Lack of Accountants May Put a Dent in the CFO's Career Prospects

Not Enough Accountants? The CFO’s Tenure Might Get a Little Shakier

Nearly 640 U.S.-listed companies cited insufficient accounting personnel for a material weakness during a 12-month period through June, up 1% over an average of the previous three years, according to Hudson Labs, an investment research software company previously known as Bedrock AI.

Of those companies, roughly 180, or 28%, replaced their CFO at least once in the 12 months through June, the Hudson Labs data showed. In contrast, of more than 5,900 U.S.-listed companies with no material weakness in that period, around 1,300, or 22%, had any CFO turnover.

CFOs bear responsibility for the solidity of a company’s financial report. But amid a lack of accountants to hire, opinions diverge on whether replacing the finance chief is fair, or accomplishes much.

A recurring trend: securities fraud complaints targeting key metrics

In securities litigation, plaintiffs focus on certain types of disclosures on a routine basis. One frequent target area focuses on key performance indicators (KPIs). These key metrics provide meaningful insight into public companies’ financial and operating performance. They are not metrics that have uniform definitions or methodologies for calculation subject to industry standards, unlike accounting metrics that are subject to GAAP — generally accepted accounting principles.

The SEC has provided guidance on how companies should disclose KPIs as well as non-GAAP metrics, and it routinely issues comment letters to public companies on these issues. The plaintiffs’ bar has taken notice and has found some success in asserting claims predicated on allegedly misleading disclosures relating to these metrics. Cases provide useful insights for companies that report such key metrics to investors.

GPB Capital Co-Founders Found Guilty of Fraud

A jury convicted two founders of GPB Capital Holdings, David Gentile and Jeffry Schneider, Thursday of criminal charges in the largest fraud case involving a private-equity firm since the collapse of Abraaj Group in 2018.

The federal jury found both men guilty of securities fraud and conspiracy charges over their handling of around $1.7 billion raised from roughly 17,000 mostly individual investors in the U.S. Gentile was also convicted of wire fraud.

The charges centered on how the New York firm raised investment funds and how it falsely portrayed the performance of some car dealerships it acquired to induce new investors to put money into GPB funds.

Crypto Executives, White House Advisers to Meet Next Week

Executives from the cryptocurrency industry are planning to meet with White House aides and Representative Ro Khanna next week to discuss concerns around digital assets and propose policy changes for the next administration, according to a person familiar with the matter.

Outgoing senior White House adviser Anita Dunn, National Economic Adviser Lael Brainard and Deputy Chief of Staff Bruce Reed are expected to attend, according to the person, who asked not to be identified because the meeting is private.