"Wake Will" and Bzzz

[DistrictDeacon]

But feel free to assume you are more equipped to reach the conclusion as to whether Casstevens was qualified or not than those who hired him. You know, based on what you read on the internet, surely you have all the facts about what went down at KK.

It's not like SEC decisions aren't easily found on the internet.

"Between approximately February 2003 and December 2003, Casstevens, in a departure from Generally Accepted Accounting Principles, improperly accounted for Krispy Kreme’s Senior Executive Incentive Compensation Plan by improperly under-accruing or reversing amounts for the Company’s quarterly incentive compensation expense, thereby misrepresenting the Company’s earnings. In addition, in Company filings and analyst conference calls, Casstevens misrepresented the Company’s financial performance and failed to disclose that but for these under-accruals and reversals, the Company would have failed to exceed its previously announced quarterly earnings per share guidance by one penny in the affected quarters. As a result of his actions, Krispy Kreme filed materially false and misleading financial information for the fourth quarter of the Company’s 2003 fiscal year in the Company’s Form 10- K for the year ended February 2, 2003, in various current reports filed during the relevant periods, and in the Company’s quarterly reports on Form 10-Q for the first three quarters of the Company’s 2004 fiscal year."

 

[Dillon Fence]

This actually proves my point. When you sign a 10K as a CFO / Officer you are becoming personally liable for what is in the 10K. If Casstevens actively cooked the books he'd lose his license permanently and have faced jail. The SEC got him for failing to properly supervise, essentially. They always call the CFO by name as the person having "committed the crime" because they signed the filing and asserted it was correct. Based on his knowledge, he likely thought it was, thus the light penalties.

 

[Strickland33]

This actually proves my point. When you sign a 10K as a CFO / Officer you are becoming personally liable for what is in the 10K. If Casstevens actively cooked the books he'd lose his license permanently and have faced jail. The SEC got him for failing to properly supervise, essentially. They always call the CFO by name as the person having "committed the crime" because they signed the filing and asserted it was correct. Based on his knowledge, he likely thought it was, thus the light penalties.

 

[thedeacfan]

Culture!

FWIW..a lot of government finance regs I run into are applied whether something is inadvertent or not (so the auditors tell me) and I imagine the SEC is no different. Not knowing the circumstances, I'd go with the board's decision.

Here are some "circumstances" for you from the SEC.

"Specifically, bonuses for all executive officers were contingent upon the Company meeting or exceeding goals for two performance measures: (i) the attainment of a certain level of return on assets, measured by earnings before interest, taxes and depreciation and amortization, and (ii) a percentage increase in earnings per share of common stock."

"This resulted in the Company having sufficient earnings to report EPS of $0.22—or EPS guidance for the first quarter plus $.02— and to allow Casstevens to accrue $2,050,001 in incentive compensation."

"On August 25, 2003, Casstevens entered a Rule 10b5-1 plan covering 24,000 Krispy Kreme shares that he already owned and that were sold two business days later. Although Casstevens initially entered a Rule 10b5-1 plan covering only 18,000 of his shares on or about August 23, 2003, he executed a new plan on August 25, 2003 for 24,000 shares. In his plan, Casstevens directed that his shares be sold at a limit order price of $40 per share."

There's a multi-million dollar set of "circumstances" for you.

It looks like crime pays if you are a CPA...

And if you're one of the good ole boys, you get your license back. Then you can get hired by your friend Ron Wellman as part of the new "integrity free" culture at Wake Forest University.

 

[ChrisL68]

Here are some "circumstances" for you from the SEC.

"Specifically, bonuses for all executive officers were contingent upon the Company meeting or exceeding goals for two performance measures: (i) the attainment of a certain level of return on assets, measured by earnings before interest, taxes and depreciation and amortization, and (ii) a percentage increase in earnings per share of common stock."

"This resulted in the Company having sufficient earnings to report EPS of $0.22—or EPS guidance for the first quarter plus $.02— and to allow Casstevens to accrue $2,050,001 in incentive compensation."

"On August 25, 2003, Casstevens entered a Rule 10b5-1 plan covering 24,000 Krispy Kreme shares that he already owned and that were sold two business days later. Although Casstevens initially entered a Rule 10b5-1 plan covering only 18,000 of his shares on or about August 23, 2003, he executed a new plan on August 25, 2003 for 24,000 shares. In his plan, Casstevens directed that his shares be sold at a limit order price of $40 per share."

There's a multi-million dollar set of "circumstances" for you.

It looks like crime pays if you are a CPA...

And if you're one of the good ole boys, you get our license back. Then you can get hired by your friend Ron Wellman as part of the new "integrity free" culture at Wake Forest University.

What are you basing this on again? That's a mighty strong accusation based on no evidence. Needless to say that if the SEC agreed with your "findings" he would have been permanently barred from practicing before the SEC. He wasn't.

 

[thedeacfan]

What are you basing this one again? That's a mighty strong accusation based on no evidence.

The actual SEC complaint I quoted from is evidence and it is certainly enough to establish a prima facie case for message board consumption.

 

[DistrictDeacon]

This actually proves my point. When you sign a 10K as a CFO / Officer you are becoming personally liable for what is in the 10K. If Casstevens actively cooked the books he'd lose his license permanently and have faced jail. The SEC got him for failing to properly supervise, essentially. They always call the CFO by name as the person having "committed the crime" because they signed the filing and asserted it was correct. Based on his knowledge, he likely thought it was, thus the light penalties.

That was really nice of this phantom employee to cook the books so that Casstevens could personally benefit.

I wonder why that "person" was never prosecuted.

 

[ChrisL68]

The actual SEC complaint I quoted from is evidence and it is certainly enough to establish a prima facie case for message board consumption.

And what does that have to do with your conclusion that Casstevens was allowed to reapply for his license because he was a "good ole boy?"

 

[DistrictDeacon]

What are you basing this on again? That's a mighty strong accusation based on no evidence. Needless to say that if the SEC agreed with your "findings" he would have been permanently barred from practicing before the SEC. He wasn't.

Um...those are directly from SEC materials. Of course they agree with something they produced.

 

[thedeacfan]

And what does that have to do with your conclusion that Casstevens was allowed to reapply for his license because he was a "good ole boy?"

You're a CPA. You cook the books for substantial personal gain. And then you get away with the loot and a slap on the wrist. I guess there could be other, more nefarious, reasons than being a "good ole boy".

 

[ChrisL68]

So you guys believe that the SEC ultimately determined that Casstevens cooked the books of a public company so that he could personally benefit and then didn't permanently bar him from practicing in front of the SEC?

If that's what they concluded, he would have had much bigger worries than permanently barred status with the SEC. He would have been in a federal court trying to stay out of prison.

OK.

 

[ChrisL68]

You're a CPA. You cook the books for substantial personal gain. And then you get away with the loot and a slap on the wrist. I guess there could be other, more nefarious, reasons than being a "good ole boy".

LOL OK, whatever you say.

 

[coredeac]

This actually proves my point. When you sign a 10K as a CFO / Officer you are becoming personally liable for what is in the 10K. If Casstevens actively cooked the books he'd lose his license permanently and have faced jail. The SEC got him for failing to properly supervise, essentially. They always call the CFO by name as the person having "committed the crime" because they signed the filing and asserted it was correct. Based on his knowledge, he likely thought it was, thus the light penalties.

Look. We get you're the guy's best buddy and his shit doesn't stink. Thanks. Let's please move on.

 

[thedeacfan]

So you guys believe that the SEC ultimately determined that Casstevens cooked the books of a public company so that he could personally benefit and then didn't permanently bar him from practicing in front of the SEC?

If that's what they concluded, he would have had much bigger worries than permanently barred status with the SEC. He would have been in a federal court trying to stay out of prison.

OK.

Maybe he ratted out his co-conspirators for lenient treatment. Of course that just makes him a crook and a rat who should not be employed at MSD.

 

[Dillon Fence]

Maybe he ratted out his co-conspirators for lenient treatment. Of course that just makes him a crook and a rat who should not be employed at MSD.

Sounds like you are on to something. Nice work.

 

[ChrisL68]

Maybe he ratted out his co-conspirators for lenient treatment. Of course that just makes him a crook and a rat who should not be employed at MSD.

Yeah, and they liked him so much that they are going to let him reapply to practice in front of the SEC in two years.

I don't think the guy should have ever been hired by MSD, but rjkarl would be proud of some of these mental gymnastics.

 

[TBR]

This actually proves my point. When you sign a 10K as a CFO / Officer you are becoming personally liable for what is in the 10K. If Casstevens actively cooked the books he'd lose his license permanently and have faced jail. The SEC got him for failing to properly supervise, essentially. They always call the CFO by name as the person having "committed the crime" because they signed the filing and asserted it was correct. Based on his knowledge, he likely thought it was, thus the light penalties.

So why did we hire someone who did not have proper oversight over his department?

I just don't get it. I'm sure there were plenty of eligible candidates, probably many with Wake connections, who wouldn't have had SEC record. NC isn't exactly lacking in finance talent.

 

[ChrisL68]

So why did we hire someone who did not have proper oversight over his department?

I just don't get it. I'm sure there were plenty of eligible candidates, probably many with Wake connections, who wouldn't have had SEC record. NC isn't exactly lacking in finance talent.

I agree with this. No reason to concoct some reality where he is this criminal mastermind that doesn't mesh with the facts and outcomes to question this hiring decision. At the end of the day, his reputation was tarnished and perception is everything for a CPA.

 

[pourdeac]

And if you're one of the good ole boys, you get your license back. Then you can get hired by your friend Ron Wellman as part of the new "integrity free" culture at Wake Forest University.

People are thrown in jail if the SEC finds things happening the way you believe they found it happening from their statements. The SEC is not some sort of NC good ole boy network that I am aware of.

 

[TheReff]

The "Wake Will" campaign hit me with an email today, which was preceded by a fancy brochure last month. I decided a year ago that I would not send any donation dollars to any Wake campaign, or the Deacon Club, as long as Bzzz is our basketball coach. Have any of you made such a resolution? Am I hurting the University as a whole by not donating?

And as long as Wellman is our AD with his ego ruining everything that is athletics. RW was just lucky that Jim Grobe came along to win a title and build the Tower, otherwise RW would have nothing. He got rid of 2 coaches with 5 ACC titles between them and treated both of them horribly. Now, what goes around comes around and he is getting his just do with Bz & basketball.