Greetings, View fans. Here are your morning reads.
Deloitte & Touche gets pinched
Here is a pretty galling story that has gone largely unnoticed. Five years ago the U.S. Public Company Accounting Oversight Board suspended a Deloitte & Touche partner because of faulty audit work. Yesterday the board said it had fined Deloitte $2 million because it let him keep working on audits at the firm anyway while he was suspended: “Deloitte knew of the suspension order, but permitted these activities to take place without the consent of the Board or the Securities and Exchange Commission. These activities included work on developing firm-wide policies and audit guidance, as well as participation in three national office consultations with public company audit engagement teams.” So how many people at Deloitte were disciplined by the board for letting this happen? None.
What’s wrong with Europe’s banks
This introduction pretty well covers it. From Sonia Sirletti and Yalman Onaran of Bloomberg News: “As the European Central Bank prepares to take its first big step toward a banking union, the financial industry in the region remains as fragmented as ever. Access to credit is choked off in the economies that need it most, banks are more dependent on government bonds of their home countries, and European Central Bank reviews of the region’s biggest lenders, intended to restore investor confidence, may backfire.”
We’re told this deal, still in the works, could be for as much as $6 billion. It’s with institutional investors and is separate from the $13 billion package being negotiated with the Justice Department and other agencies. From the Financial Times: “The cases relate to the same allegations: that JPMorgan and two companies it bought during the crisis -- Bear Stearns and Washington Mutual -- breached their duties to investors by packaging into bonds mortgages that failed to meet credit quality standards. The MBS later fell sharply in value when homeowners began to default, though they have improved recently.”
Carl Icahn on cutting his Netflix stake
The billionaire investor sold more than half his stake in the video service; he still holds 4.5 percent of the company. Icahn explained his reasons in a regulatory filing yesterday: “As a hardened veteran of seven bear markets I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table.”
Oh no, Amazon actually cares about costs?
The retailer raised the minimum order price for free shipping by $10 to $35. The move “should reduce its massive shipping costs and could drive more customers to its Amazon Prime service,” reports the Seattle Times. The company reports third-quarter earnings tomorrow.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)