The ATM maker loses money

Oki Electric Industry, the maker of ATMs, telecommunications equipment and printers, suspended its Managing Director of its Spanish printer making entity Oki Systems Ibérica S.A.U. amid accounting probe. The MD allegedly overstated the Spanish unit’s accounts receivables. On a consolidated basis the total impact of this matter is estimated to be approximately 8.0 billion yen in risk of loss and there is a possibility that it may impact past fiscal year results. The company’s forecasts may be revised due to this issue.

The Q1 financial results that were due to be announced by August 14, 2012, will be delayed by a month. The Tokyo exchange placed the stock on its supervision list because the company will miss the submission deadline of Aug. 14 for its quarterly report.

The future is bleak

The futures brokerage firm Peregrine Financial Group has filed for Chapter 7 protection, after its founder attempted suicide and amid allegations of fraud.

It is alleged that more than $200 million had gone missing at the commodities brokerage. In his suicide note, the CEO of PFG, Russell Wasendorf, Sr. accepted that he had been embezzling his company’s clients by moving the funds of the company to his personal bank accounts. According to his note, he was the only person who had access to the US Banks’s accounts where funds were kept. Once he got the bank statements he would move money to his personal accounts and then forge the statements to give copies to the accounting department. If this is true, then this would be the best example of the need for segregation of duties for companies, especially having multiple people look at bank/ cash accounts. This misappropriation of funds apparently was happening for more than two decades. Surprisingly it went by unnoticed by either the authorities or anyone else in the company.

The government also alleges that between October 2010 and May 2012, Wasendorf filed 31 monthly financial statements with the Community Futures Trading Commission that presented a completely false financial picture of PFG. And no one noticed it till mid-2012.

The radio embezzlement

XM Satellite Radio lost $900,000 of company funds in a case of embezzlement by a former employee. Valencia Person an employee of XM Radio colluded with Brenda Jones another XM Radio employee to defraud the company. The two diverted a couple of dozen payments that were intended for XM’s vendors to bank accounts owned by Jones, and to cover this up they went into the accounting systems to change the information.

Interestingly even after Jones left XM in 2006, she continued to receive money in her bank accounts. Both Jones and Person pleaded guilty of the theft in January and March 2012 respectively.