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Financial Reporting: A Case Study Analysis

Mills, Darby (2018) Financial Reporting: A Case Study Analysis. Undergraduate thesis, under the direction of Victoria Dickinson from Accountancy, The University of Mississippi.

This paper looks at accountancy following the application of the U.S. Generally Accepted Accounting Principles (GAAP) through case study analysis. Within this paper, there are twelve case studies that cover areas of financial accounting, financial statement analysis, and research. The financial accounting cases cover several topics, such as stockholder’s equity, inventory, leases, and deferred tax assets and liabilities. The financial statement analysis cases use ratios, creation of financial reports, and commentary to discuss in further detail the financial statements. The FASB Codification is used as a basis for research in many cases. Dr. Vicki Dickinson facilitated each case within this paper through the instruction of the Accountancy 420 course.

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Financial Statement Analysis: How It’s Done, by Statement Type

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

What Is Financial Statement Analysis?

Financial statement analysis is the process of analyzing a company’s financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization and to evaluate financial performance and business value. Internal constituents use it as a monitoring tool for managing the finances.

Key Takeaways

• Financial statement analysis is used by internal and external stakeholders to evaluate business performance and value.
• Financial accounting calls for all companies to create a balance sheet, income statement, and cash flow statement, which form the basis for financial statement analysis.
• Horizontal, vertical, and ratio analysis are three techniques that analysts use when analyzing financial statements.

Jiaqi Zhou / Investopedia

How to Analyze Financial Statements

The financial statements of a company record important financial data on every aspect of a business’s activities. As such, they can be evaluated on the basis of past, current, and projected performance.

In general, financial statements are centered around generally accepted accounting principles (GAAP) in the United States. These principles require a company to create and maintain three main financial statements: the balance sheet, the income statement, and the cash flow statement. Public companies have stricter standards for financial statement reporting. Public companies must follow GAAP, which requires accrual accounting. Private companies have greater flexibility in their financial statement preparation and have the option to use either accrual or cash accounting.

Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques are horizontal analysis , vertical analysis , and ratio analysis . Horizontal analysis compares data horizontally, by analyzing values of line items across two or more years. Vertical analysis looks at the vertical effects that line items have on other parts of the business and the business’s proportions. Ratio analysis uses important ratio metrics to calculate statistical relationships.

Companies use the balance sheet, income statement, and cash flow statement to manage the operations of their business and to provide transparency to their stakeholders. All three statements are interconnected and create different views of a company’s activities and performance.

Balance Sheet

The balance sheet is a report of a company’s financial worth in terms of book value. It is broken into three parts to include a company’s assets ,  liabilities , and  shareholder equity . Short-term assets such as cash and accounts receivable can tell a lot about a company’s operational efficiency; liabilities include the company’s expense arrangements and the debt capital it is paying off; and shareholder equity includes details on equity capital investments and retained earnings from periodic net income. The balance sheet must balance assets and liabilities to equal shareholder equity. This figure is considered a company’s book value and serves as an important performance metric that increases or decreases with the financial activities of a company.

Income Statement

The income statement breaks down the revenue that a company earns against the expenses involved in its business to provide a bottom line, meaning the net profit or loss. The income statement is broken into three parts that help to analyze business efficiency at three different points. It begins with revenue and the direct costs associated with revenue to identify gross profit . It then moves to operating profit , which subtracts indirect expenses like marketing costs, general costs, and depreciation. Finally, after deducting interest and taxes, the net income is reached.

Basic analysis of the income statement usually involves the calculation of gross profit margin, operating profit margin, and net profit margin, which each divide profit by revenue. Profit margin helps to show where company costs are low or high at different points of the operations.

Cash Flow Statement

The cash flow statement provides an overview of the company’s cash flows from operating activities, investing activities, and financing activities. Net income is carried over to the cash flow statement, where it is included as the top line item for operating activities. Like its title, investing activities include cash flows involved with firm-wide investments. The financing activities section includes cash flow from both debt and equity financing. The bottom line shows how much cash a company has available.

Free Cash Flow and Other Valuation Statements

Companies and analysts also use free cash flow statements and other valuation statements to analyze the value of a company . Free cash flow statements arrive at a net present value by discounting the free cash flow that a company is estimated to generate over time. Private companies may keep a valuation statement as they progress toward potentially going public.

Financial statements are maintained by companies daily and used internally for business management. In general, both internal and external stakeholders use the same corporate finance methodologies for maintaining business activities and evaluating overall financial performance .

When doing comprehensive financial statement analysis, analysts typically use multiple years of data to facilitate horizontal analysis. Each financial statement is also analyzed with vertical analysis to understand how different categories of the statement are influencing results. Finally, ratio analysis can be used to isolate some performance metrics in each statement and bring together data points across statements collectively.

Below is a breakdown of some of the most common ratio metrics:

• Balance sheet : This includes asset turnover, quick ratio, receivables turnover, days to sales, debt to assets, and debt to equity.
• Income statement : This includes gross profit margin, operating profit margin, net profit margin, tax ratio efficiency, and interest coverage.
• Cash flow : This includes cash and earnings before interest, taxes, depreciation, and amortization (EBITDA) . These metrics may be shown on a per-share basis.
• Comprehensive : This includes return on assets (ROA) and return on equity (ROE) , along with DuPont analysis .

What are the advantages of financial statement analysis?

The main point of financial statement analysis is to evaluate a company’s performance or value through a company’s balance sheet, income statement, or statement of cash flows. By using a number of techniques, such as horizontal, vertical, or ratio analysis, investors may develop a more nuanced picture of a company’s financial profile.

What are the different types of financial statement analysis?

Most often, analysts will use three main techniques for analyzing a company’s financial statements.

First, horizontal analysis involves comparing historical data. Usually, the purpose of horizontal analysis is to detect growth trends across different time periods.

Second, vertical analysis compares items on a financial statement in relation to each other. For instance, an expense item could be expressed as a percentage of company sales.

Finally, ratio analysis, a central part of fundamental equity analysis, compares line-item data. Price-to-earnings (P/E) ratios, earnings per share, or dividend yield are examples of ratio analysis.

What is an example of financial statement analysis?

An analyst may first look at a number of ratios on a company’s income statement to determine how efficiently it generates profits and shareholder value. For instance, gross profit margin will show the difference between revenues and the cost of goods sold. If the company has a higher gross profit margin than its competitors, this may indicate a positive sign for the company. At the same time, the analyst may observe that the gross profit margin has been increasing over nine fiscal periods, applying a horizontal analysis to the company’s operating trends.

Congressional Research Service. “ Cash Versus Accrual Basis of Accounting: An Introduction ,” Page 3 (Page 7 of PDF).

Internal Revenue Service. “ Publication 538 (01/2022), Accounting Periods and Methods: Methods You Can Use. ”

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Home > Honors College > Honors Theses > 250

Honors Theses

Financial reporting: a case study analysis.

Darby Mills , University of Mississippi. Sally McDonnell Barksdale Honors College

Date of Award

Document type.

Undergraduate Thesis

Accountancy

First Advisor

Victoria Dickinson

Relational Format

Dissertation/Thesis

This paper looks at accountancy following the application of the U.S. Generally Accepted Accounting Principles (GAAP) through case study analysis. Within this paper, there are twelve case studies that cover areas of financial accounting, financial statement analysis, and research. The financial accounting cases cover several topics, such as stockholder's equity, inventory, leases, and deferred tax assets and liabilities. The financial statement analysis cases use ratios, creation of financial reports, and commentary to discuss in further detail the financial statements. The FASB Codification is used as a basis for research in many cases. Dr. Vicki Dickinson facilitated each case within this paper through the instruction of the Accountancy 420 course.

Recommended Citation

Mills, Darby, "Financial Reporting: A Case Study Analysis" (2018). Honors Theses . 250. https://egrove.olemiss.edu/hon_thesis/250

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Nikkhah-Babaei, H. "Analysis of company financial performance." Thesis, University of Bradford, 1988. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.381010.

Volgina, Vera. "Postmerger financial performance: econometric analysis." Master's thesis, Vysoká škola ekonomická v Praze, 2009. http://www.nusl.cz/ntk/nusl-16850.

Faruk, Hossan, and Ahsan Habib. "Performance evaluation and ratio analysis of Pharmaceutical Company in Bangladesh." Thesis, University West, Department of Economics and Informatics, 2010. http://urn.kb.se/resolve?urn=urn:nbn:se:hv:diva-2516.

The thesis applies performance evaluation of pharmaceutical company in Bangladesh. It means evaluate how well the company performs. The main aim is achieved through ratio analysis of two pharmaceutical (Beximco and Square pharmaceutical) companies in Bangladesh. The main data collection from the annual financial reports on Beximco and square pharmaceutical companies in 2007 to 2008.Different financial ratio are evaluated such liquidity ratios, asset management ratios, profitability ratios, market value ratios, debt management ratios and finally measure the best performance between two companies. The mathematical calculation was establish for ratio analysis between two companies from 2007-2008.It is most important factors for performance evaluation. The graphical analysis and comparisons are applies between two companies for measurement of all types of financial ratio analysis. Liquidity ratio is conveying the ability to repay short-term creditors and it total cash. It determines perform of short term creditor of both pharmaceutical companies under the three categories such as current ratio, quick ratio and cash ratio. Asset management ratio is measurement how to effectively a company to use and controls its assets. Its also quantify into seven categories for both pharmaceutical companies such as account receivable turnover, average collection period, inventory turnover, account payable turnover ,account payable turnover in days ,fixed asset turnover ,total asset turnover. Profitability ratio is evaluate how well a company is performing by analyzing and how profit was earned relative to sales, total assets and net worth for both pharmaceutical companies. Debt coverage ratio is performing that the property insufficient to collect their mortgage for both companies and market value is perform the stockholder to analysis their future market value of the stock market. Overall analyses are measurement the best one between Beximco and Square pharmaceutical companies.

Antonini, Carla. "An empirical analysis of environmental externalities incidence on financial performance." Doctoral thesis, Universitat de Barcelona, 2016. http://hdl.handle.net/10803/386554.

Aigbefo, Glory, and Mekonen Araia Aseghehey. "Business and Financial Analysis of Arctic Paper Munkedals AB." Thesis, Högskolan Väst, Avd för juridik, ekonomi, statistik och politik, 2011. http://urn.kb.se/resolve?urn=urn:nbn:se:hv:diva-12138.

Jadi, Diara Md. "An empirical analysis of determinants of financial performance of insurance companies in the United Kingdom." Thesis, University of Bradford, 2015. http://hdl.handle.net/10454/14383.

Lewerentz, Eric, and Ellinor Westerberg. "Sentiment analysis of tweets in comparison to a company’s financial performance." Thesis, KTH, Skolan för elektroteknik och datavetenskap (EECS), 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-229766.

Bennett, Andrew L. "An Empirical Longitudinal Analysis of Agile Methodologies and Firm Financial Performance." Thesis, The George Washington University, 2018. http://pqdtopen.proquest.com/#viewpdf?dispub=10982630.

Agile Software Development methods such as Scrum, SAFe, Kanban, and Large Scale Agile (LeSS) promise substantial benefits in terms of productivity, customer satisfaction, employee satisfaction, quality project management overhead, and time to market. As Agile methods have become widespread in the software development industry and begin to take root in the overall business community, there is an increasing need to understand the firm level impact of the implementation of these methods. To build the most effective business case for organizations in and out of the software development industry, it is imperative that a case be made to show that the implementation of Agile frameworks has constituted a competitive advantage. This study investigated the organization level performance impact of switching from traditional methods to the use of Agile frameworks. The results showed that changing from a traditional methodology to an Agile framework resulted in higher return on assets and lower operating expense ratios. The interaction between time and methodology for OER, ROA, or revenues in Table 6 did not show a significant difference, indicating that the null hypothesis cannot be rejected. Thus, we cannot say whether performance differs as a function of type of agile methodology. That said, the non-parametric sign test shows that the median improvement in Operating Expense Ratios were highest for Scrum while SAFe seemed to show a slightly higher improvement in Return on Assets. On the whole, Scrum seems to outperform SAFe in terms of operating efficiency (as measured by OER) but lags in terms of ROA.

Grada, Ali Salem. "Business performance measurement applied to the UK medium-sized coal mining sector since privatisation." Thesis, University of Nottingham, 2000. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.326549.

Shiu, Yung-Ming. "Dynamic financial analysis in the insurance industry : a study of current practices, determinants of company performance, and application of dynamic financial analysis." Thesis, University of Edinburgh, 2004. http://hdl.handle.net/1842/25183.

Wilson, Robert. "An analysis of factors affecting financial performance in English professional team sports." Thesis, Sheffield Hallam University, 2017. http://shura.shu.ac.uk/20981/.

Peters, James D. "Effect of prime contractor financial position on major weapon system cost and delivery performance." Monterey, California : Naval Postgraduate School, 1990. http://handle.dtic.mil/100.2/ADA242431.

Earmia, Jalal Y. "The financial performance of small and medium sized companies: A model based on accountancy data is developed to predict the financial performance of small and medium sized companies." Thesis, University of Bradford, 1991. http://hdl.handle.net/10454/3406.

Ullah, Muhammad. "The Nexus Between Firm's Environmental Performance and Financial Resilience." Thesis, Université Clermont Auvergne‎ (2017-2020), 2020. http://www.theses.fr/2020CLFAD012.

Earmia, Jalal Yousif. "The financial performance of small and medium sized companies : a model based on accountancy data is developed to predict the financial performance of small and medium sized companies." Thesis, University of Bradford, 1991. http://hdl.handle.net/10454/3406.

LUCENA, EDUARDO SANTINI DE. "COMPETITIVE STRATEGIES AND BUSINESS FINANCIAL PERFORMANCE IMPACT: AN ANALYSIS OF THE TELECOMMUNICATIONS INDUSTRY." PONTIFÍCIA UNIVERSIDADE CATÓLICA DO RIO DE JANEIRO, 2011. http://www.maxwell.vrac.puc-rio.br/Busca_etds.php?strSecao=resultado&nrSeq=18311@1.

Pålsson, Moa, and Patric Beijer. "Corporate Sustainability Performance and the Risk of Financial Distress : A Panel Data Analysis." Thesis, Umeå universitet, Företagsekonomi, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-185346.

Ndebele, Ndumiso. "3-month bond option strategies: an analysis of performance from 1998 to 2010 in the South African market." Master's thesis, University of Cape Town, 2011. http://hdl.handle.net/11427/11468.

Elsayed, Khaled Kadry. "An investigation of environmental performance, firm life cycle and financial performance : a panel data analysis of UK firms." Thesis, University of Nottingham, 2004. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.415372.

Wei-Chiung, Yun, and 雲惟炯. "Performance Analysis of Financial Holding Companies." Thesis, 2007. http://ndltd.ncl.edu.tw/handle/91120644527305440699.

Shih, Li-Ching, and 施力中. "The Performance Analysis of Financial Institutions Merger." Thesis, 2019. http://ndltd.ncl.edu.tw/handle/mukufg.

Chen, Lin-Wen, and 陳凌雯. "The performance analysis between financial holding and non-financial holding banks." Thesis, 2005. http://ndltd.ncl.edu.tw/handle/59049084859111593467.

Chlupová, Renata. "Analysis of financial performance of a selected enterprise." Master's thesis, 2015. http://www.nusl.cz/ntk/nusl-189893.

Ludwigová, Barbora. "Analysis of financial performance of a selected company." Master's thesis, 2016. http://www.nusl.cz/ntk/nusl-362907.

LI, YING-SIN, and 李英信. "Visualization Financial Performance Analysis For E-Commerce Industry." Thesis, 2019. http://ndltd.ncl.edu.tw/handle/3n6979.

Susanti, Stefanie, and 潘淑玉. "Analysis of Financial Performance for E-commerce Companies." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/50025444236877614049.

Sun, Wei-Ting, and 孫薇婷. "A CORPORATE SOCIAL PERFORMANCE— CORPORATE FINANCIAL PERFORMANCE BEHAVIORAL ANALYSIS FOR STAKEHOLDER’S." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/88364744437960295501.

Te, Kung Ching, and 孔慶德. "Corporate Governance, Firm Performance, and Financial Risk：an Emprical Analysis of Financial Holding Companies." Thesis, 2006. http://ndltd.ncl.edu.tw/handle/19597709577433354192.

鍾光樺. "Performance Analysis of Stock Recommendations from Professional Financial Magazines." Thesis, 2014. http://ndltd.ncl.edu.tw/handle/21848133404275576979.

Lin, Jui-Ching, and 林瑞晉. "An Analysis Organization Culture, Leadershop Style and Financial Performance." Thesis, 1994. http://ndltd.ncl.edu.tw/handle/29768912491128788985.

LIN, CHIA-WEI, and 林家緯. "Performance Analysis of Stock Recommendations from Professional Financial Magazines." Thesis, 2017. http://ndltd.ncl.edu.tw/handle/b2zwzb.

Bibish, Khaliun, and 卡莉翁. "A Comparison of Financial Performance of Food Companies inMongolia by Using Financial Ratio Analysis." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/52294034387032616683.

CHUNG, HSIAO-LING, and 鍾曉鈴. "Analysis of Financial Consultants’Work Performance, Work Stress and Stress Response under Digital Financial Service." Thesis, 2017. http://ndltd.ncl.edu.tw/handle/64227918263699551664.

Lin, Yueh-sung, and 林岳松. "Analysis on Taiwan financial institutions’operational performance—the application of data envelopment analysis." Thesis, 2010. http://ndltd.ncl.edu.tw/handle/93637767013723700839.

Wingard, Hermina Christina. "Financial Performance of Environmentally Responsible South African Listed Companies." Diss., 2001. http://hdl.handle.net/2263/27648.

Chen, Yi-Ling, and 陳怡伶. "Choosing Financial Indicators and Establishing Stocks Investment Portfolio Performance Analysis." Thesis, 2014. http://ndltd.ncl.edu.tw/handle/36423842423709463060.

Thearmin, Erni, and 鄭美芳. "Financial Performance Analysis of Selected Internet Software and Services Companies." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/30839080414560019328.

Li, Jia-Rong, and 李佳容. "The Analysis of Financial Performance for Non-Profit Proprietary Hospitals." Thesis, 2010. http://ndltd.ncl.edu.tw/handle/958a99.

Tai, Hsing-Hui, and 戴幸卉. "A Competitive Analysis of Autonomous Vehicles Industry with Financial Performance." Thesis, 2016. http://ndltd.ncl.edu.tw/handle/6n3s24.

Liou, Wan-Ping, and 劉婉平. "Financial Performance Analysis for Machine Tool Industry with SQL Database." Thesis, 2018. http://ndltd.ncl.edu.tw/handle/47tum8.

CHAN, CHIA-LIN, and 詹佳霖. "Visualized Financial Performance Analysis for Semiconductor Assembly and Testing Industry." Thesis, 2018. http://ndltd.ncl.edu.tw/handle/jm7a58.

Cheng, Wen-Sheng, and 鄭文勝. "Financial Performance Analysis for Silicon Wafer Industry Using SQL Database." Thesis, 2018. http://ndltd.ncl.edu.tw/handle/bt5nct.

Lee, Chao-Ju, and 李昭儒. "Analysis of the personality traits and performance of financial commissioner." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/28737971041361934446.

HWANG, MEI-JANE, and 黃美珍. "THE COMPARISON ANALYSIS OF FINANCIAL PERFORMANCE OF HOSPITAL IN TAIWAN." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/17502963881531013644.

黃馨眉. "Capital Allocation and Performance Analysis in Financial Holding Company: Empirical Study of Cathay Financial Holdings." Thesis, 2013. http://ndltd.ncl.edu.tw/handle/31323869580968987955.

Chang, Ming-Fei, and 張明霏. "An Empirical Analysis of the Relationship between Operational Quality and Financial Performance in Financial Holding Companies." Thesis, 2012. http://ndltd.ncl.edu.tw/handle/e3a6s4.

Tseng, Wei-Lun, and 曾偉倫. "Value Chain Analysis and Financial Performance of IT Industry in Taiwan." Thesis, 2007. http://ndltd.ncl.edu.tw/handle/98583428911546834511.

Chang, Wen-Nsiang, and 張曜璿. "Assessing with Data Envelopment Analysis- Management Performance of Financial Holding Company." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/67981575333714680132.

Huang, Yin-Chiao, and 黃胤喬. "Dominance, New Products Investment, and Financial Performance - Analysis of Strategy Simulation." Thesis, 2009. http://ndltd.ncl.edu.tw/handle/89113888915923192350.

Wu, Shu-Ling, and 吳淑錂. "Choosing Eight Financial Indicators and Constructing Stocks Investment Portfolio Performance Analysis." Thesis, 2015. http://ndltd.ncl.edu.tw/handle/90126354492833668599.

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Members of the U.S. Financial Sector to Explore Multi-Asset Settlement Using Shared Ledger Technology

Industry proof-of-concept (PoC) investigates potential of shared ledger technology to upgrade liquidity management and financing for domestic users of U.S. Dollars and Treasury securities.

May 8, 2024, New York, NY – In the current financial system, commercial bank money, wholesale central bank money, and securities such as U.S. Treasuries and investment grade debt all reside on separate systems. The tokenization of these instruments may enable settlement on a common regulated venue established under existing legal frameworks.

To explore this potential, members of the regulated U.S. financial sector today announced a Regulated Settlement Network (RSN) proof-of-concept (PoC) that will explore the feasibility of shared ledger technology to settle tokenized commercial bank money, wholesale central bank money, U.S. Treasury securities and other tokenized assets.

The RSN PoC envisions an interoperable network for multi-asset transactions that aim to operate on a 24/7, programmable shared ledger. Building on the results of a previous industry PoC , this project will further research the settlement of tokenized cash and securities on a common system.

The RSN PoC will be conducted in a test environment and will simulate multi-asset transactions in U.S. dollars. The PoC aims to highlight opportunities to improve the operation of multi-asset settlements for domestic users of financial instruments denominated in U.S. dollars.

Key aspects of the PoC include:

• Scope : The PoC will simulate Delivery versus Payment (DVP) transactions denominated in U.S. dollars.
• Industry Collaboration : The PoC reflects a collaborative effort by a diverse group of banks and other regulated financial industry participants to gain further consensus on the use of shared ledger technology in the U.S. financial system.
• Legal Analysis : The PoC will include an analysis of whether the envisioned network may operate in line with existing laws, rules, and regulations or guidance in the United States or if any amendments to applicable legal framework(s) may be necessary.
• Findings : Following the conclusion of the PoC, the group will publish the findings of the project as an important contribution to the understanding of next generation settlement models.
• Future Research : The participants are not committed to any future phases of research once the PoC is complete.

The Securities Industry and Financial Markets Association (SIFMA) will be serving as Program Manager for the RSN PoC. Participants in this project include the following institutions: Citi, J.P. Morgan, Mastercard, Swift, TD Bank N.A., U.S. Bank, USDF, Wells Fargo, Visa, and Zions Bancorp. Deloitte will be providing advisory services, and the participants intend to engage two additional vendors to provide the technology infrastructure and legal analysis for the PoC.

The PoC will also engage a group of U.S.-based project contributors, who will provide subject matter expertise and explore the applicability of connecting certain external solutions and platforms to the multi-asset ledger. The group of project contributors includes: The Bank of New York Mellon, Broadridge, DTCC, The International Swaps and Derivatives Association, Tassat Group, and the MITRE Corporation, who will engage as a non-commercial knowledge contributor.

The New York Innovation Center (NYIC) at the Federal Reserve Bank of New York will be a technical observer in this PoC to gain knowledge on the use of shared ledger technology as infrastructure to conduct transfers between regulated financial institutions, including settling tokenized wholesale central bank money, commercial bank money, and U.S. Treasury securities. The NYIC’s role in this project is narrowly focused on observing the participants’ research and experimentation with tokenized settlement assets.

Industry Commentary:

Charles de Simone, Managing Director at SIFMA which serves as the program manager for the PoC, said, “ This exploration of shared ledger technology is an important initiative to explore innovations working with digital forms of USD cash and securities, as market participants continue to innovate to support efficient, resilient capital markets.”

Debopama Sen, Global Head of Payments at Citi Services said, “A key element of the tokenization thesis is the potential to build more general-purpose venues for the settlement of financial transactions. In today’s digital economy, financial market infrastructures may need to settle a host of digital assets within well-defined legal frameworks. Citi looks forward to exploring the opportunities of this project, which brings together assets that currently live in separate silos into a 24/7, programmable, multi-asset settlement environment – and aims to do that in a collaborative manner across public and private sectors.”

Raj Dhamodharan, Executive Vice President, Blockchain & Digital Assets at Mastercard said, “As blockchain technology continues to mature, it will be critical for public and private organizations to partner closely to explore how it can be applied to solve for real-world pain points and improve efficiencies. The application of shared ledger technology to dollar settlements could unlock the next generation of market infrastructures – where programmable settlements are 24/7 and frictionless.”

Nick Kerigan, Head of Innovation at Swift, said, “Swift is pleased to continue supporting this collaborative innovation initiative as its focus turns towards multi-asset settlement.

Interoperability between ledgers – and between ledgers and existing market financial infrastructures – will be critical if shared ledger technology is to fulfil its potential. As with other initiatives around the world and as a long-term driver of, and advocate for, industry standardization, Swift looks forward to playing a key role alongside commercial banks and market infrastructures in the realisation of this proof of concept.”

Jonathan Prendergast, Head of U.S. Payments Strategy at TD Bank, said, “There is a potential to create a global, on-demand 24-7 system that can support settlement of financial assets – based upon the stability of sovereign fiat currencies – marrying the stability and safety of the current model with the speed and flexibility required in modern global commerce.”

Amanda CR Morgan, Senior Product Manager, Visa Money Movement, said, “It is great to collaborate with our industry partners and the public sector on the US Regulated Settlement Network. RSN presents an opportunity to explore the impact of innovations in shared ledger technology on settlement, an area often constrained by siloed infrastructures and processes. The RSN PoC has the potential to drive improvements and innovation in settlement, transparency, and money movement for the benefit of the market as a whole.”

Arushi Sood Joshi, Head of Distributed Ledger and Digital Assets Center of Excellence at Wells Fargo, said, “Building on prior public and private sector collaboration, Wells Fargo looks forward to continued partnership to explore both assets and deposits on a regulated settlement network. This combination holds the potential to improve speed and availability for USD settlements.”

Harris Simmons, Chairman and CEO of Zions Bancorporation, said, “The development of blockchain-enabled solutions that will lead to self-executing contracts and other promising products and services is exciting, but in order for this technology to achieve its full potential there’s also the need for interoperability between a wide variety of participants. The exploration of the envisioned Regulated Settlement Network is an exciting major step in that direction.”

Horacio Barakat, Head of Digital Innovation for Capital Markets at Broadridge Financial Solutions, said, “Interoperability between tokenized settlement assets could unlock new possibilities for multi-asset transactions. Distributed ledger technology is paving the way for innovative applications in capital markets, and the RSN as envisioned could be a real catalyst for streamlining transfers between financial institutions. Broadridge looks forward to conducting this PoC alongside key partners as a concerted effort to investigate potential shared ledger technology solutions.”

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• Bank of New York Mellon – Ryan Wells, [email protected]
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clock This article was published more than  1 year ago

The seemingly damning indictment of Rep. George Santos

A look at the charges against the freshman GOP congressman and the compelling paper trail that allowed investigators to piece together the case quickly

It turns out the congressman who engaged in a bunch of easily disprovable biographical lies might also have engaged in a bunch of easily provable financial crimes.

That’s one of the biggest lessons from the newly unsealed indictment of Rep. George Santos (R-N.Y.) , whose arrest Wednesday morning has long seemed more like a matter of “when” and “for which thing(s)” than “if.”

Santos was indicted on 13 counts : eight related to an allegedly fraudulent campaign finance scheme, three related to alleged unemployment fraud and two for allegedly fraudulent statements to Congress on his personal financial disclosures. The Justice Department says he faces “a maximum penalty of 20 years in prison for the top counts.”

The charges laid out are perhaps a little smaller-scale than some of the big questions about Santos’s finances might have suggested. But the speed at which Justice Department investigators were able to assemble this case — four months after Santos was sworn in to Congress and less than five months after his many lies were first brought to the nation’s attention — suggests that it wasn’t that difficult to piece together.

As important, the charges indicate a compelling paper trail. The seemingly damning case will also apply pressure on Republicans who, recognizing the importance of Santos’s vote in a closely divided House, have largely shrugged off his lies, despite their helping him get elected, and urged patience as legal matters against him progress.

Here’s a look at the charges.

Counts 1 through 8: A campaign fundraising scheme and money laundering

The indictment describes Santos’s personal communications instructing an associate to falsely tell prospective donors that Santos’s company was a 501(c)(4) nonprofit or an independent expenditure committee that was solely devoted to electing him to Congress and would help run TV ads.

Two $25,000 contributions to the company were then transferred to Santos’s bank accounts, the indictment says, and he used the money for personal debts and “luxury designer clothing.” It says the money was not used for TV ads or any other independent expenditures.

Among the Santos communications cited? In a September 2022 text, he told the associate that the company was “a small C4,” which existed “just to help this race.” In addition, a solicitation to a donor in October 2022 included an attachment saying that the company was created for the “singular purpose, to support that candidate, George Santos” and was “dedicating all its resources” to the campaign. The indictment says Santos “personally approved” the attachment. Later, Santos allegedly texted the donor directly while claiming that the money would be spent “on TV” ads.

Maximum sentence: 20 years in prison for wire fraud (counts 1 through 5), 10 years for unlawful monetary transactions (counts 6 through 8)

Counts 9 through 11: Unemployment fraud

Santos allegedly applied for and received about $25,000 in unemployment insurance benefits under the pandemic-era Cares Act. For 10 months in 2020 and 2021, he claimed to have been unemployed since March 2020, the indictment says.

In fact, the indictment alleges, he was drawing an estimated $120,000 salary as a regional director of a Florida-based investment firm. It says his bank account shows regular deposits from the firm except for one two-month period.

Maximum sentence: 1 year for theft of public money (count 9), 20 years for wire fraud (counts 10 and 11)

Counts 12 and 13: False statements to Congress

The indictment cites both of Santos’s 2020 and 2022 personal financial disclosures to the House (he was also a candidate in 2020) as being fraudulent.

In 2020, he claimed $55,000 in earned income from a company. But records allegedly show he received only $27,555 from that company. He also allegedly failed to report more than $25,000 in income from the investment firm, a separate company.

In 2022, he claimed significantly more income — $750,000 from his company, the Devolder Organization LLC — and an additional $1 million to $5 million in unearned dividends. This, combined with Santos’s extensive self-funding of his campaign, has led to theories about where that money might have suddenly come from for a man who previously earned so little. (Questions certainly remain.)

But the indictment says he didn’t receive those amounts at all and had no bank accounts showing those figures. He also failed to disclose his unemployment insurance income and money from his salary with the investment firm.

Maximum sentence: 5 years for false statements

More on George Santos

Expelled New York Republican congressman George Santos said he will again run for office , this time against one of the Republicans who helped oust him after a House Ethics Committee report found “substantial evidence” that he knowingly violated a litany of ethics guidelines, House rules and criminal laws. Here are the most scathing allegations in the report . Santos was charged in May with a host of financial crimes .

What has Santos lied about? Santos fabricated much of his biography. The list of untruths is long, here are few:

• Education: Santos wrote on a résumé that he graduated from Baruch College in 2010 with a bachelor’s degree in economics and finance. He never attended Baruch. He also lied about his athletic ability, saying he was a star on the Baruch volleyball team .
• Work: Santos said he worked for high-powered Wall Street firms Citigroup and Goldman Sachs. Both companies told the New York Times in December that they had no record of Santos ever working there.
• 9/11: Santos has said his mother was inside one of the World Trade Center towers when they were attacked on Sept. 11, 2001, but immigration records indicate that Santos’s mother wasn’t in the United States on that day .