Corporate Restatements Return to Lower Pre-2021 Levels

Company Accounting Error Fixes Return to Pre-SPAC Boom Levels

Corporate financial restatements have plateaued at levels close to those seen before 2021, when they rose to a 15-year high driven by a boom in blank-check companies correcting accounting errors, a new report shows.

Companies issued 430 financial statement corrections for accounting mistakes in 2023, according to Ideagen Audit Analytics’ latest annual financial restatements report released Monday. That represents a 6% decrease from 458 restatements issued in 2022, but both figures are less than one-third of the nearly 1,470 corrected financial statements recorded in 2021.

In FTX litigation, feud escalates between bankruptcy and class action lawyers

Both FTX bankruptcy lawyers and lawyers from the Miami MDL told the Manhattan judge earlier this month that they should be in charge of distributing some or all of the forfeited money to victims of Bankman-Fried’s fraud.

FTX lawyers said in a June 14 brief that the now-bankrupt exchange owns a lot of the money misappropriated by Bankman-Fried, so some of the forfeited funds should be disbursed to FTX’s creditors through the bankruptcy process.

But MDL lawyers said in their own June 14 brief that FTX’s customers have a stronger interest than FTX in recovering the money they deposited with the exchange before it went bust. That money, they argued, belongs to the customers who were fraudulently induced into opening accounts at the exchange – not to the exchange itself.

Somehow, three judges – Kaplan in the criminal case, U.S. Bankruptcy Judge John Dorsey in FTX’s Delaware Chapter 11 and U.S. District Judge Michael Moore in the Miami-based MDL – are going to have to hash out which court ought to be in charge and how FTX customers should be repaid. And they’re going to have to do that amid ugly allegations from each side about their counterparts.

AutoNation, Sonic Warn of Financial Impact From CDK Hack

Some of the largest auto dealers in North America are warning of a potential “material” impact to their finances from a cyberattack that has slowed operations at thousands of stores.

Sonic Automotive Inc. and Penske Automotive Group Inc. filed disclosures with the US Securities and Exchange Commission on Friday. Group 1 Automotive Inc., AutoNation Inc., Lithia Motors Inc. and Asbury Automotive Group Inc. followed Monday. All six companies use CDK Global, whose so-called dealership management system was halted a week ago after a crippling hack.

The disclosures represent the first sign of potential widespread economic impact stemming from the attack against CDK, which serves roughly 15,000 North American car dealerships….