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    Reserve Manipulation Examples

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    Reserve Manipulation Examples

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    Reserve Manipulation Examples

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    superseth
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    Reserve Manipulation Examples

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    Reserve Manipulation Examples

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views4 pages

    Reserve Manipulation Examples

    Uploaded by

    superseth
    Reserve Manipulation Examples

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Reserve Manipulation

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    Copyright 2011 Deloitte Development LLC. All rights reserved. 2 Footer
    Copyright 2012 Deloitte Development LLC. All rights reserved.
    Reserve Manipulation - Bristol-Myers Squibb
    Bristol-Myers Squibb is a global pharmaceutical company.
    SEC complaint alleged:
    Reversal of reserves to inflate earnings:
    o Phony divesture reserves
    o Corporate contingency reserves
    o Transformed one-time gains into operating income
    This resulted in an overstatement of income in 2000 and 2001 of
    $66 million and $157 million, respectively

    SOURCE: SEC v. Bristol-Myers Squibb Company, August 4, 2004 (Paras. 56-64)
    Copyright 2011 Deloitte Development LLC. All rights reserved. 3 Footer
    Copyright 2012 Deloitte Development LLC. All rights reserved.
    Reserve Manipulation - Bristol-Myers Squibb
    Results
    Settlements
    Bristol-Myers paid $839 million to affected shareholders,
    including:
    o $300 million in a deal with the Justice Department
    o $100 million civil penalty and $50 million Shareholder Fund payment
    in an agreement with the SEC
    Agreed to a deal with the Justice Department, whereby there
    would be a deferment of criminal prosecution for 24 months and
    prosecution would be dismissed if the company is compliant with
    all obligations of the agreement at that time.
    Indictments
    Two executives were indicted, including the CFO

    SOURCES: Bristol-Myers Squibb press release, June 15, 2005
    Copyright 2011 Deloitte Development LLC. All rights reserved. 4 Footer
    Copyright 2012 Deloitte Development LLC. All rights reserved.
    Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms,
    each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of t he legal structure of
    Deloitte Touche Tohmatsu Limited and its member firms.

    Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally
    connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients
    succeed wherever they operate. Deloitte's approximately 170,000 professionals are committed to becoming the standard of excel lence.

    This publication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related
    entities (collectively, the Deloitte Network). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person
    who relies on this publication.

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