Wednesday May 10, 2017

Jose Cardenas, Roseann Palmer, Rosalinda Proscelle, Lura Zuniga – The Real Scoop on Blue Bell

What a clever title!  The students contrasted this case with the J & J recall of Tylenol. Instead Blue Bell used Creep Recall thinking it was a limited problem. The result was that Sid Bass loaned them $125 M to keep afloat otherwise the firm would be gone. Some cases involved death, and of course a considerable loss of prestige to BB.   The case also examines philosophical rationales for the actions.

Roshawanda Anderson How to Get Away with Murder

RA examines various food practices by grocers and MCD. MCD does not come away as the You Deserve a Break Today theme they play on tv, maybe you deserve to break from MCD. She also mentions the inhumane treatment of animals raised for food and how they are slaughtered.  One hundred years ago writer Upton Sinclair wrote a similar book titled

Erik Jasso  – A Bubble or a Ponzi Scheme

Erik wonders if the same bubbles formed in Year  2000 and Year  20058 are about to return. I suspect he is very very right but that it will be more of a gradual thing like Year 2000-2008. Nice job Erik!

Wednesday May 10, 2017

Nathan Guardia – Big Data

Rarely to never do we see a student actually using statistics. Nathan did just that in his study of Big Data. He mentions the frequency of someone at a particular gas station have their identity stolen by a device in the pump which copies card information. This happened at the new Shell station near my home just this past month. I no longer use a credit card at the pump but pay cash to inside the store. Buyer  Beware!  At any rate Nathan goes on to describe the data created by mankind to date and just how fast we are creating more. And there are some fine examples of how data collection can be applied. I guess you were not with us on review day as this one just knocked me over!  Nathan this was great, who are you where were you sitting in class, I don't  know who you are!

Jose Rincon – Mortgage Fraud

As noted in class, higer and higher home prices make more money for all involved, so there is a tendency for fraud to quickly escalate in such dealings. Jose looks at precautions against such activity.

Carlos Lopez – Penn State and Baylor

Carlos ran with my idea on Sports Played Badly. As he says, this is not a game played among students this is big time bragging rights and money. I am stunned that in  2011 UT was grossing over twice what A & M was in football. What UT only took in $100 million?  Well sure enough as the poster states only 3 colleges grossed over $100 M in 2013 but by 2016 28 colleges had grossed over $100 M.

Baylor had ample opportunity to learn from the Penn State Scandal. And ti had its own earlier scandal regarding the Basketball Program back in 2003.

Edward Zurita – Baylor Basketball

Edward examined the results of numerous NCAA violations which led to a ban on post season competition  in 2003-04.  Basketball coach Dave Bliss had paid the tuition for two players. One player killed another player.  Bliss concocted a story that the slain student was a drug dealer to cover up his illegal involvement. And he induces other to lie or be fired. The final result was one of the harshest NCAA penalties ever. One would think Baylor would have instituted numerous safeguards and internal controls and audits to prevent such an event from occurring again. But another failure to exercise oversight then occurred for the football team. Clearly the tone at the top was not what it should have been.

Renita Elizalde – A Penny for your Thoughts,  A Million for His   

I had suggested in class that a comparison of modern Presidents cashing in on their Post Presidency would make for an interesting comparison. Renita took me up on that.

Her hypothesis was that the President with the highest approval rating would make the most money post President. The result however as that the President  with the least fluctuation in ratings earned the most. That President is Bill Clinton. I suspect another dimension of this is the lengths the Presidents go to market themselves.Certainly starting a world wide foundation and openly soliciting donations boosted the Clinton cash haul.   And Renita observes that social mood towards a President cashing in since Truman has changed. She notes Obama accepted $400000 just three months after leaving office. Then she posed an interesting question. Given the cost of running for President, how long before a President takes money while in office. One could argue that has already occurred with unions funneling dues to political campaigns or wealthy casion owners contributing in the same manner. 

Wednesday May 10, 2017

Krystle  August, Pete Galvan, Veronica Garza, Juan Mendoza – Robert Scully Fraudster in San Antonio

This is interesting in that the whole thing happened between SA and Thailand. He defrauded the IRS and his partners by hiding income and inflating prices. As KPMG learned, the IRS does not take abuse kindly!  Scully got a whopping 15 years jail sentence, restitution, 3 years supervised release, and a fine. Notably none of the fraudsters in the Drexel Burnham fraud  got anything close to that.

Xiaodan Ye and Vicky Chen – Health Care Fraud

This case examines how James Reynolds Sr created four charities which were mere fronts to funnel money to his own family. Only 2.5% of the $187 million raised went to charity. As the students ask, why didn't donors look for an audit?  Where was the supervision?

Nick Forge – Higher Ed Financing

Nick took a look at a topic I raised in class, how funds are allocated among the Main Campus of UT and College Station versus their regional campuses. As he notes UT now has its own endowment which is twice the size of the Permanent Fund. He features a good circle graph showing cuts to regional campuses. How about some revenue sharing from the top down?

Wednesday May 10, 2017

Yeret Bustos – Rules Versus Principle

Yeret took a look at the principle based IFRS rules versus the Rule Based GAAP we use in the states. The large accounting firms are lobbying in the press for a more principle based system. The poster does  a good job of showing the difference in the two with far fewer rules in IFRS and in my opinion many that make more sense such as arrangement of the Cash Flow Statement.

Rachel Shore – Ethic in the Service Industry

I was anxious to examine this one in detail after reading that Rachel herself has spent seven years as a server at Olive Garden and BJ Brewhouse.  Rachel notes the employee turnover rate in the restaurant industry is 72.9% compared with 46.1% in the total private sector. And she performed some original research. She obtained one hundred answers to a ten question survey conducted among both present and prior servers. She then presented the results showing massive evidence of fraud. Her solution is to pay the servers more, As it is the server sees the guest, not the company as their real employer as that is who pays them. No wonder loyalty is out the window.  And she suggests some improvement on handling coupons and discounts. Often the server will turn in the discount and pocket the difference as indicated by the survey.  Well done this is a candidate for a published case study.

Vicky Salazar, Brenda Reyes – Turnover at the Big 4

Interestingly one student is working for a Big 4 and the other is employed by one of the next seven large firms in the US. Their study shows higher turnover in the Big 4.  The researchers gathered from a variety of sources including eblogs and surveys. It appears they did some original research among firms in San Antonio finding the turnover was not actually as high as expected. A bar graph presents  categories explaining why individuals leave.  Well done and I will also be following up with them on a case study.

Travis Valadez – Goodwill Where Does the Money Go

One of my friends has commented that Goodwill is the fastest growing retail franchise in America. I don't know what prompted Travis interest in this but the results are quite revealing.And indeed, Goodwill refers to its locations as franchises, just like MCD!  Goodwill is paying execs in each franchise some some half million dollars while paying some employees as little as 22 cents per hour. No wonder complaints are beginning to surface.  Good work in this Travis!

Nelson Thomas and Gary Turner, The Lucifer Effect

The Lucifer Effect was the result of an experiment that placed 'normal people' as prisoners and guards in an actual prison. Chaos soon developed with Mental abuse and torture used by the newly minted guards. The experiment was quickly curtailed.

I had a bit of a hand in this as the students were looking for a similar corporate example. I suggested the story detailed in Den of Thieves by James Stewart about Mike Miliken. The same elements were there that allowed Milken to escape control. He was making his firm, Drexel so much money he was allowed to move to California, the other end of the USA, and avoid supervision. And so he became both the bid and the ask in his own market, free to price bonds as he pleased. Mark ups of  25% were not uncommon.  Nelson and Gary  draw parallels between the Standford experiment and Milken.