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Showing posts from June, 2011

Did Green Mountain Coffee Roasters Violate Its Code of Ethics, too?

"You think that would fool a Corleone?" --- Michael Corleone in The Godfather Movie

When I teach law enforcement, professionals, businesses, and students about white-collar crime, I describe how fraudsters build "walls of false integrity" around themselves to increase the comfort level and ultimately gain the trust of their victims.

Green Mountain Coffee Roasters (NASDAQ: GMCR) likes to portray itself as a responsible corporate citizen. However, upon close examination, the company seems to have continuing problems following securities laws and Generally Accepted Accounting Principles. It also appears to have problems abiding by its own Code of Ethics governing how non-public information is discussed outside the company. Can Green Mountain Coffee be trusted by investors?

Background

On May 5, 2011, CNBC Senior Stocks Commentator Herb Greenberg questioned the quality of earnings reported by Green Mountain Coffee Roasters for the thirteen-week period ended March 26, 2011…

Is Green Mountain Coffee Roasters Fudging Its Reserve Numbers?

Updated to include links to follow up articles by Seven Days and Forbes at bottom of blog post

Green Mountain Coffee Roasters (NASDAQ: GMCR) finally released additional information about its accounting for reserves to all investors in its website, in response to my letter to the Securities and Exchange Commission detailing what I believe are violations of Regulation FD  and accounting irregularities by the company. The company admitted its reserve numbers were "misinterpreted" because of inconsistent reporting in its Statement of Cash Flows. However, its numbers still don't add up. See below (Click on image to enlarge):



Note: The change is sales returns reserve is rounded to $5.3 million. The 10-Q report for the period ended March 26, 2011 reflects the exact amount of $5.262 million.
Green Mountain Coffee reported separate balances for its sales returns reserve and its allowance for doubtful accounts in the fiscal year ended September 25, 2010 10-K of $12.742 million and…

To the Securities and Exchange Commission: Green Mountain Coffee Roasters selectively spills the beans and its numbers still don't add up

Note to readers:

Over the last four weeks, I sent several letters to Mary Schapiro, Chairman of Securities and Exchange Commission detailing, what I believe, are Regulation FD violations and questionable financial reporting by Green Mountain Coffee Roasters (NASDAQ: GMCR). Currently, the company's financial reports are being probed by two separate divisions of the SEC: The Enforcement Division and the Division of Corporation Finance. Yet under the SEC's nose, the company is apparently continuing to engage in improper behavior. After reading excellent investigative reporting by best-selling author Roddy Boyd in his blog today, it seems that Green Mountain Coffee is an $11 billion market cap company operating like a penny stock. --- Sam E. Antar


To Mary Schapiro (Chairman of the Securities and Exchange Commission):

Starting around May 9, 2011, Green Mountain Coffee Roasters (NASDAQ: GMCR) provided certain material non-public financial information about its sales returns reserves t…

Hypocrisy Behind Florida Law Requiring Welfare Recipients to Take Drug Tests

"We're both part of the same hypocrisy, senator, but never think it applies to my family." --- Michael Corleone in The Godfather: Part II

Last week, Florida Governor Rick Scott signed a law requiring welfare recipients to be tested for illicit drug use. According to Reuters:

The law was one of Scott's campaign promises. Supporters say it will help ensure that taxpayer money is used to get families on their feet and not to fuel drug habits at state expense."While there are certainly legitimate needs for public assistance, it is unfair for Florida taxpayers to subsidize drug addiction," Scott said in a statement released after he signed the bill during a visit to Panama City. "This new law will encourage personal accountability and will help to prevent the misuse of tax dollars."Beginning July 1, recipients who test positive for drugs would be denied benefits for a year. A second failed test would result in a three-year ban.In two-parent households, b…