A memorial to Albert Meyer

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Albert Meyer died recently, after succumbing to lung cancer on February 3. His passing is sad for his family and friends and for those who love truth and fairness in accounting reports. I have known Albert since the turn of the century and have always found wisdom in his thoughts and writings and warmth in our conversations.

Born in 1951 in Cape Town, South Africa, Meyer became a Chartered Accountant in 1983 and began his career at Deloitte, then taught accountancy at the University of Natal. In 1991, he accepted a position at Spring Arbor University in Michigan.

While at Spring Arbor, Meyer noticed the university was investing heavily in the Foundation for New Era Philanthropy. John Bennett created this foundation, which promised donors who contributed at least $25,000 and left the funds in the foundation for six months a 100% return. Bennett claimed this was possible thanks to various benefactors who donated the money anonymously. Albert Meyer studied New Era and questioned the business model and the information he had about his philanthropy. Because things didn’t make sense, he tried to persuade investors and regulators that something was wrong, but was ignored by many. After a few years, the Securities and Exchange Commission investigated and determined that Meyer had been correct. It turned out that New Era was a Ponzi scheme; and John Bennett was convicted of money laundering and wire fraud.

Albert accepted a position with Martin Capital Management in 1996 and performed financial accounting analyzes of various corporate reports. For example, he found significant shortcomings at Coca-Cola and the New York Times published the Coca-Cola story. The result was a sharp decline in their stock price.

In 1999, he joined David Tice’s Behind the Numbers. He published a number of important reports, finding major flaws in Tyco’s accounting and in Enron’s accounting. His findings on Enron were read by clients of Tice’s company, and short sellers using this information made huge profits.

In 2002 Meyer started his own research company, Second Opinion. He continued to analyze the financial reports of dozens of large companies, providing his clients with much-needed insight into the accounting flaws in those documents. His reports are excellent case studies of what’s wrong with financial accounting.

In 2006, Albert Meyer launched Bastiat Capital. He demonstrated that one can create a portfolio consisting solely of stocks whose companies have relatively clean accounting records. For example, he strongly preferred companies that did not offer stock options to executives. His portfolio has outperformed the S&P 500 every year.

I was introduced to Albert shortly after the Enron story broke and we quickly became good friends. I wrote columns and gave interviews on the circumvention of accounting rules observed in certain financial reports. We hit it off instantly, and from then on frequently shared notes about questionable and corrupt practices in various published accounting documents. I have always been impressed by the quality and depth of his work.

Albert’s excellent work in promoting professionalism and ethics in accounting practice was recognized by the American Accounting Association, an organization for university professors of accounting, in 2005. Albert was rightly deserving of this award. for his tireless efforts to clear the accounts of his many transgressions. My wife and I attended this meeting in San Francisco and had a lovely chat one afternoon with Albert and his wife Melenie.

Another personal memory was in the fall of 2017. The Penn State Accounting Society asked for a suggestion for an outside speaker, and I mentioned Albert. They invited him to come and he accepted. Using his analysis of the New Era scandal as an example, he discussed financial accounting issues and urged students to be more discerning in their analysis and exercise greater professional skepticism. When we move in a herd, we create an environment for shenanigans.

Albert and I co-wrote an article, published in accounting today, and I found Albert the consummate partner, contributing early and with precision. We expected more, but alas, that was not the case.

I found Albert to be friendly, loyal, knowledgeable and of absolute integrity. I know our days on this earth are numbered, but he died far too soon. His contributions were considerable and reflect a full life.

This essay reflects the views of the author, and not necessarily those of Pennsylvania State University.

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