"The Vice-President was very happy when you said I was boring." -- Bill Clinton to ABC's David Brinkley, who five days previously on Election Night had trashed the President on-airEDITED BY LARRY LIGHTReturn to top
UH...ABOUT SENSORMATIC'S NUMBERS
STORE SECURITY-TAG MAKER Sensormatic Electronics says its chairman, Ronald Assaf, knew the company was using what critics call dubious accounting practices that inflated revenues. This comes from an internal memo by its auditors, Ernst & Young, and in the company's answer to a shareholder lawsuit. Up until now, high-level knowledge of the problem was uncertain. Still, Assaf is coasting unopposed to reelection as a director at the Nov. 22 annual meeting.
In court documents, the company admits booking some sales before products were shipped or when they were sent to warehouses for "staging purposes." Sensormatic's computer system was reset on occasion as part of the practice. Ernst & Young, which won't comment publicly, says in legal papers that the practice was hidden from it; later, the firm discovered what was going on. Aside from the shareholder suit alleging fraud, there's a Securities & Exchange Commission probe.
Company founder Assaf, who earns $455,000 yearly as a Sensormatic consultant, won't comment. But he and the company have said the practice had no "material impact" on financial statements. Reasoning: Revenues were simply recorded in a later quarter, so the result turned out to be a wash. But because of the accounting problems, Sensormatic had to restate third-quarter 1995 revenue by $21 million and earnings by $9 million.EDITED BY LARRY LIGHT By Gail DeGeorgeReturn to top
MAULED DATA AT BEAR STEARNS
BEAR STEARNS HAS HAD A pretty good investment record in recent years, but not as good as it wants us to believe. Its recently released proxy statement for the fiscal year ended June 30 gives a wrong figure for investment returns of other financial companies--showing Bear outpacing the Standard & Poor's Financial Miscellaneous Index by 12% over five years. Trouble is, the correct tally has this peers index doing slightly better than Bear.
Bear made the comparison because of a Securities & Exchange Commission rule mandating that all publicly traded companies match their performance over a five-year period with a peer group and a broad market index, such as the S&P 500. And returns must be calculated with dividends reinvested. Bear did that for its own return. But it didn't for the S&P peers index or for the S&P 500, which it actually beat by $78, not the $105 it first claimed.
The error was spotted by independent analyst Michael Flanagan. He found no similar problem with other Wall Street houses. A Bear spokeswoman calls the mistake a clerical error that has been corrected in an SEC filing.EDITED BY LARRY LIGHT By Lisa SandersReturn to top
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ELECTION HANDLERS: NO SHAME
IMAGE-WISE, IT HASN'T BEEN a boffo year for political consultants. They have been rocked by controversies over, among other things, "push polls" (pseudo phone surveys that really spread dirt on an opponent), GOP consultant Ed Rollins' kiss-and-tell book, and of course, the Dick Morris sex scandal.
At the International Association of Political Consultants' recent conclave in Miami, though, there was no soul-searching. Sure, the U.S. consultants' group has decried push polls, but that was it. While disgraced Clinton adviser Morris didn't show, his spirit hovered benignly. Reminisces Democrat Hank Sheinkopf: "Dick made a great contribution." The big buzz, says Republican Tom Edmonds, was "about the millions Morris is going to get from his book contract. They're not mad--they're envious."EDITED BY LARRY LIGHT By Lee Walczak and Gail DeGeorgeReturn to top