Deloitte sued for $7.

6 billion, accused of missing fraud

By Kevin Gray
Tue Sep 27, 2011 7:51am EDT

(Reuters) - Deloitte Touche Tohmatsu Ltd DLTE.UL, the world's largest accounting and consulting firm, was accused on Monday of failing to detect fraud during its audits of one of the biggest private mortgage firms to collapse during the U.S. housing crash.
A trust overseeing the bankruptcy of Taylor, Bean & Whitaker Mortgage Corp, or TBW, and one of the company's subsidiaries filed complaints in a Miami Circuit Court claiming a combined $7.6 billion in losses. Deloitte "certified TBW as a solvent, viable company with accurate financial statements every year from 2001 to 2008," one of the complaints said. "Despite Deloitte's credentials and expertise as one of the 'Big 4' accounting firms, those statements -and the rosy picture they depicted of TBW -- were completely false," it said. Deloitte spokesman Jonathan Gandal said the "claims are utterly without merit." It was the latest lawsuit to hit one of the major accounting firms over their role in the credit crisis. Pricewaterhouse Coopers, KPMG and Ernst & Young are also facing accusations about their auditing standards by investors who collectively seek to recoup billions of dollars lost in the financial meltdown. Lee Farkas, the former chairman of Taylor, Bean and Whitaker, was sentenced to 30 years in prison in April for masterminding what U.S. officials described as one of the biggest bank frauds ever. U.S. Justice Department officials said Farkas ran a $2.9 billion fraud scheme that led to TBW's downfall and the collapse of one of the largest U.S. regional banks, Colonial Bank. The complaint filed by Neil F. Luria, a plan trustee of Taylor, Bean & Whitaker Trust, claims losses of approximately $6 billion. A second complaint by Ocala Funding, a wholly owned TBW subsidiary which served as a lending facility, claims losses of $1.6 billion. Farkas was accused of running a wide-ranging scheme to cover up large losses at Taylor, Bean, which was based in Ocala, Florida, by moving funds between accounts at Colonial Bank and also by selling mortgage loans that either did not exist, were worthless or had already been sold. "Deloitte missed this fraud because it simply accepted management's conflicting, incomplete and often last-minute explanations of highly-questionable transactions, even though those explanations made no sense and were flatly contradicted by the documents in Deloitte's possession," the complaint by Ocala Funding said. "Ocala relied on Deloitte to detect material misstatements in the financial statements due to error or fraud," the complaint said. Gandal said the plaintiffs in the cases were "companies through which convicted felon Lee Farkas and his co-conspirators committed their crimes." "The bizarre notion that his engines of theft are entitled to complain of injury from their own crimes and to sue the outside auditors they lied to defies common sense, not to mention the law," he said in a statement. Several other Taylor, Bean and Colonial Bank employees who pleaded guilty for their roles in the fraud were also sentenced earlier this year.

Type

UK private company, limited by guarantee

Industry

Professional services

Founded

London, England, U.K. (1845)

Founder(s)

William Welch Deloitte

Headquarters

Paramount Plaza, New York City, New York,U.S.

Area served

Worldwide

Key people

Stephen Almond (Chairman) Barry Salzberg (CEO)[1]

Services

Audit Consulting Financial advisory Tax Enterprise Risk

Revenue

US$28.8 billion (2011)

Employees

182,000 (September 2011)

Website

Deloitte.com/global

HOW IT STARTEDIn 1845 William Welch Deloitte opened an office in Basinghall Street in London. Deloitte was the first person to be appointed an independent auditor of a public company. He went on to open an office in New York in 1880. In 1896 Charles Waldo Haskins and Elijah Watt Sells formed Haskins & Sells in New York. In 1898 George Touche established an office in London and then in 1900 joined John Ballantine Niven in establishing the firm of Touche Niven in the Johnston Building at 30 Broad Street in New York. At the time, there were fewer than 500 CPAs practicing in the United States, but the new era ofincome taxes was soon to generate enormous demand for accounting professionals. On April 1, 1933, Colonel Arthur Hazelton Carter, President of the New York State Society of Certified Public Accountants and Managing Partner of Haskins & Sells, testified before the U.S. Senate Committee on Banking and Currency. Carter helped convince Congress that independent audits should be mandatory for public companies. In 1947, Detroit accountant George Bailey, then president of the American Institute of Certified Public Accountants, launched his own organization. The new entity enjoyed such a positive start that in less than a year, the partners merged with Touche Niven and A.R. Smart to form Touche, Niven, Bailey & Smart. Headed by Bailey, the organization grew rapidly, in part by creating a dedicated management consulting function. It also forged closer links with organizations established by the co-founder of Touche Niven, George Touche: the Canadian organization Ross and the British organization George A. Touche. In 1960, the firm was renamed Touche, Ross, Bailey & Smart, becoming Touche Ross in 1969. At the time of the US-led mergers to form Deloitte & Touche, the name of the international firm was a problem, because there was no worldwide exclusive access to the names "Deloitte" or "Touche Ross" key member firms such as Deloitte in UK and Touche Ross in Australia had not joined the merger. The name DRT International was therefore chosen, referring to Deloitte, Ross and Tohmatsu. In 1993 the international firm was renamed Deloitte Touche Tohmatsu to reflect the contribution from the Japanese firm, as well as agreements to use both of the names Deloitte and Touche. In 1995, the partners of Deloitte & Touche decided to create Deloitte & Touche Consulting Group (now known as Deloitte Consulting). In 2002, Arthur Andersen's UK practice, the firm's largest practice outside the U.S., agreed to merge with Deloitte's UK practice. Andersen's practices in Spain, the Netherlands, Portugal, Belgium, Mexico, Brazil and Canada also agreed to merge with Deloitte. The spin off of Deloitte France's consulting division led to the creation of Ineum Consulting.

In 2009, Deloitte purchased the North American Public Service practice of BearingPoint (formerly KPMG Consulting) after it filed for bankruptcy protection. The firm also took over the UK property consultants Drivers Jonas in January 2010. In 2011, Deloitte acquired DOMANI Sustainability Consulting and ClearCarbon Consulting in order to expand its sustainability service offerings.

ABOUT DELOITTE Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is one of the Big Four accountancy firms along with PricewaterhouseCoopers (PwC), Ernst & Young, and KPMG. Deloitte is the largest professional services firm in the world, with 182,000 employees in more than 150 countries providing audit, tax, consulting, enterprise risk and financial advisory services. In FY 2011, Deloitte earned a record $28.8 billion USD in revenues, ranking second behind PwC's record $29.2 billion. Its global headquarters is located in Paramount Plaza, Midtown Manhattan, New York City, New York. The Big Four are the four largest international accountancy and professional services firms, which handle the vast majority of audits for publicly traded companies as well as many private companies, creating an oligopoly in auditing large companies. The Big Four firms are shown below, with their latest publicly available data: Firm Revenues Employees Fiscal Year Headquarters

Deloitte Touche Tohmatsu

$28.8bn

182,000

2011

United States

PwC (officially PricewaterhouseCoopers)

$29.2bn

169,000

2011

United Kingdom

Ernst & Young

$22.9bn

152,000

2011

United Kingdom

KPMG

$20.6bn

138,000

2010

The Netherlands

Deloitte to consultant NTPC on operational revamp

Published on Tue, Oct 11, 2011 at 13:33 | Source : PTI

The country's largest thermal power producer NTPC may soon appoint Deloitte as a consultant on revamping its operations and human resources development. "NTPC is likely to appoint Deloitte as a consultant for preparing its restructuring plans, which would include the company's new mining plans, manpower management, etc," a Power Ministry official said. Deloitte is believed to have made a presentation to the company on taking up the job, which would also involve an analysis of the proposed restructuring of NTPC joint ventures -- including NTPC-SAIL Power Company Ltd, NTPC Tamil Nadu Energy Company Ltd, Ratnagiri Gas & Power Ltd, NTPC-Alstom Power Services Ltd, NTPC-SCCL Global Ventures Ltd, International Coal Ventures Ltd and NTPC BHEL Power Projects Pvt Ltd -- the official added. NTPC plans to expand its existing power capacity of over 35,000 MW to about 66,000 MW by 2017. The company planned to raise its capacity to 75,000 MW by the end of the 12th Five-Year Plan (201217), but it had to curtail the target due to non-availability of gas and coal and land acquisition issues. NTPC currently employs approximately 26,000 people. It will seek the consultant's advice on streamlining its present workforce and how to make the best use of manpower. The consultant would also advice the company on its coal mining venture. NTPC has been awarded coal blocks and is expected to start excavation from those blocks in the near-term. Meanwhile, NTPC has signed a preliminary agreement with Birla Institute of Management & Technology (BIMTECH) to jointly explore opportunities related to capacity building, institution development and training and development programmes with a view to strengthen ties between industry and educational institutes.

In India
In India, we offer a range of Audit & Enterprise risk, Tax, Consulting and Financial advisory services across thirteen cities. Our existence for over a century in the Indian professional arena supplements the technical proficiency of the client service teams to create powerful business solution tailored to the client's need. We focus on clients. We take pride in our ability to provide quality services - whether they are an ownermanaged business or a large multinational corporation. We are a multi-skilled, multi-disciplined firm, offering clients a wide range of industry-focused business solutions. We recruit the brightest and the best - whatever their specialisation. We combine the dynamism and fluidthinking of the young graduate, with the business knowledge and insight of the seasoned executive. Investing in our people means our clients get world-class expertise to solve their complex business problems.

Al Hilal Bank teams up with Deloitte to fulfill professional aspirations of Emiratis

Oct 16, 2011 - 01:00 WAM Abu Dhabi, Oct. 16th, 2011 (WAM) -- In line with its commitment to the professional development of UAE Nationals, Al Hilal Bank has signed a fellowship Memorandum of Understanding (MoU) with Deloitte, the second largest private professional services organization in the world. The details of the MoU were revealed to the public during a press conference held today at the Mall Branch in Abu Dhabi. Al Hilal Bank initiated the program to give its present and future Emirati employees the exclusive opportunity to become Chartered Accountants through the Deloitte Fellowship Programme. The bank will select 10 candidates per year who will be trained by Deloitte for up to three years in preparation for the ACCA (Association of Chartered Certified Accountants) or US CPA (Certified Public Accountant) qualifying examinations. Candidates enrolled in the programme will be considered Al Hilal employees and will be seconded to Deloitte for a period of three years, during which they will qualify for certification and log three years of practical training. Students will spend one month of each year at Al Hilal to learn about the bank, its culture and its policies and procedures. After successfully completing their training the Emirati graduates will return to take up suitable positions at Al Hilal Bank. The initiative forms part of Al Hilal Bank's efforts to play an active role in securing a brighter future for the UAE. The bank is tapping its extensive regional and global partnerships to secure unique professional development opportunities for customers as well as the general public. "Our MoU with Deloitte is yet another realisation of our vision to contribute to the development of Emirati talents to enable them to successfully play a role in achieving sustainable economic growth in the UAE, as well as give them the opportunity to hold leading positions within Al Hilal Bank," said Mohamed Jamil Berro, CEO of Al Hilal Bank. "During its 85-year presence in the Middle East, Deloitte has played a vital role in the growth of the region. We already have in place the Deloitte Emirati Fellowship Program that is designed to specifically target Emirati youth. Al Hilal Bank's candidates will simultaneously benefit from Deloitte's graduate training program and on-the-job training, which provide exposure to expertise and experience with governments, regulators, and businesses," said Wissam Moukahal, Audit Partner at Deloitte Middle East.

"Deloitte is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, and tax services to selected clients. These firms are members of Deloitte Touche Tohmatsu Limited (DTTL), a UK private company limited by guarantee. Each member firm provides services in a particular geographic area and is subject to the laws and professional regulations of the particular country or countries in which it operates. DTTL does not itself provide services to clients. DTTL and each DTTL member firm are separate and distinct legal entities, which cannot obligate each other. DTTL and each DTTL member firm are liable only for their own acts or omissions and not those of each other. Each DTTL member firm is structured differently in accordance with national laws, regulations, customary practice, and other factors, and may secure the provision of professional services in its territory through subsidiaries, affiliates, and/or other entities.

Services
We bring a unique combination of business, functional and technical expertise that allow our clients to better align their business objectives and strategies with the need of todays competitive market. We serve Indian business houses, multinational corporations and the public sector and provide assistance to global clients seeking to develop local businesses and expand into emerging markets such as India. Our edge lies in our ability to draw upon a well equipped global network and teaming this with customised services of a local office. Our integrated approach combines insight and innovation from multiple disciplines with business and industry knowledge to help our clients excel anywhere irrespective of geographical boundaries. We offer a broad range of fully integrated services in the following areas:

Audit and Enterprise risk services: Our Audit and Enterprise Risk Service professionals provide a range of audit and advisory services to assist clients in achieving their business objectives, managing their risk and improving their business performance. Consulting: Our consulting group works closely with you to deliver measurable/ quantifiable improvement in business performance; drive shareholder value and create sustainable competitive advantage.

Financial advisory: Our FA practice takes on an industry vertical approach. It draws upon its pool of experts both in India and abroad specialising in various industries. Tax: Our tax professionals will keep you aware of developments that may affect your business, and also help you interpret their significance and integrate a plan into your business strategy.

MEGA and Deloitte Experts Team up on GRC Webinar

Industry experts will discuss business optimization

BOSTON, Oct 14, 2011 (BUSINESS WIRE) -- Governance, risk, and compliance (GRC) experts from MEGA will discuss how to achieve business optimization through the adoption of integrated GRC practices at a featured Webinar on October 27, 2011 at 1:30 pm EDT. The program is designed for GRC executives and directors of risk, compliance, and audit, as well as business analysts and process professionals. Patrick Wells, director of GRC business development, MEGA, will moderate a discussion with Daniel Hebda, vice president, MEGA, and guest speaker, Jeffrey Recor, senior manager, Security & Privacy Solutions, Deloitte & Touche LLP. Hebda has worked with large multinational companies, guiding business process optimization and GRC projects since 2001. For several years, he owned a technology consulting firm. Recor has over 20 years in the security field with a current focus on GRC initiatives. He participated in the creation of the Information Assurance Center at Walsh College (a NSA Center of Excellence), as well as the development of several security industry certification programs. The discussion topics are for companies facing a multitude of GRC challenges, such as managing a constantly evolving list of regulatory requirements and avoiding duplication of business risk and control efforts. The speakers will also demonstrate how to satisfy board and shareholder expectations with regard to GRC, mitigate incidents and loss events, and minimize exposure to regulatory penalties. The MEGA Suite provides EGRC solutions that help companies gain control over their operations and maximize business performance within acceptable risk levels. It is used by leading companies to strengthen risk analysis, coordinate GRC processes, and establish a corporate governance approach to managing risk. The MEGA Suite enables organizations to design, test, monitor, and manage GRC information. MEGA is the only company in the GRC industry with 20 years of expertise in business process improvement. This provides a strong foundation for highly efficient and effective GRC solutions.

MEGA was named a visionary in the July 2011Gartner Magic Quadrant for Enterprise Governance, Risk and Compliance Platforms. Chartis Research called MEGA a leading vendor in completeness of offering and market share potential in the enterprise operational risk and GRC solution provider category in their report, Operational Risk & GRC Software Solutions 2010. MEGA has also been cited by Forrester Research, Inc. in their GRC reports. Following this event, Wells will speak at the GSMI GRC Summit in Boston on November 1-3. About MEGA MEGA International provides software solutions for GRC, internal audit and compliance, enterprise and operational risk management, business architecture, business process analysis, and enterprise architecture. Based on the powerful MEGA Suite technology, Clients include Aetna, BAE Systems, Cardinal Health, Choice Hotels, Cox Enterprises, JC Penney, Medco Health Solutions, Nissan, and Procter & Gamble. www.mega.com . SOURCE: MEGA International

Deloitte Access Economics Report Anticipates Rise in Dementia Cases

Today, release of a Deloitte Access Economics report has revealed surprising number of dementia cases in the country and anticipated an alarming hike almost double during next 10 years, taking figure to 385,000 people. In addition, the report has insisted that 48,674 Queenslanders were observed with dementia in 2011 and by the end of 2050 it is expected to go beyond 215,272. As an attempt to hail the authorities to implement some immediate measures in order to address the issue, Alzheimers Australia had decided to lead a march on Parliament House. The marching group is urging the government to increase the dementia funding through an investment of not less than $500 million, during the next five years. In addition, they have also accused the Gillard government for not considering the sever health condition as one of the important health issues. While talking about the move, the Chief Executive of Alzheimers Australia, Victoria Beedle warned that this is high time to take any step otherwise the state would be facing a tough situation in next decades, with the aging population. Further, Victoria Beedle has also pinpointed southern retirees migration for raising the figure, especially across beachside coastal areas in Wide Bay as well as Gold and Sunshine coasts. "Going forward we know there are going to be less tax payers versus number of retirees in Australia and someone has to foot the bill, Ms. Victoria Beedle added.

Deloitte to advise Tikona for market strategy in enterprise segment

MUMBAI, SEPT. 26:
Mumbai-based Internet service provider Tikona Digital Networks, which owns broadband wireless access (BWA) licence for five telecom circles, has roped in Deloitte Touche Tohmatsu to chart its strategy for the enterprise segment. According to a press statement, Deloitte Touche Tohmatsu will help Tikona define its go-to-market strategy, channel strategy and related executions for the enterprise segment. The industry has seen a phenomenal increase in the use of professional Internet access through managed, policy-defined & secured Wi-Fi. Deployment of 4G will further enhance the situation. I am confident that, with our association, Tikona would emerge as a strong service provider, in this segment, said Mr Sandip Biswas Director, Deloitte Touche Tohmatsu. It may be recalled that Tikona had paid Rs 1,058 crore, or 8 per cent of a pan-India BWA licence, for spectrum in Gujarat, Uttar Pradesh (east and west), Rajasthan and Himachal Pradesh in June last year. Keywords: Tikona Digital Networks, broadband wireless access (BWA) licence, Deloitte Touche Tohmatsu, enterprise segment, Mr Sandip Biswas

Federal Grant Pays Deloitte For Survey of Aerospace Companies

October 11, 2011|By MARA LEE maralee@courant.com, The Hartford Courant A federal grant will pay for Deloitte Consulting to assess how many jobs were lost at aerospace manufacturers in Connecticut, Massachusetts and New Hampshire due to the termination of the F-22 fighter, and also to estimate what could happen to jobs at those companies if the F-35 Joint Strike Program is scaled back or delayed. Pratt & Whitney, based in East Hartford, makes the engines for both military jets. The Connecticut Center for Advanced Technology and East Hartford chose Deloitte to do the work, and it will be paid for out of a $380,000 grant from the Department of Defense.

In close race for No 1, Deloitte, PwC grow apace

NEW YORK, Sept 20 (Reuters) - Forget struggling economies, aggressive regulators, pennypinching business clients. The world's two largest accounting and consulting firms are bulking up with acquisitions and combing the globe for new hires. Head-to-head in a race for the title of world's largest private professional services firm, Deloitte and PwC are on a major expansion drive. With audit revenues leveling off in developed markets, the firms have been making a push in growing countries such as China and India and plowing ahead with investments in consulting, where business is growing after a recessionary slump. More is at stake than bragging rights. Just as important is cementing their status as professional service supermarkets, able to help clients in almost any market where commerce transpires. "The more they position themselves as a truly trusted one-stop solution provider to clients, the more they can hope to be more immune to fee pressures from clients that might increase if the economy worsened," said Ashley Newton, associate director at Kennedy Consulting Research and Advisory. Last year, a 15 percent jump in the consulting area helped Deloitte overtake PwC as No. 1 in total revenues among the big four global accounting and consulting firms, which also include KPMG and Ernst & Young. Deloitte claimed the lead by a margin of just $9 million, reporting $26.578 billion revenues to PwC's $26.569 billion. Prior to 2010, PwC had been the largest for at least five years, according to data from Accounting News Report. ASIA, MIDDLE EAST GROWTH TARGETS One factor behind the win was Deloitte's decision to hold on to its consulting arm about a decade ago while other audit firms shed theirs amid concerns of conflict of interest. The decision helped Deloitte keep its grip on the high-potential area of information technology, a business with good growth prospects even in a dodgy economy. Consulting got a further boost from Deloitte acquisitions such as the government business of BearingPoint in 2009. Although regulators in the United States and elsewhere have tightened restrictions on the consulting services auditors can provide, consulting has not been prohibited outright, and both Deloitte and PwC have focused their consulting work largely on companies that are not audit clients. Powerful brand names and close ties with C-suite executives, built partly through audit relationships, have helped make all of the big four formidable competitors in consulting, according to Gartner Research. "What the audit work does is allow them to create competence in an industry," building credibility that is a big plus in pulling in consulting work, said Gartner analyst Alex Soejarto. The move into consulting has been going on for some time, partly because it is far more profitable than mandatory audit work, said Arvind Hickman, editor of International Accounting Bulletin. "Audit is labor-intensive and has suffered a lot from fee pressure due to the global financial crisis."

PwC, which sold its consulting arm to IBM in 2002, has been rebuilding its consulting muscle with acquisitions such as Paragon Consulting Group and the commercial services business of BearingPoint in 2009. Over the past 12 months, it picked up 700 consultants with its purchase of management consulting firm PRTM and hundreds more through its acquisition of Diamond Management & Technology Consultants. Recently it announced it was building its edge in the so-called sustainability or responsible resource use area, by taking on "green" business consultant Andrew Winston as an adviser. HIRING NONSTOP Both Deloitte and PwC have been hiring nonstop. PwC said its member firms across the globe hired about 45,000 new staff in the 2011 fiscal year ended in June. Deloitte will not announce its hires until it releases fiscal 2011 revenue figures, but said it was on track with a projection announced last year of 50,000 hires a year globally over the coming five years. The big four are expected to report their fiscal 2011 revenues in coming weeks and any significant growth will likely once again be in the consulting area, said Jonathan Hamilton, managing editor of Accounting News Report.

Industries
We deliver knowledge and expertise that help our clients to understand complex issues and make better strategic decisions. Our solutions are based on experience in specific industries and business environments. The primary industries we focus on are:

Consumer Business & Transportation: Our experience across all segments of the consumer business industry allows us to understand the issues and trends our clients face. Energy & Resources: we have an established Energy & Resources industry vertical which covers individual industry groups focusing on Oil and Gas, Power, Mining, Renewable and Nuclear Energy.

Manufacturing: Our professionals have worked with manufacturing companies in different functions and therefore bring practical insights. We serve clients in a number of sub-sectors in manufacturing such as automotive, autocomponents, industrial products, process chemicals, textile, apparel, leather products, etc. Technology, Media & Telecommunications: Our TMT Group has deep industry knowledge of TMT companies and is a resource with tremendous potential dedicated to helping clients and prospects in the TMT sectors evaluate complex issues, resolve problems and implement practical solutions. LifeSciences & Healthcare: Our Life Sciences & Healthcare group is dedicated to helping our global and local clients realize the opportunities and meet challenges that are shaping todays life sciences and healthcare sector.

Deloitte Sees EU Clothing Retailers Merging

By Sarah Shannon - Sep 26, 2011

Europe will see more mergers and acquisitions among clothing and houseware retailers as economic woes weigh on consumer spending, said Ira Kalish, a research director at Deloitte LLP. Retail consolidation will take place more among non-food retailers because grocery chains are already more consolidated, Kalish, Deloittes director of global consumer research, said in an interview at the World Retail Congress in Berlin today. I foresee recession, the question is how deep, he said. Consumers across Europe and the U.S. will become frugal as they look to cut their shopping budgets, the research firm said. Kalish expects discounters will continue to benefit alongside upscale and luxury retailers as highly skilled, educated consumers continue to shop. The retailers stuck in the middle will have the trouble - - the supermarkets, the hypermarkets, the mid-priced department stores -- it will be more challenging for them, Kalish said. They will have to cut costs, compete more on prices, and promote their brands to help drive market share. The chance that the U.S. enters recession in the next six months is probably less than 50 percent as a European slowdown could make economic growth in that market decelerate, Kalish said.

SEC Demands Deloitte Chinese Unit Appear In U.S. Court

A federal judge in Washington is weighing whether to force a Chinese unit of a financial services powerhouse to appear in court in a potential billion-dollar securities fraud investigation. The U.S. Securities and Exchange Commission said in September it wants the Shanghai unit of Deloitte Touche Tohmatsu Ltd., the audit, tax and financial services firm, to turn over documents regarding its work for a Cayman Islands-based company called Longtop Financial Technology Ltd. Longtop is the target of an SEC securities fraud probe. D&T Shanghai, a Chinese member firm of the United Kingdom-based Deloitte, performed auditing services for Longtop for several years before terminating its ties in May over issues of alleged financial impropriety. Magistrate Judge Deborah Robinson did not rubber-stamp the governments request for an order to show cause, which would force D&T Shanghai to appear in court in Washington to respond to the SECs demand for documents. At a hearing earlier this month, Robinson ordered the SEC to provide greater detail about why the government thinks the judge has the power to issue an order to show cause in a case where the foreign company has not been served with the governments show-cause application and has not made an appearance in the case. SEC lawyers Thursday night told Robinson its entirely appropriate to issue the show-cause order, a move that would trigger subpoena enforcement proceedings but not deprive D&T Shanghai any substantive rights. A lawyer for the SEC, Mark Lanpher, said in a court filing (PDF)that only after D&T Shanghai has been served with the show-cause order will the government then ask Robinson to issue an order directing the company to respond to the underlying administrative subpoena. D&T Shanghai has told the SEC that its U.S. counsel, Michael Warden, a Sidley Austin partner in Washington, is not authorized to accept service of any order to show cause. Service must be made through the Hague Convention, the international treaty that addresses service of court papers, the company said. But the SEC said yesterday nothing under the Hague Convention stops a federal trial judge from authorizing service on a foreign companys U.S. counsel. That is because the proposed method of serving the respondent would not involve directly sending documents into China or any other conduct that would constitute an affront to Chinas sovereignty, Lanpher said. Lanpher also said that requiring the SEC to use the Hague Convention procedure will be a substantial delay and a waste of resources.

Forcing the SEC to resort to the Hague Convention in a case such as this would require the SEC to send court papers halfway around the world (literally) all so that those papers can be returned to U.S. counsel who has already received and reviewed them, Lanpher said. The SEC is also trying to convince Robinson that D&T Shanghai is already well-represented and knows the substance of the proceedings in U.S. District Court for the District of Columbia. Lanpher noted that Sidleys Warden has been in regular contact with the government in recent weeks. Warden attended the Oct. 7 hearing in the case. Warden, however, sat in the gallery. (Warden, who represents accountants and professional service firms, was not reached for comment this afternoon.) Longtop reported total revenue of $169 million in the fiscal year that ended in March 2010, court records show. The New York Stock Exchange halted trading in May on the companys American depositary shares. At the time, Longtop had a market capitalization of about $1.08 billion. Deloittes Shanghai unit audited the companys financial statements several years before and after Longtops initial public offering in the United States in 2007. The SEC served the administrative subpoena on D&T Shanghais counsel, Douglas Cox, a Gibson, Dunn & Crutcher partner, in the United States. Cox, vice-chair of the firms crisis management practice group, was authorized to accept the subpoena on behalf of D&T Shanghai, court records show. D&T Shanghais lawyers later told the SEC that the company cannot be forced to turn over documents that predate the enactment of the Dodd-Frank Wall Street reform legislation and that turning over any documents could expose the company to sanction under Chinese law. Robinson did not immediately rule on the SECs request for an order to show cause.

Deloitte continues as an engine of employment creation and announces record revenues of US$28.8 billion
- Global workforce reached 182,000 and is expected to grow more than 35 percent to 250,000 by FY2015 - Aggregate member firm revenues grew 8.4 percent in U.S. dollars, marking Deloitte's highest revenue growth in the last three years - Growth experienced in all three major geographic regions and across all four major business lines

U.S. judge puts brakes on SEC`s Deloitte case

Published on Sat, Oct 08, 2011

By Aruna Viswanatha WASHINGTON (Reuters) - A federal judge on Friday put the brakes on the U.S. government's attempt to quickly get documents related to possible accounting fraud at Chinese companies listed on U.S. stock exchanges. U.S. Magistrate Judge Deborah Robinson questioned whether she could force a Chinese unit of accounting firm Deloitte & Touche to hand over records to the U.S. Securities and Exchange Commission. In September the SEC asked the court to enforce a subpoena it sent to Deloitte seeking information about its Chinese unit's audits of Longtop Financial Technologies Ltd, a Chinese company under investigation by the SEC. Dozens of China-based companies have disclosed auditor resignations and bookingkeeping irregularities in the past year, prompting a broad SEC and Justice Department review. But the probes have stalled as investigators face difficulties in obtaining documents and evidence from auditors in China. On Friday, Robinson asked why the agency was not going through procedures set up by the Hague Convention to access that information and is instead going through U.S. courts. That route would mean a long delay, SEC lawyer Mark Lanpher said in court. "We're talking about months and months," he said. "Time is of the essence." Lawyers for Deloitte have not formally acknowledged to the court that they are representing Deloitte or have the motion, since Deloitte is not technically a defendant, a status that slows the process further. Robinson ordered the SEC to submit by next Friday a brief outlining precedent for the court to force Deloitte to respond, and to show the SEC doesn't have to go through the Hague first.

Deloitte Sees Record Revenues Despite Economy

NEW YORK (SEPTEMBER 23, 2011)

BY MICHAEL COHN, ACCOUNTING TODAY

Deloitte Touche Tohmatsu global CEO Barry Salzberg led his firm to record revenues of $28.8 billion this past year.

The New York-based firm reported its revenue Thursday for the fiscal year ending May 31, with aggregate revenues at Deloittes member firms around the world growing 8.4 percent over last year in U.S. dollars, despite the stagnant worldwide economy.The firm ranked in first place on Accounting Today's 2011 list of the Top 100 Firms. Deloittes financial advisory and consulting services helped the firm achieve the most growth, with financial advisory services posting 15.1 percent growth and consulting revenue growing 14.9 percent. Meanwhile, tax revenue grew by 5.2 percent, and audit and enterprise risk services revenue grew by 4.7 percent. Clearly the growth in our advisory and consulting business contributed significantly to our growth, Salzberg said in an interview Friday. Some of the key reasons for the growth overall would include our multidisciplinary services model. The depth and breadth throughout our model give us the unique opportunity to develop innovative solutions and integrated market offerings.

Revenue growth was particularly keen in the Asia Pacific region, especially in India and Australia. Asia Pacific revenues grew 15.8 percent, making it the fastest-growing region for the firm for the seventh year in a row. Deloittes member firms in Australia and India achieved growth in excess of 25 percent, while Deloitte China grew 8.3 percent. Almost all the member firms in the region experienced double-digit growth.

Growth in the Americas region was also high at 10.4 percent, particularly in Brazil and Chile, both of which grew over 20 percent. Member firms in Canada and the United States also posted growth, despite the challenging business conditions. We made a good number of investments in the Asia Pacific, said Salzberg. Its been a focus for us for a number of years, particularly in emerging markets like China and India, and developed markets like Australia. Over the last few years weve been able to reap the benefits of these investments. He noted that in India, consulting has grown the fastest of all of the firms businesses.

The firm also did more hiring as part of its goal to increase its global workforce to 250,000 professionals by fiscal year 2015. This past year, Deloitte added 49,000 professionals, although with reductions, it was actually an addition of 12,000 net new jobs to its global workforce. Deloittes growth has occurred in part organically and through acquisitions. The firms acquisition in 2009 of BearingPoints North American public services practice helped the firms growth two years ago, but the firm went on to make further acquisitions in the past year in areas such as analytics, sustainability and real estate consulting.