Compliance
EPA Accuses ADM of Violating Carbon Sequestration Permit, Involving Injection and Monitoring Processes
In August, the U.S. Environmental Protection Agency (EPA) issued a notice of violation to Archer-Daniels-Midland (ADM), accusing it of violations in injection and monitoring processes at a carbon capture and storage (CCS) well in Decatur, Illinois. The notice states that violations occurred between January 2022 and July 2024, involving injected fluids entering unauthorized zones, missing monitoring, and failure to comply with emergency response plans. ADM stated that the issue stemmed from corrosion in a monitoring well at approximately 5,000 feet deep, which has been sealed and taken out of service, with no impact on surface, groundwater, or public health.
Lease Accounting Key Trends Review: 2024 Forecasts vs. Reality
As 2024 draws to a close, this article reviews the four key lease accounting trends identified with the CoStar Real Estate Manager team at the beginning of the year—interest rate fluctuations, ESG, accountant shortages, and key audit matters—and examines the accuracy of each forecast one by one, while also looking ahead to the industry outlook for 2025.
SEC Accuses Executives of Defunct Online Pharmacy in $170 Million Fraud Case
The U.S. Securities and Exchange Commission (SEC) charged three former executives of the defunct online pharmacy startup Medly Health, alleging they defrauded investors of more than $170 million during fundraising by inflating revenue and fabricating prescriptions. The company was once valued at $900 million but ultimately went bankrupt and was liquidated.
ADM's New CFO Vows to Root Out Internal Control Deficiencies, Focusing on Root Causes of Accounting Issues
About six months after Archer Daniels Midland disclosed its accounting remediation plan, new CFO Monish Patolawala said on Tuesday that he will prioritize addressing 'material weaknesses' and help fix 'root causes.' He also emphasized the importance of operational rigor and capital allocation.
SEC fines six credit rating agencies $49 million for record-keeping violations
The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it fined six credit rating agencies a total of $49 million for allegedly failing to properly preserve electronic communications, including text messages and 'off-channel' messages such as WhatsApp. S&P Global and Moody's each paid $20 million, while Fitch paid $8 million. This action expands the SEC's crackdown on record-keeping violations by financial services companies.
ESG Controller: The Newest Member of the Finance Team
With tightening regulations, the ESG controller role is rapidly emerging in large enterprises and some small and medium-sized companies. This role is responsible for establishing internal controls and systematic processes for ESG data, typically reporting to the corporate controller or CFO. More than 50 Fortune 100 companies have already established this position, with compensation reaching up to $148,000.
Trump Case Sparks Calls for Revision of FASB Personal Financial Statement Standards
Professor Daniel Tinkelman wrote to the FASB on August 15, requesting revisions to GAAP treatment rules for personal financial statements, citing that the Trump civil fraud case highlighted ambiguities and controversies in existing standards. He suggested four specific modifications, including prohibiting the misuse of the term "net worth" and switching to "fair value." The FASB stated it would consider the request through its process.
PwC Survey: Only 58% of Executives Have Completed AI Business Risk Assessment
The latest PwC survey reveals that in industries such as healthcare, technology, and finance, only 58% of executives have completed a preliminary assessment of AI risks, even though 73% of respondents said they already use or plan to use AI. The World Economic Forum, the U.S. government, and the UK's technology department have all issued warnings about AI risk management.
SEC Charges Naval Shipbuilder Austal with Accounting Fraud, Fines $24 Million
The U.S. Securities and Exchange Commission (SEC) charged naval shipbuilder Austal and its U.S. subsidiary Austal USA with a fraudulent revenue recognition scheme, understating project cost estimates to meet performance targets, and imposed a $24 million civil penalty. The DOJ stated that Austal USA misled investors between 2013 and 2016 by manipulating the 'estimate at completion' metric, and related executives have been indicted. Austal's stock rose 173% during the fraud period, then fell sharply after costs were exposed.
Super Micro Computer Delays 10-K Annual Report Submission, Initiates Internal Control Effectiveness Assessment
Super Micro Computer announced on August 28 that it expects to be unable to file its fiscal year 2024 10-K annual report for the period ending June 30, 2024, on time, and plans to submit a late filing notice on August 30. The company stated it needs additional time to complete the assessment of the design and operating effectiveness of internal controls over financial reporting. This news caused shares to plummet 19% that day, following a harsh report from short-seller Hindenburg Research.