Sounds like the CARB "investigation" is little more than kabuki. Go through the motions long enough to compromise any future substantial criminal investigation and then have it stopped near the end on a technicality. Thats how "self regulation" of professional cartels work. And is suppose to work.
Well lets see. Were n't Ernst and Young the auditors who signed off on Anglos completely fraudulent annual accounts pre 2009? The fact that after nationalization Anglos interim public a/c's of 2009 and all subsequent full public a/c's completely repudiate (in polite terms, restate) pretty much everything that Ernst & Young seemed so happy to sign off on. You dont go from 1B profit to 30B in losses just because a property bubble burst. From the restated a/c's it looks like Ango was so grossly mismanaged that it would have gone bust even if there had been a soft landing. Is nt that what outside auditors are suppose to flag? Their statutory responsibility? I know the dirty like secret of auditors is that they usually send clueless juniors out with advanced qualifications and little grasp of basic book keeping. So they are obsessed with trivia and have little or no forensic skills. Items that would be flagged by someone with even basic night class booking keeping skills just sails straight passed them. And the people paying their salaries like to keep it that way.
I think E&Y professional position re Anglo is called gross professional negligence at best (a felony). Or (more accurately) accessory to fraud ( a much bigger felony). All the evidence you need is in black and white in Anglos public a/c's. I'm sure Anglos private a/c's, the ones that E&Y had access to all these years, would tell a very interesting tale. Arthur Anderson were put out of business for aiding and abetting a far less serious (and far smaller) fraud at Enron.
Enough evidence in the public domain already to start handing down criminal and civil indictments.
CARB is a joke alright. Self regulation is no regulation.
In relation to Anglo, you have to remember a few things in relation to the accounts and losses that were different this time
1. Explosive loan growth from 17B to 72B at 18 times leverage between 2003 and 2008 (ie shareholders funds from 1 to 4B).
2. Anglo liked every flavour except vanilla.
3. The auditors simply follow the rules to be off the hook. Their role is to sign off on the assets and liabilities largely. The rules do not require them to be valuers - rather they use third parties to support asset valuations. This is not saying they did an ok job or had reasonable judgement but it will make prosecution well nigh impossible.
As an auditor, if I dont like what a client is doing, I just resign. But I dont have to decide to resign from big fees.
By the way, not sure whether in relaiton to E&Y or PWC but all of the responsible individuals for one of the banks were fucked out of the firm.
4. Accounting rules meant:
- Have a valuation supporting an asset on a roll up? fine.
- The mark to market rule change meant no general provisions while valuations were increasing. Stupid fucking rule in a completely leveraged long-cyclical sector like finance.
- Loan "Arrangement Fees" capitalised onto new loans allowed income up front at no cost to the client. (How real was that 3B profit between 2003 and 2008)
5. Shabby regulation. Concerns without action.