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Minkow: inVentiv President Terrell Herring Obtained Degree From Diploma Mill and Company Violated Regulation G Governing Non-GAAP Measures

According to a background check conducted by Barry Minkow, co-founder of the Fraud Discovery Institute, Terrell Herring, President and COO of inVentiv Health Inc. (NASDAQ: VTIV) "claims to have an MBA degree from Pacific Western University, a well known 'diploma mill' that ceased to exist by that name in 2007." In addition, Minkow's report cites a possible violation by Herring of New Jersey Statute N.J.S.A 18A:3-15.2 that "explicitly states that any use of a diploma mill degree in the context of business setting is illegal." Worse yet, Herring's "diploma mill degree" was contained in various SEC filings. For example, see the May 5, 2009 proxy statement.

SEC Regulation G Violation

Convicted felon turned fraud fighter Barry Minkow went on to point out that an inVentiv Health "violated SEC Regulation G governing non-GAAP financial measures, such as EBITDA, and failed to make other appropriate disclosures about certain transactions."

In its Q2 2009 press release, inVentiv violated SEC Regulation G by defining EBITDA as "operating income before depreciation and amortization." SEC guidance specifically requires EBITDA to be measured as earnings (meaning net income and not operating income), before interest, taxes, depreciation, and amortization. However, inVentiv improperly used operating income, rather than net income as a starting point to compute EBITDA, and failed to exclude interest and taxes from its non-compliant EBITDA financial measure.

In a follow up 8-K report filed with the SEC, inVentiv added certain other disclosures required by SEC Regulation G, but failed to disclose that it violated SEC rules by using an improper EBITDA measure. Instead, the 8-K report referred to the Q2 2009 press release and wrongfully continued to claim that "operating income before depreciation and amortization" is EBITDA. See below:

This press release also contains the non-GAAP financial measure EBITDA, which is defined as operating income before depreciation and amortization.

Curiously, inVentiv's 8-K report also refers to a Q2 2008 v. Q2 2007 "adjusted results" report issued a day after the above press release containing its improper EBITDA financial measure. In that report, the company in a sneaky move tried to call its improper EBITDA "adjusted EBITDA" but that too, is a problem.

In 2005, the SEC Division of Corporation Finance reviewed the same non-compliant EBITDA financial measure (operating income before depreciation and amortization) improperly used by CKX Inc. In response, CKX renamed its non-compliant EBITDA measure as "OIBDA" or "operating income before depreciation and amortization" since the starting point for computing any EBITDA or adjusted EBITDA financial measure must be net income and not operating income.

Written by:

Sam E. Antar


I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other family members mastermind one of the largest securities frauds uncovered during the 1980s. I pleaded guilty to three felonies.

I am assisting Barry Minkow and Fraud Discovery Institute in researching inVentiv and Minkow has a short position in inVentiv. I have no position in inVentiv securities, long or short.


I have question regarding fraud in business, recently we came across a person who was involved with a company that I was working for, who upon doing due dililgence was found to have lied on his CV and was banned for life by the Australian equivalent of the SEC, this was discovered when a few of us in the office were concerned about the lack of experience and understandng he showed on a day to day basis. We did a google search on his name and found that there was a web site and blog about him which gave us the information that he was a fruad. would ask the readers of the site to read the info on this guy at and give us their feed back on what steps we should take next.

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