NPR:  History of Fake News ---
https://www.npr.org/2018/06/25/623231337/fake-news-an-origin-story
Jensen Comment
Fake financial news probably has an even longer history. Think about such things as rumors of buried treasure, gold discoveries, phony medicines, etc.
One of the best known frauds in history is the South Sea Bubble in the early 1700s ---
https://en.wikipedia.org/wiki/South_Sea_Company
One of my favorite fraud stores, having lived in northern California,  is about the 1913 planting of over 30 million eucalyptus trees in the USA in investment scam using fake-news news that eucalyptus trees were great hardwood investments. Buyers should've investigated why there was not more eucalyptus furniture in Australia. Eucalyptus is a fast-growing hardwood, but it's too difficult to work with for making furniture ---
https://books.google.com/books?id=xQU3AQAAMAAJ

Those Phony IRS Scams Threatening to Put You in Jail
New technologies aided a massive phone scam, but investigators turned the tables on the scheme, which allegedly caused ‘hundreds of millions of dollars’ in taxpayer losses ---
https://www.journalofaccountancy.com/issues/2018/sep/tigta-irs-impersonation-scam.html?utm_source=mnl:globalcpa&utm_medium=email&utm_campaign=12Sep2018

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

The IRS Scandal, Day 1921: Federal Judge Approves $3.5 Million Payout From IRS To >100 Tea Party Groups To Settle Targeting Claims ---
http://taxprof.typepad.com/taxprof_blog/2018/08/the-irs-scandal-day-1920-federal-judge-approves-35-million-payout-from-irs-to-100-tea-party-groups-t.html

Hackers are illegally generating Monero, Bitcoin and other cryptocurrencies by exploiting a software flaw that was leaked from the U.S. government ---
https://www.bloomberg.com/news/articles/2018-09-19/hackers-target-bitcoin-with-leaked-nsa-software-tip-report-says?cmpid=BBD091918_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180919&utm_campaign=bloombergdaily

Publication Bias:  Publish the Positives and Bury the Negatives ---
https://www.nytimes.com/2018/09/24/upshot/publication-bias-threat-to-science.html

Jensen Comment
Since some top academic accounting research journals will not publish replications they even discourage validity testing altogether ---
http://faculty.trinity.edu/rjensen/TheoryTAR.htm

The first of three criminal trials (including Kansas and Louisville) on alleged corruption  (bribary) in college basketball begins next week ---
https://www.wsj.com/articles/criminal-trial-to-cap-off-tumultuous-year-in-ncaa-basketball-1538040600?elqTrackId=1f925fcd490b4ac9bbf1d8e03627a755&elq=957b455e7e11453e8fb1a013b776c4ce&elqaid=20703&elqat=1&elqCampaignId=9767

Sexual harassment and the syllabus.

The fall semester is here, and it’s brought along some urgent questions for professors: What context should they provide when teaching works by scholars accused of sexual harassment? Is it appropriate to teach such texts at all (written by those scholars)? Lindsay Ellis examines how the accusations against Avital Ronell are playing out on the syllabus and in the classroom.

Purdue drops faculty NDA.

Purdue University Global will no longer require its faculty members to sign a nondisclosure agreement. The university drew scrutiny after reports that professors had to sign a four-page document prohibiting them from discussing such things as "course materials" and "methods of instruction." The contract also included a one-year noncompete clause. Administrators say the requirement was a legacy of Kaplan University, the for-profit institution that Purdue University acquired this year to create Purdue Global. Before the NDA was dropped, our Goldie Blumenstyk wrote some smart observations on what its presence signaled about corporate influence in higher ed.

Quick hits.

·         The University of Missouri's policy prohibiting concealed firearms on the campus — including in locked vehicles — does not conflict with state law, a judge ruled.

·         An Ohio State University graduate student is suing the university and the director of its Center for Automotive Research, alleging that he sexually harassed and retaliated against her.

·         Within four years of being presented at an academic conference, an article stands a 5 percent greater chance of being cited, according to a new study.

·         Temple University's Fox School of Business understated student debt figures to U.S. News & World Report for the publication's annual MBA rankings.

·         A fund to help victims of Larry Nassar get counseling, shut down after claims of fraud, is being investigated by the Michigan State University police.

·         A committee of the American Association of University Professors will formally investigate Maricopa County Community College for apparent violations of academic standards.

Monmouth University has indefinitely suspended its entire fraternity and sorority system.

Temple reveals that scandal over false information submitted for rankings of its online M.B.A. was much broader than earlier known. Dean, found to have dismantled Temple's system for checking accuracy of data, is ousted ---
https://www.insidehighered.com/news/2018/07/10/temple-ousts-business-dean-after-report-finds-online-mba-program-years-submitted?utm_source=Inside+Higher+Ed&utm_campaign=e8cdd4a1a8-DNU_COPY_01&utm_medium=email&utm_term=0_1fcbc04421-e8cdd4a1a8-197565045&mc_cid=e8cdd4a1a8&mc_eid=1e78f7c952

Why Chicago’s reported progress on pensions and finances is fake ---
http://listserv.aaahq.org/cgi-bin/wa.exe?A2=ind1807C&L=AECM&X=95E0B2FD67EA19EFDE&Y=rjensen%40trinity.edu&P=39630

Now Facing Criminal Charges:  The Colorado State University professor managed to get a $5,000 raise, until the university suspected his competing job offer was fake ---
https://www.chronicle.com/article/This-Professor-Made-Up-a-Job/243873?cid=at&utm_source=at&utm_medium=en&elqTrackId=7a4e0c4fd84b46a8a896f31b0c3eb6ae&elq=fb995e29986f47cfb634c9d6400d9d73&elqaid=19688&elqat=1&elqCampaignId=9082

Jensen Comment
Years ago there was a rumor that a famous Operations Research professor did something similar when negotiating a salary to move to Northwestern University --- by inflating the purported salary offer from another university. Northwestern supposedly advised him to take the other offer.

The ugly scandal that cancelled the Nobel prize for literature ---
https://www.theguardian.com/news/2018/jul/17/the-ugly-scandal-that-cancelled-the-nobel-prize-in-literature

Indictment Alleges Bribery in Admissions at Penn ---
https://www.insidehighered.com/admissions/article/2018/07/23/indictment-charges-coach-was-bribed-get-applicant-penn?utm_source=Inside+Higher+Ed&utm_campaign=16fd5b76fd-DNU_COPY_01&utm_medium=email&utm_term=0_1fcbc04421-16fd5b76fd-197565045&mc_cid=16fd5b76fd&mc_eid=1e78f7c952

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

NYT:  The Gender War Is On! And Fake ---
https://www.nytimes.com/2018/07/02/opinion/gender-war-voting-equality-economics-family.html?algo=als1&cmpid=73&module=newsletter-opinion&nl=personalization&nlid=10527319&rank=2&recid=171E1wqLfiD9O3jU3oHCGbxodIb

Years ago, people used to believe that gender equality would produce gender similarity. That is to say, people used to believe that as women and men enjoyed more equal opportunities and earned similar pay, men and women would see the world in similar ways.

It hasn’t worked out that neatly.

In the Nordic countries, where gender equality is highest, unexpected differences have opened up between men and women. In what Nima Sanandaji calls the Nordic paradox, companies in those countries have fewer female business managers, not more.

It seems that when egalitarian welfare states give people more choices, many women take advantage of those choices by dropping out of the rat race.

In this country we see a different sort of paradox. As economic disparities between men and women have narrowed, political disparities have widened, at least among millennials. Over the past few decades, the U.S. has made steady strides toward gender equality, and millennials live in the most gender-equal cohort in our society. Yet, at least when it comes to politics, millennial men and women see things in starkly different ways.

 

In 2016, female voters under 30 years old voted for Hillary Clinton over Donald Trump 63 percent to 31 percent. Males in the same age cohort gave Clinton a much smaller edge, voting for her 46 percent to 42 percent. That’s a 17-point gender gap.

Since the election, the gap in leanings has gotten even bigger, as white male millennials have shifted to the G.O.P. A recent Pew survey of midterm party preference suggests that women under 35 tilt Democratic by an astounding 68 percent to 24 Republican. Men under 35 now tilt Republican 50 percent to 47 percent Democratic.

As Ed Kilgore pointed out in New York magazine, that’s a 21-point gender gap in Democratic support and a 26-point gender gap in Republican support. More than ever, millennials are staggeringly divided by gender, while older generations show far smaller differences.

What is going on here?

Perhaps two interrelated stories:

Female mobilization. If you look at the research, you find that millennials are not so divided on gender roles. Both sexes increasingly favor a feminist attitude in the workplace and a neotraditionalist attitude at home. They want both sexes to have equal opportunities at work, but year by year more young people believe that the best home is the one where the man is the outside “achiever” and the working woman is the primary caregiver. In 1994, for example, 42 percent of high school seniors believed this; by 2014, 58 percent did.

Trump and the #MeToo movement have brought the workplace side of that consensus to the top of mind, at least among young women. According to an MTV-Public Religion Research Institute survey, 63 percent of women ages 15 to 24 say there is a lot of discrimination against women at work, while only 43 percent of young men say that.

 

These young women have become highly mobilized. Fifty percent of women respondents had posted on social media on a public cause over the preceding 12 months, while 48 percent had signed an online petition. Most young men and women, according to the MTV-PRRI research, see marches negatively, though many women call them “inspiring” or “powerful.” Men, on the other hand, tend to dismiss them as “counterproductive,” “pointless,” “divisive” or even “violent.”

This brings us to the second story, the male backlash. When covering any social movement, it’s always important to pay attention to the people standing on the sidelines. These days, that would more often be young men.

An increasing number of high school-educated men say they are the ones being screwed by modern society, not women, who are better educated on average. More and more college-educated men adopt a Jordan Peterson-style posture, arguing that the assault on “male privilege” has gone too far, that the feminist speech and behavior codes have gone too far.

This has led first to a reassertion of male victimization. Millennial women are much more likely than Gen X, Boomer or Silent Generation women to say that men have it easier in society. This seems to have led a lot of millennial men to counter that, in fact, it’s men who face the high burdens — to provide financially, to be tough, to be successful in their careers.

Continued in article

Teaching Case From The Wall Street Journal Weekly Accounting Review on July 20, 2018

Former Energy XXI CEO Settles SEC Probe Over Hidden Loans, Perks

By Dave Michaels | Jul 17, 2018

TOPICS: Disclosure, Related-party transactions

SUMMARY: The article discusses Energy XXI Ltd. and its former chief executive who participated in related party transactions that went undisclosed. The company went bankrupt following the sharp drop in oil prices; it has since emerged as Energy XXI Gulf Coast Inc. The individuals involved were subjected to Securities and Exchange Commission inquiry and ultimately fined. The company states that it has improved its corporate governance practices, internal controls, and disclosure procedures.

CLASSROOM APPLICATION: The article may be used to discuss related party transactions in an auditing class.

QUESTIONS: 

	1. (Introductory) Based on the information in the article, how much in loans to the former CEO of Energy XXI Ltd. went unreported to the SEC?
	2. (Advanced) What are related parties? What auditing standards apply to this issue? (Reference PCAOB or AICPA auditing standards as your professor instructs.)
	3. (Advanced) Why must an auditor be concerned about related party transactions? Specifically cite the risks associated with related party transactions.
	4. (Advanced) How are these risks evident at Energy Xxi Gulf Coast Inc. as described in this article?
	5. (Introductory) According to the article, what has Energy XXI Gulf Coast Inc. done to address the issues that arose with related party transactions prior to its bankruptcy?

READ THE ARTICLE

 

Reviewed By: Judy Beckman, University of Rhode Island

 

"Former Energy XXI CEO Settles SEC Probe Over Hidden Loans, Perks," by Dave Michaels,  The Wall Street Journal, July 17, 2018
https://www.wsj.com/articles/former-energy-xxi-ceo-settles-sec-probe-over-hidden-loans-perks-1531768858?mod=djem_jiewr_AC_domainid

John Schiller, ex-chief of oil driller, agrees to five-year ban as corporate officer and will pay $180,000

The former chief executive of offshore oil and gas driller Energy XXI Ltd. , once the largest publicly traded shallow-water Gulf of Mexico producer, settled an investigation into more than $10 million in undisclosed loans he took from contractors and a portfolio manager at the firm’s largest shareholder.

John Schiller agreed to a five-year ban as a corporate officer of a public company and will pay $180,000 to settle the Securities and Exchange Commission probe. The SEC on Monday alleged that Mr. Schiller failed to disclose that he traded business contracts for personal loans when he needed cash to meet margin calls on other loans he took.

Mr. Schiller was a prominent player in Houston business and civic circles. He and his wife, the founder of a charity that helps place trained dogs at law-enforcement agencies, once had a float in California’s Rose Parade for the organization.

Mr. Schiller served on the host committee for the 2017 Super Bowl that was staged in Houston.

The SEC alleged Mr. Schiller struggled to keep up “an extravagant lifestyle” that required spending millions on his mansion, a ranch, racehorses, and donations to Texas A&M University. To pay for it, he had borrowed more than $23 million against his shares in Energy XXI, the SEC said.

Energy XXI declared bankruptcy in April 2016 after a historic drop in oil and gas prices. The company’s board ousted Mr. Schiller as chief executive in February 2017.

The SEC said Energy XXI also failed to tell shareholders about at least $1 million in perks and personal expenses incurred by Mr. Schiller, including first-class travel, a $36,000 shoe-shopping spree, donations to preferred charities, legal expenses for personal matters and an office bar stocked with high-end liquor and cigars.

“Mr. Schiller cooperated fully with the SEC and its investigation and is happy to put this matter behind him with this settlement,” said Barrett Reasoner, an attorney for Mr. Schiller at Gibbs & Bruns LLP.

Mr. Schiller also didn’t disclose a $3 million loan he took from Norman Louie, a former portfolio manager at Mount Kellett Capital Management LP, which once held 8.4% of Energy XXI’s stock, the SEC said.

Mr. Louie got a seat on Energy XXI’s board weeks after he provided Mr. Schiller with the loan, the SEC said. Mr. Louie ceased working for Mount Kellett, a private-equity and hedge-fund manager, in March 2015, the SEC said.

Mr. Louie agreed to pay $100,000 to settle the SEC probe. Mount Kellett will pay a $160,000 penalty, the SEC said.

Continued in article