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-   -   Diamond Flush Articles: The Distortion of Truth from the Lederer Files (https://forumserver.twoplustwo.com/29/news-views-gossip/diamond-flush-articles-distortion-truth-lederer-files-1252877/)

stackinsideways 10-01-2012 11:48 PM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
DF is a badass. Shes our Ben Swann and is about to dish out a healthy reality check to Howie.

something tells me he would have been better off doing the interview.

cant wait to read all of this.

markksman 10-01-2012 11:52 PM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by TSU8842 (Post 35087157)
Not having independent audits is really not that unusual in the real world. There are multiple companies that are closely held by their owners (like FTP, although at the end they brought in investors) that do not follow this practice. The majority of private companies place the trust in a a few finance employees who are tasked with producing accurate documents.

Although hindsight is 20/20, and any audit would have revealed the fraud, only publicly traded companies are required to have outside audits.

SOURCE: MBA in Finance.

This is simply not true. To get any sort of credit will require audited financials. Was silly when Howard and Andy talked about them getting investors or buyers. Nobody is going to take you serious if you don't have independently audited financials or they will demand their own audit as part of due diligence.

Please list these 100 million dollar plus companies without independently audited financials. Now show me ones where the ownership consists of non related disparate shareholders.

It is very chicken and egg when they chose to use player funds to grow the company they no longer needed audited financials because they did not need loans or new investors, which they could not get without the financials which would expose the plundering of funds.

External audits are a key part of protecting the financial health of a business through checks and balances. If they had regular external audits like normal people this would never have happened. It is that simple.

What is funny is people get put off by Howard saying he was not required to get an independent audit but nobody asked him why he actually chose not to do it.

Picasso 10-02-2012 12:12 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
There were a few quotes she listed that I really didnt understand how they played into the "argument" she was making.

Quote:

Since Howard seemed to enjoy invoking conditions set forth by their operating agreement, I will quote one pertinent line from the agreement that puts that conversation in context: “Members have no managerial authority. The members, other than the Board and the Managers, shall have no power to participate in the management of the Company, except as expressly authorized by this Agreement of the Articles of as otherwise expressly required by the Act.”
That is exactly what Howard told Juanda [albeit a bit more politely]; if you arent on the board, then you do not run the company. if you want to run the company, get rid of the board and/or ray. That quote completely backs up what Howard said. Is that what she was trying to do? Her wording seems to suggest this somehow contradicts what he said.

Quote:

“The Managers shall perform managerial duties in good faith, in a manner reasonably believed to be in the best interest of the Company and its members and with such care, including reasonable inquiry, as ordinarily prudent persons in a like position would use under similar circumstances. In performing duties, a Manager shall be entitled to rely on information, opinions, reports or statement, including financial statements or other financial data, of the following persons or groups, unless it has knowledge concerning the matter in question that would cause such reliance to be unwarranted, and provided that such Manager acts in good faith:

-any member, officer, employee or other agent of the company whom such Manager reasonably believes to be reliable and competent in the matters presented;

any attorney, independent accountant or other person as to matters which such manager reasonably believes to be within such person’s profession or expert competence; or
a committee upon which it does not serve, duly designated in accordance with a provision of the Articles or this Agreement as to matters within its designated authority which committee such Manager reasonably believes to merit competence.”
Bolding mine. This again reaffirms exactly what Howard said. Yes, if they had gotten independent accountants he would be allowed to listen to them, but nowhere in there at all does it say that he must consult all of those sources, or even that he has to consult any. Further, it says that he is allowed to take what other managers say about finances at face value unless he has reason to believe it is incorrect which he didnt until April. Again, everything she quotes supports exactly what Howard said.

I dunno, I mean I think Howard ****ed up big time and that there is plenty he isnt telling us, but this first installment seems like she is really grasping for straws. I dont want people to think Im a Howard defender, because I dont think the poker community should just let those guys [including Ivey] show up to tournaments without getting some serious questions asked, but honestly, read the things she is quoting and ask yourself if her conclusions are correct. Unless I am severely misinterpreting these quotes, they support Howard and not DF. Hopefully the next installments will be more thorough and less ambiguous in regards to DF's implications.

MrHickey 10-02-2012 01:58 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
anyone who is capable of reading this ridic tl;dr thing pls post good cliffnotes tnx

Gioco 10-02-2012 02:26 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
In order to make an accurate presentation regarding the operation of FTP, a journalist needs to employ a person with substantial experience in the actual operation of similar organizations. This means using a CPA, MBA or lawyer with years of exposure to business organizations.

Quoting verse and word of the operating agreement and comparing that to actions of some persons is uninformative. Every LLC has an Operating Agreement and in virtually every case begins to violate the LLC from the first day of actual operation. Courts recognize this practical problem and, usually, will not hold managers or members liable for such violations if they were known to most other members and no one objected.

Most LLC's, with just a few members, are operated fairly informally and on a friendly basis. Anyone who questions an action and receives a blunt response quoting the Operating Agreement as a reason for a less friendly response should be very concerned.

The real substance of what went wrong won't be found in nit picking the Operating Agreement to look for violations by the managers. Enough people (probably members and employees) with knowledge need to be interviewed by someone prepped by a business specialist and those interviews integrated into a chronological history. If done properly, that chronological history will make clear what went wrong, who was responsible for it and why controls were not in place to prevent it.

In response to some above discussion regarding independent audit controls. My experience is that any business organization of this size without independent audit controls will be stolen from, most likely by its employees or officers, but certainly by someone.

tamiller866 10-02-2012 02:54 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by MrHickey (Post 35089267)
anyone who is capable of reading this ridic tl;dr thing pls post good cliffnotes tnx

The blog is Diamond's take on Part 1 of the PN interview, and since part 1 was essentially nothing but "I don't knows" and "California LLCs", there isn't much for her to dispute other than semantics.

Cliffs: http://www.blogcdn.com/www.joystiq.c...e_along_sm.jpg

MrHickey 10-02-2012 02:59 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
ty

yolo 10-02-2012 05:01 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Gioco: You are making a good point in your whole comment, but it seems to me that DF article was more focused on comparing HL answers in his ITW to some factual reference rather than to fully establish his responsability from a legal standpoint. I think it was enough to underly some obvious contradiction between HL answers and reality and can not be called uninformative (for me at least).

markksman: Keep posting, it's so anoying to see that many ppl buying HL version.

DF: Thank you.

yolo 10-02-2012 05:14 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by Gioco (Post 35089494)
In response to some above discussion regarding independent audit controls. My experience is that any business organization of this size without independent audit controls will be stolen from, most likely by its employees or officers, but certainly by someone.

Story telling time ! Tell us more about what could possibly go wrong and maybe few real life examples ?

I have to admit that it is mostly to satisfy my curiosity, but i think that it has it's place in this thread as it would help 2p2ers not familiar with the business world to understand how ridiculous this absence of audit is in the FTP case.

Moneydraw 10-02-2012 06:55 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
http://www.youtube.com/watch?v=wq-poN6sLF8

alternative to clicking on the link:
search for "How to Catch a Liar (Assuming We Want To)" in youtube

the BIDWAH 10-02-2012 07:26 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by TSU8842 (Post 35087157)
Not having independent audits is really not that unusual in the real world. There are multiple companies that are closely held by their owners (like FTP, although at the end they brought in investors) that do not follow this practice. The majority of private companies place the trust in a a few finance employees who are tasked with producing accurate documents.

Although hindsight is 20/20, and any audit would have revealed the fraud, only publicly traded companies are required to have outside audits.

SOURCE: MBA in Finance.

true, most companies in the real world do not have independently audited accounts as most companies (90%+) have an annual turnover <2mil and are confined to a single country. these companies are generally not in a financial position to employ independent auditors to go over their books and any decent CPA will be able to a good job for such a firm. however, any global company turning over >2mil on an annual basis that is not having it's financial records independently audited is asking for trouble. trouble like having a massive misjudgment on liquidity issues in a company operating in an industry that is subject to potentially drastic regulatory/legal rulings that would force a run on a firms accounts payables (in this instance players with positive balances) that would force a firm into insolvency. this is, IMO, a gross dereliction of duty of the board, whos responsibility it is to ensure the engagement of said independent auditors on behalf of a firms shareholders who elect the board to perform such duties. if the shareholders in this case had not been receiving such ludicrous distributions over the past few years, they would be lining up to sue the board members of Full Tilt.

Source: 7 years experience in forensic accounting/financial fraud investigation

MicroRoller 10-02-2012 07:51 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by TSU8842 (Post 35087157)
Not having independent audits is really not that unusual in the real world. There are multiple companies that are closely held by their owners (like FTP, although at the end they brought in investors) that do not follow this practice. The majority of private companies place the trust in a a few finance employees who are tasked with producing accurate documents.

Although hindsight is 20/20, and any audit would have revealed the fraud, only publicly traded companies are required to have outside audits.

SOURCE: MBA in Finance.

Is it also not unusual to not have independent audits in a company where some of the owners think the CEO is stealing and multiple people approach the board about the issue?

And just because something is not unusual doesn't make it right. It's not unusual for people to have a drink or two with dinner, not realize how impaired they are and get behind a wheel. If they get into an accident or pulled over they'll get a DUI.

Bubbleblower 10-02-2012 07:56 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by MrHickey (Post 35089267)
anyone who is capable of reading this ridic tl;dr thing pls post good cliffnotes tnx

The "deadline" didn't do the article much good.

So far I missed where HL distorted the truth.


These audits should have been in place, but that was not in the companies culture. Eventhough there were fractions most owners were also personal friends.
Audits would have been a delicate issue.
But that will be in one of the next articles no doubt.

YouGotPLOWned 10-02-2012 09:15 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by Bubbleblower (Post 35091266)
The "deadline" didn't do the article much good.

So far I missed where HL distorted the truth.


These audits should have been in place, but that was not in the companies culture. Eventhough there were fractions most owners were also personal friends.
Audits would have been a delicate issue.
But that will be in one of the next articles no doubt.

I cant believe people are buying this ****. Companies culture, delicate issue. Fml. Its a global company turning over a billion dollars annually. Lets not forget the guys driving the ship here are not dribbling ****ing spastics. These are intelligent, well educated men.

As repetitively stated by some posters with real world business experience, the only reason they didnt have independent auditing is they had something to hide.

Rob999 10-02-2012 09:51 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by YouGotPLOWned (Post 35091814)
I cant believe people are buying this ****. Companies culture, delicate issue. Fml. Its a global company turning over a billion dollars annually. Lets not forget the guys driving the ship here are not dribbling ****ing spastics. These are intelligent, well educated men.

As repetitively stated by some posters with real world business experience, the only reason they didnt have independent auditing is they had something to hide.

Ya got that right. This whole "we had a billion dollars coming in a year maybe we were wrong to let our stupidest, sleaziest board member Ray write down how much we had without anybody questioning it" answer is getting old.

Bubbleblower 10-02-2012 09:53 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by YouGotPLOWned (Post 35091814)
I cant believe people are buying this ****. Companies culture, delicate issue. Fml. Its a global company turning over a billion dollars annually. Lets not forget the guys driving the ship here are not dribbling ****ing spastics. These are intelligent, well educated men.

As repetitively stated by some posters with real world business experience, the only reason they didnt have independent auditing is they had something to hide.

If they had something to hide that would only make it more delicate.
At some point at least Ray must have felt like he had to.
If the culture had been different he would never have gotten that chance.

Eli808 10-02-2012 09:57 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by MrHickey (Post 35089267)
anyone who is capable of reading this ridic tl;dr thing pls post good cliffnotes tnx

Its just a opinon on the matter. DF never interviewed HL so she went over the tapes and is giving her opinon

leconnaisseur 10-02-2012 10:05 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
a lot of standard business practices that could go wrong. equity and range...

poorolrich 10-02-2012 10:22 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by Eli808 (Post 35092128)
Its just a opinon on the matter. DF never interviewed HL so she went over the tapes and is giving her opinon

You do realize that DF has been investigating the FTP fiasco since 'black friday'??
I'm sure her opinion comes from more than the tapes.
But, I'm sure you are an expert on D F also. Since you have answered a question or two about 'what' the new FTP is going to do you are also an expert on them also. You are also an expert on what the DOJ is going to do. Personally I hope you are correct regarding the DOJ but until you offer a 'source' your opinions will be taken with a grain of salt.

PokerkidRJK 10-02-2012 10:35 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by TSU8842 (Post 35087157)
Not having independent audits is really not that unusual in the real world. There are multiple companies that are closely held by their owners (like FTP, although at the end they brought in investors) that do not follow this practice. The majority of private companies place the trust in a a few finance employees who are tasked with producing accurate documents.

Although hindsight is 20/20, and any audit would have revealed the fraud, only publicly traded companies are required to have outside audits.

SOURCE: MBA in Finance.

Without wanting to come across as a massive douche- in the UK & Ireland it is required that companies over a certain size have to have an auidt by law (regardless of ownership structure) I find it hilarious that no one has actually questioned the auditor of FTP as to how they demonstrated that the cash on hand in the balance sheet was actually there?

I remember seeing some accounts from 2010 and there was no qualification in the audit report. Therefore the auditors must've been happy there was the cash in hand.

EGarrett 10-02-2012 10:48 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by teddyFBI (Post 35085549)
I hope so...

This first installment was pretty devoid of new, salacious, or incriminating info. I'll take DF at her word for now, though, that she's got something more substantive to offer.

A suggestion, which I'll try to make in the least-douchey way possible: I think you should spend more time formatting & checking your article for grammar, vocab, and punctuation. I'd like your articles to get taken seriously, especially if they're to form the basis for a revelatory assessment of FTP's implosion and Howard's personal failures. But that article was chalk full of errors, and in several places unclear as to whether you were recapping Howard's testimony, giving your own commentary, or simply laying out known facts.

The phrase is "chock-full." Not "chalk full."

Eli808 10-02-2012 11:00 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by poorolrich (Post 35092334)
You do realize that DF has been investigating the FTP fiasco since 'black friday'??
I'm sure her opinion comes from more than the tapes.
But, I'm sure you are an expert on D F also. Since you have answered a question or two about 'what' the new FTP is going to do you are also an expert on them also. You are also an expert on what the DOJ is going to do. Personally I hope you are correct regarding the DOJ but until you offer a 'source' your opinions will be taken with a grain of salt.

I do understand she has been investigating them. The point I wanted to make was we already heard from two sources who inteviewed HL and provided transcipts of the talk. It makes no sense to have someone else come along and write their opinon of these interviews. We don't need HL remarks hashed again, what is needed is interview new board members.

insidemanpoker 10-02-2012 11:06 AM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by Eli808 (Post 35092683)
I do understand she has been investigating them. The point I wanted to make was we already heard from two sources who inteviewed HL and provided transcipts of the talk. It makes no sense to have someone else come along and write their opinon of these interviews. We don't need HL remarks hashed again, what is needed is interview new board members.

This is an awful post. DF isn't a random person giving an opinion. I'm not sure if you are new to this issue or something but she clearly knows more than probably everyone but Chris, Howard, and Ray about what really went down. If HL was lying, she is one of our best chances to find out the truth, why would we not want to hear it? Just because he already gave two interviews to people who weren't as clued in as she was and so were unable to call him out on his lies? We can wait and see what she publishes this week and reserve judgement until after it's all out there, but my god why discourage the information from coming out.

MicroRoller 10-02-2012 12:17 PM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by insidemanpoker (Post 35092746)
This is an awful post. DF isn't a random person giving an opinion. I'm not sure if you are new to this issue or something but she clearly knows more than probably everyone but Chris, Howard, and Ray about what really went down. If HL was lying, she is one of our best chances to find out the truth, why would we not want to hear it? Just because he already gave two interviews to people who weren't as clued in as she was and so were unable to call him out on his lies? We can wait and see what she publishes this week and reserve judgement until after it's all out there, but my god why discourage the information from coming out.

DF is an anonymous person giving her interpretations based on information she obtained from her anonymous sources. How is that better than hearing directly from people within FTP as Eli stated? These people will likely come forward at some point if people stop calling them thieves.

It's fairly easy to tell Lederer was lying at some points. There were contradictions within his own interviews as well as discrepancies between other things we've heard and inconsistencies between generally accepted and observed practices.

A lot has already been written on the subject. My favorite were Bill Rini's first two posts on the Poker News interview. He also recently posted his thoughts on the PokerCast interview here http://www.billrini.com/2012/10/01/h...2p2-pokercast/

DF is late to the game on this one. While she may have some more inside information and people on here will trust she's not making up the source material she has, it would have more weight if it was coming directly from named sources. So while DF's post will have value it might not be that much at this point.

I was wondering if Lederer had planned to cancel the DF interview from the start for a couple of different reasons. I'm adding "to keep her quiet during the peak of the buzz" to the list.

yolo 10-02-2012 12:21 PM

Re: Diamond Flush Article: The Distortion of Truth from the Lederer Files
 
Quote:

Originally Posted by Eli808 (Post 35092683)
It makes no sense to have someone else come along and write their opinon of these interviews. We don't need HL remarks hashed again, what is needed is interview new board members.

You obviously did not follow this story well enough, DF is not simply commenting the ITW: she is using the result of her long investigations to point out where and how HL "distorted truth/lied" along his ITW.

Pokernews guy and pokercast team had nowhere near the amount of properly sourced information and work that DF had put in... it is ridiculous to compare.


Quote:

Originally Posted by insidemanpoker (Post 35092746)
she clearly knows more than probably everyone but Chris, Howard, and Ray about what really went down

Hilariously, this is probably very true.


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