiry.com — Wed, 30 Jan 2008 13:16:02 -0700

Statistical sampling saves considerable money. These online interactive calculators show how sample size changes as other variables are altered.

Schedule 13D Rules Should Be Revised

fulcrumadmin@fulcruminquiry.com — Wed, 30 Jan 2008 13:16:02 -0700

A loophole allows corporate raiders to avoid disclosure by decoupling economic interests and share voting.

Big Lenders Want Sloppy Accounting For Their Sloppy Mortgages

fulcrumadmin@fulcruminquiry.com — Wed, 15 Jan 2008 13:16:02 -0700

The biggest joke (except they are not kidding) in the subprime lending mess is that sophisticated lenders cannot calculate or document the economics of their loan modifications. The pertinent accounting pronouncement is 15 years old, and can be addressed with hand calculators and/or Excel spreadsheets. However, the mortgage lenders contend they cannot comply with the rules because they do not have needed systems in place. It won’t surprise anyone that the alternative being proposed by the lenders will recognize fewer losses.

GAO Admits The Big 4 Competition Problem, But Fails To Suggest Any Improvement

fulcrumadmin@fulcruminquiry.com — Wed, 15 Jan 2008 13:16:02 -0700

The U.S. Government Accountability Office issued a new report on the state of accounting competition. In the large firm segment, everyone acknowledges that insufficient competitive alternatives exist. Although improvements are challenging, the GAO again missed an opportunity to address mandatory auditor rotation as a needed reform to our capital markets.

Delaware Case Alters Existing Practice Regarding Use Of Special Committees

fulcrumadmin@fulcruminquiry.com — Wed, 02 Jan 2008 13:16:02 -0700

A recent case found a waiver of the attorney-client privilege in circumstances that regularly occur when a Special Committee of the Board of Directors shares its findings with the entire Board. The case provides practical problems for Boards that attempt to exercise their normal fiduciary responsibilities whenever plaintiffs name individual Board members as defendants.

2008 Legal Opportunities From The Subprime Mortgage Mess

fulcrumadmin@fulcruminquiry.com — Wed, 02 Jan 2008 13:16:02 -0700

Fallout from subprime mortgages was 2007’s biggest financial story. In 2008, these losses will be a source of enormous legal fees. We summarize the types of claims that will be pursued. Damages and damages causation will be a common challenge with these cases.

More Liabilities Will Be Recorded Under Proposed Accounting Rules

fulcrumadmin@fulcruminquiry.com — Tue, 11 Dec 2007 13:16:02 -0700

Creative accountants and investment bankers created a variety of hybrid instruments in an effort to record equity and lower debt. Combating this creativity created a complex patchwork of over 60 accounting pronouncements. Last week’s FASB proposal will change this. Among other changes, all preferred stock and derivative instruments will now be reclassified as debt. This will create problems for many companies with loan agreements containing debt to equity requirements.

SEC Reduces Rule 144 Requirements And Expands Small Company Alternative Disclosures

fulcrumadmin@fulcruminquiry.com — Tue, 11 Dec 2007 13:16:02 -0700

Small company capital formation just got easier and less expensive. The SEC loosened Rule 144 holding periods and related disclosures. In addition, approximately 1500 additional public companies (those with less than $75 million of public equity float) now qualify for the SEC’s eased small company disclosures.

SEC Allows Foreign Accounting Standards In The U.S.

fulcrumadmin@fulcruminquiry.com — Tue, 27 Nov 2007 13:16:02 -0700

Last week, the SEC approved the use of foreign accounting standards without the need to reconcile or explain differences with U.S. generally accepted accounting principles. This is likely the first step in an inevitable change of allowing all U.S. companies to elect which reporting rules they wish to follow, and then allowing only the international rules. We provide the details, including a table that shows what the most important differences are.

California Continues As One Of The Worst States For Business

fulcrumadmin@fulcruminquiry.com — Tue, 13 Nov 2007 13:16:02 -0700

The non-partisan Tax Foundation released a study comparing each of the fifty states in terms of their tax friendliness. California was bad in earlier studies, and is now getting worse. We provide a summary, make comparisons to other states, and explain the impact that this has on California.

Additional Fairness Opinion Disclosure Now Required In Proxy Statements

fulcrumadmin@fulcruminquiry.com — Tue, 27 Nov 2007 13:16:02 -0700

The SEC indicated its intention to approve a long-standing proposal to disclose rampant conflicts of interest that exist with fairness opinions. We describe the problem, the new rule, and best practices that should be followed by Boards of Directors.

New Accounting Pronouncement Will Likely Increase Mortgage Mess Write-Offs

fulcrumadmin@fulcruminquiry.com — Tue, 13 Nov 2007 13:16:02 -0700

America’s accounting rule maker declined to delay implementation of a new rule that affects those investment banks that invested enormous amounts in subprime loans. We summarize the changes, and why we suspect more write-offs will be required.

Patent Damage Changes Are Coming

fulcrumadmin@fulcruminquiry.com — Tue, 30 Oct 2007 13:16:02 -0700

Patent reform has been discussed since 2001. The House of Representatives has now passed the most sweeping changes to patent law in over 50 years, and is waiting for the Senate’s companion bill. We discuss the impact this legislation will have on patent lawsuit damages. Most commentators say the new law favors defendants, but we are not so sure. We explain the changes, and why various technology companies disagree on whether this law is a good idea.

Big Four Firms Get Poor Grades, But Improve Over Past Failures

fulcrumadmin@fulcruminquiry.com — Tue, 30 Oct 2007 13:16:02 -0700

The PCAOB just issued its last inspection report on the Big Four audit firms. This finishes the third year of such tests. We provide a summary by year for each of the firms. Dramatic improvement occurred, but this is more a commentary on the dreadful performance that these large firms initially earned.

Electronic Storage Best Practices

fulcrumadmin@fulcruminquiry.com — Tue, 16 Oct 2007 13:16:02 -0700

In-house and outside counsel should be taking leadership and ownership of this area because (i) many of the underlying issues are legal and regulatory, and (ii) lawyers are responsible for most of the hidden costs when this area is handled poorly. We explain why most companies are doing a poor job in this area, and provide practical advice regarding how to address this area properly.

How To Get The Discovery You Need From Your Opponent

fulcrumadmin@fulcruminquiry.com — Tue, 16 Oct 2007 13:16:02 -0700

Since practically all business records are now computerized, it makes sense to learn about your opponent’s systems BEFORE you start to make requests. A corporate-representative deposition on electronic-discovery issues should be the very first discovery action you take. When done at the beginning of a case, senseless argument over what information exists and does not exist is avoided, because you then have the benefit of a party admission. We provide a list of records that you should be requesting in this initial deposition.

Lawyers In Hot Water For Not Monitoring Electronic Discovery

fulcrumadmin@fulcruminquiry.com — Tue, 02 Oct 2007 13:16:02 -0700

The Court in a substantial patent case found electronic discovery abuse. The client lost the case and will have to pay defendant’s legal fees and costs. In addition, the lawyers involved will likely be punished personally, including possible (i) monetary sanctions, (ii) referral to the California State Bar for appropriate investigation and possible sanctions, and (iii) counsel’s formal disclosure of this Court’s findings to all current clients and any courts in which counsel is admitted or has litigation currently pending. We provide advice to lawyers who are attempting to meet the new standard of care in this area.

Using Computer Hash Totals In Electronic Discovery

fulcrumadmin@fulcruminquiry.com — Tue, 02 Oct 2007 13:16:02 -0700

Hash totals are the tool used to authenticate electronic evidence. As electronic evidence becomes more prevalent, litigators need to stop wasteful procedures that treat electronic evidence like paper. We provide a primer in this important area, and include an interactive tool that will help evaluate the replacement of manual production numbers.

Ninth Circuit Provides New Cost-Based Rule For Antitrust Cases

fulcrumadmin@fulcruminquiry.com — Tue, 18 Sep 2007 13:16:02 -0700

Earlier this month, the Court established a new “discount attribution” rule when dealing with bundled sales transactions. The case is important because bundled transactions occur almost everywhere, and the ruling establishes a circuit split. Under the rule, which is more friendly to defendants than prior case law, competitors need to perform a cost-based analysis that assumes all discounts associated with the bundle are attributed to products that are offered by the plaintiff.

Tax Accrual Workpapers Are Probably Safe From The IRS’s Probing Eyes

fulcrumadmin@fulcruminquiry.com — Tue, 18 Sep 2007 13:16:02 -0700

Companies must assess their judgmental tax positions when preparing their financial statements. A new accounting rule (FIN 48) changes the rules for assessing and disclosing these contingencies. The IRS has long maintained that it has the right to these analyses. The IRS lost an important case that held this information (i) is subject to the work-product privilege, but (ii) is not subject to other protections if outside auditors are shown the documents.

Punitive damages are now more difficult in patent cases

fulcrumadmin@fulcruminquiry.com — Tue, 04 Sep 2007 13:16:02 -0700

Overturning a 24-year old precedent, the CAFC creates a new standard for when enhanced patent infringement damages apply. Under the new standard, legal opinions are less important, but will probably be obtained by most clients anyhow.

Proposals for the subprime mortgage mess … and other proposals that should be ignored

fulcrumadmin@fulcruminquiry.com — Tue, 04 Sep 2007 13:13:58 -0700

The subprime credit crunch will get even more attention as soon as Congress gets back from its summer recess. Billion-plus proposals for a government bailout are getting serious attention. In the midst of this, one senators suggestion to get auditors involved is particularly poor.

Absent Immediate Relief, Kiss BDO Goodbye

fulcrumadmin@fulcruminquiry.com — Tue, 21 Aug 2007 11:32:25 -0700

Unless quickly reversed, last weeks punitive damage verdict against the seventh largest accounting firm will doom that firm to major reduction or even failure. The underlying facts are not that unusual, which emphasizes how fragile professional service firms (including law firms) really are. A Los Angeles lawyer was in charge of the massacre.

Private-Company Stock Markets Provide Alternative To Regulatory Costs

fulcrumadmin@fulcruminquiry.com — Tue, 21 Aug 2007 11:17:53 -0700

Private companies are not necessarily small. New stock trading opportunities will make staying private even easier. We review these new alternatives, their legal requirements, and why they will likely be successful.

The Seven Deadly Money Sins of the Affluent

fulcrumadmin@fulcruminquiry.com — Tue, 07 Aug 2007 15:21:57 -0700

This short article will likely describe at least one area that deserves attention in your life. We also link to a number of free financial calculators.

California’s Postmortem Publicity Rights Are In Flux

fulcrumadmin@fulcruminquiry.com — Tue, 07 Aug 2007 15:21:08 -0700

Two recent cases potentially change the rights of some of the well-know licensing icons. In addition to describing the changes and related proposed California legislation, we provide a primer regarding publicity rights, privacy rights, and how to value each of these.

GAO Report Describes Iraq Oil Industry Mess

fulcrumadmin@fulcruminquiry.com — Mon, 23 Jul 2007 11:41:45 -0700

The original strategy included the notion that Iraqs massive oil resources would pay for the reconstruction and restructuring effort. A recent report by the General Accountability Office describes what is actually happening. Recommendations for improvement ultimately depend upon the Iraqis managing their own affairs intelligently and cooperatively.

Patent Damages Case Redefines A "Reasonable Royalty"

fulcrumadmin@fulcruminquiry.com — Mon, 23 Jul 2007 11:40:04 -0700

By allowing consideration of product benefits received by the potential customer/infringer, the CAFC upheld a royalty that exceeds the gross sales price of the patented product.

10b5-1 Plans Deserve Greater Scrutiny by Boards of Directors

fulcrumadmin@fulcruminquiry.com — Mon, 09 Jul 2007 12:09:23 -0700

10b5-1 plans allow insiders to sell stock without incurring allegations of unlawfully using insider information.

Controversial Case Sets New Limits For Electronic Discovery

fulcrumadmin@fulcruminquiry.com — Mon, 09 Jul 2007 12:08:45 -0700

In a case of first impression, a Central District of California Court ruled that Random Access Memory (RAM) information must be preserved and produced.

DOL Rewrites Sox Whistleblower Provision to a New Employer-Friendly Standard

fulcrumadmin@fulcruminquiry.com — Tue, 19 Jun 2007 11:54:19 -0700

Of nearly a thousand complaints handled by the DOL, not a single employee has obtained relief. The only employee who had won his case just got overturned. The most recent employer-friendly ruling occurred because the DOLs Administrative Review Board failed to read (or perhaps understand) the accounting provisions contained in SOX. Unless overturned by further judicial process, the precedent will crush most future employee efforts to obtain protection under this law.

SEC Changes Short-Selling Rules

fulcrumadmin@fulcruminquiry.com — Tue, 19 Jun 2007 11:44:37 -0700

Short selling is the practice of borrowing stock from a broker, then selling it in anticipation that the price will go down. Last week, the SEC changed rules affecting short selling, some of which had been in existence since the 1930s. With thinly traded securities, short selling will become both easier to do, and more dangerous.

SEC and PCAOB Each Pass Rules Easing Section 404 Requirements

fulcrumadmin@fulcruminquiry.com — Fri, 08 Jun 2007 10:52:26 -0700

Congress was threatening to amend the expensive and unpopular accounting internal control law. Regulators instead modified their rules, starting with calendar 2007 reporting. Changes include limiting the controls that have to be documented and tested, and eliminating one of the outside auditors opinions. With the scaled-back requirements, smaller public companies will have to comply with Section 404, starting with calendar 2008 reporting.

Assertion That Electronic Data Is "Not Reasonably Accessible" Must Be Supported

fulcrumadmin@fulcruminquiry.com — Fri, 08 Jun 2007 10:52:03 -0700

A recent case confirms that backup data was never automatically exempt from production.; Parties need to justify why electronic data is not being produced. The defendant in this case could have avoided some adverse consequences if they followed the simple advice we provide. We also describe some misused labels in electronic discovery.

California Appellate Court Limits Punitive Damages in a Commercial Setting to a 1:1 Ratio

fulcrumadmin@fulcruminquiry.com — Tue, 15 May 2007 12:22:59 -0700

In a surprising and important ruling affecting the majority of business litigation, State California punitive damages were severely limited. This occurred despite underlying case facts of a fiduciarys theft that would ordinarily deserve greater punishment. The case makes it even more important to address compensatory damages properly.

Court Rules Retention Of Draft Expert Reports Is Not Necessary

fulcrumadmin@fulcruminquiry.com — Mon, 14 May 2007 11:30:49 -0700

Driven by technology changes, disputes over the requirements to retain and produce expert reports are becoming more common. A recent case describes facts commonly seen, and provides guidance as to what is required. The Court scolded legal counsel, but the wrongful conduct could have been easily avoided.

Public Accountants Continue To Overwork Internal Control Testing

fulcrumadmin@fulcruminquiry.com — Mon, 30 Apr 2007 15:33:24 -0700

One does not often hear a government regulator say that too much effort is being spent following its requirements. But, that continues to be the message from the SEC and PCAOB regarding Sarbanes-Oxley Section 404. The lack of competition among the large firms has stalled management efforts to better control this cost.

Unified Message Systems Will Expand Voice Recording Discovery

fulcrumadmin@fulcruminquiry.com — Mon, 30 Apr 2007 15:32:47 -0700

Voice mails have received little attention in electronic discovery. New unified message systems will remove some of the limitations that have caused this. We review the past limitations, and what is creating change. Smart litigators will incorporate these changes into their discovery plans.

U.S. Supreme Court Makes Recovery By Whistleblower Plaintiffs More Difficult

fulcrumadmin@fulcruminquiry.com — Tue, 17 Apr 2007 10:52:56 -0700

Despite the governments opposition to the limitation, the U.S. Supreme Court said successful whistleblowers in False Claims Act litigation should sometimes not share in the recovery.This additional risk will certainly reduce the cases brought by such plaintiffs.

Damages Shortcut Causes Reversal Of Enormous Award

fulcrumadmin@fulcruminquiry.com — Mon, 16 Apr 2007 10:46:19 -0700

The temptation to get just a little bit more was apparently too much to resist. Consequently, a sophisticated plaintiff fails to put on required damages testimony, and entirely loses his eminently collectible $1.6 billion award. The mistakes were basic, yet serve as important reminders. In short, get a proper damages witness, and let the person do his work.

Supreme Court Agrees To Address “Scheme Liability” Of Third Party Aiders And Abettors

fulcrumadmin@fulcruminquiry.com — Wed, 04 Apr 2007 11:05:54 -0700

Many of the large accounting frauds in the last decade involve phony transactions with third parties. The third parties actively assist in documenting the fraudulent transaction and fooling the outside auditors. Under a 1994 precedent, the Third and Eighth Circuits ruled that these outside parties are immune from class action securities lawsuits, while the Ninth Circuit concluded the opposite. In late March, the Third Circuit derailed Enrons $40 billion class-action suit, prompting the U.S. Supreme Court to immediately accept an Eighth Circuit case with identical issues. If it allows penalties to the aiders and abettors of fraudulent transactions, the Supreme Court will remove an important means used to defraud the investing public.

Analysis Of Technology Spending Underscores Key Appraisal Concepts

fulcrumadmin@fulcruminquiry.com — Wed, 04 Apr 2007 09:57:37 -0700

A recent study looked at how companies spend their R&D. The findings conflict with some incorrect conventional ideas. Spending more does not ensure success, unless backed by an end-to-end process of focused selection and exploitation. In a dismal forecast regarding Americas dominance of highly educated research positions, the study also indicates that a majority of future research positions are going overseas to lower-cost regions like China and India.

Could the FASB Be Out of a Job?

fulcrumadmin@fulcruminquiry.com — Wed, 21 Mar 2007 10:00:49 -0700

The SEC recently surprised international companies by indicating it might accept financial statements prepared under international accounting standards, without having such statements reconciled to what would occur under U.S. accounting principles. Significant change has already occurred to converge the international and U.S. standards. We review the more important differences that remain.

Computer Forensics Study Shows Computer Users Are Selling (And Buying) Much More Than They Bargained For

fulcrumadmin@fulcruminquiry.com — Wed, 21 Mar 2007 09:59:51 -0700

Our investigators found a treasure trove of information hidden on purchased computer disks. We identified multiple law violations and severe embarrassments. Lawyers need to understand this to appropriately counsel clients, as well as to understand why computer forensics should be part of their litigation arsenal. Our study was sufficiently eye opening that Computer World and Information Week both accepted our results for publication.

Valuation Case Addresses Important Subchapter S Corporation Issues

fulcrumadmin@fulcruminquiry.com — Wed, 07 Mar 2007 10:02:41 -0700

A recent Delaware Chancellery Court case addresses important valuation issues. On a more general note, the case also provides guidance regarding the proper care and feeding of expert witnesses, and what can go wrong if this guidance is ignored.

Supreme Court Addresses Punitive Damages Limitations

fulcrumadmin@fulcruminquiry.com — Wed, 07 Mar 2007 10:01:44 -0700

In the largest wrongful death damages award ever assessed against Philip Morris, the U.S. Supreme Court overturned the punitive damage award because the jury heard argument that the punishment should include victims who were not part of the current case. We summarize what happened. Surprisingly, the Court declined to address the existing guidance involving punitive damages not exceeding a single digit multiple of compensative damages.

Whistleblower Fraud Study Reports Problems and Opportunities

fulcrumadmin@fulcruminquiry.com — Wed, 21 Feb 2007 10:05:08 -0700

A study released last week covered the largest 230 public company frauds between 1996 and 2004. Like every similar study before it, the report concludes that whistleblowers are the best and most common means of learning the truth. But, the study also shows the painful process that non-anonymous whistleblowers have endured. The obvious conclusion for attorneys and boards of directors is that whistleblower systems are cost effective, but need to be handled independently and anonymously.

Opportunities to Challenge Computerized Evidence

fulcrumadmin@fulcruminquiry.com — Wed, 21 Feb 2007 10:03:34 -0700

More prevalent computerized evidence means greater chances that data has been mishandled. We review key considerations in determining whether you should attempt to exclude such evidence and, similarly, how to avoid this happening to you.

How to Select the Right Form of Document Discovery

fulcrumadmin@fulcruminquiry.com — Tue, 13 Feb 2007 10:07:26 -0700

Here are the pros and cons of the four major choices that you face, ranging from paper to native electronic discovery. No answer is right in all situations, so we tell you how you should make this important decision.

IRS Raises Stakes on Tax Whistleblower Claims

fulcrumadmin@fulcruminquiry.com — Tue, 13 Feb 2007 10:06:25 -0700

Congress and the IRS are realizing that big money can be collected by using informants. Litigants in partnership/shareholder disputes and in family law matters continue to ignore the risks when attempting to use restated financial information that is inconsistent with prior tax reporting. We describe the new law change and the IRS whistleblower program.

Care and Expertise are Needed When Evaluating Electronic Evidence

fulcrumadmin@fulcruminquiry.com — Wed, 31 Jan 2007 10:09:22 -0700

Computer forensics can uncover huge amounts of otherwise hidden data. But, one must also know how to interpret what is found. We provide examples of how data can be properly considered, and why false leads may occur.

SEC Proposes Limitations on the Money-Raising Activities of Hedge and Private Equity Funds

fulcrumadmin@fulcruminquiry.com — Wed, 31 Jan 2007 10:08:33 -0700

Recognizing that there is more than one way to accomplish its objectives, the SEC took its hedge fund loss in the Goldstein case in stride, and proposed other new rules. In addition to expanding the anti-fraud provisions to unregistered investment advisors, the SEC will restrict which investors qualify under Regulation D offerings. In hindsight, the hedge funds would prefer the additional guidance that the Goldstein case overturned.

PCAOB Reports on the Big 4 Accounting Firms’ Disappointing Performance

fulcrumadmin@fulcruminquiry.com — Wed, 17 Jan 2007 10:10:50 -0700

The primary regulator for public company audits just released the last report on its inspections of the largest accounting firms. This third inspection report shows improvement, but the results still leave much to be desired. We compiled comparative statistics from each of the reports.

Private Equity Firms are the New 900-Pound Gorilla in Corporate Finance

fulcrumadmin@fulcruminquiry.com — Wed, 17 Jan 2007 10:10:11 -0700

2006 was a record-setting year for private equity firms and the companies that they acquired. We review what happened and explain the economic factors that are causing this to occur.