Journalism
Review
Debits & Credits: the FT Investigates
Welcome to the fight, FT; Awol on Ranieri; counter-intuition
discharge, etc.
By
Ryan Chittum
Tue
27 May 2008 09:55 AM
♦♦♦
Ranieri’s CA record: down the memory hole
A Debit to the financial press for its coverage of
Franklin Bank Corporation naming an interim CEO after the company revealed
“improper accounting” in its mortgage lending numbers. The company made its
chairman Lewis S. Ranieri acting CEO.
It’s interesting news, and The New York Times
reported it on its Business Day cover with the angle that Ranieri had
been a sort of subprime Cassandra, “warning anyone who would listen that the
housing market was about to collapse.”
The Wall Street Journal
wrote
about it on C2, and gives a bit of background, too, noting that Ranieri was
a key figure in the classic Wall Street book “Liar’s Poker” who basically
invented the mortgage bonds that led to the current crisis. Reuters mentions
that, as well.
But none mentioned a germane piece
of data for someone taking over a company in the midst of accounting woes:
Ranieri has experience with accounting scandals. He was on the board of
Computer Associates when it put itself through its long, crippling ordeal
earlier this decade and was nearly shut down by a federal indictment in the
$2.2 billion accounting fraud. CFO.com is the only publication we can find
that even
mentioned his association with CA (in 2006 it renamed itself like most
accounting frauds do).
One big shareholder
filed
suit last fall against CA alleges that Ranieri and former New York
Senator Alfonse D’Amato “knew of and directed the cover-up of the fraud” and
that Ranieri specifically met with an executive to tell him to lie. The exec
is now in prison.
This is all information that readers should know.
♦♦♦
All
content © Copyright 2008 Columbia Journalism Review at
Columbia University's
Graduate School of
Journalism.
|