Recently, 'a' graced us with some more pearls of wisdom from Cory:

Hamasaki: SEC deadline for brokerage compliance statements largely ignored. Now for the bad news...

Just saw an article in NEXIS, the WSJ might have picked it up.

Apparently the SEC or one of those stock market regulators gave brokers a deadline by which they had to issue legally binding "We're Ready for Y2K" letters.

The deadline passed and, well, 5 or 6, I forget how many, got their letters in. That's the good news.

The bad news is that the letters said, they *will* be ready in a couple months.

I'll look for a web copy of the *good news* and stick it on my page and here.

Scary stuff. Too bad the actual facts are just about directly opposite of what Cory posts.

The "rest" of the story can be found here:

Securities industry: Ready for Y2K

....

Levitt said only four broker-dealers and one transfer agent failed to meet an Aug. 30 deadline on compliance with SEC Y2K guidelines. The firms have until Sept. 15 to to meet the requirements. If they fail to do so, they must stop taking new business and will be required to wind up operations by Dec. 1, Levitt said.

From the SEC site:

http://www.sec.gov/rules/final/34-41661.htm

Only those not compliant are to file with the SEC. And those filing will be published on the SEC site.

So yes, only a handful filed. And yes, they said they would be done, because the rest are done.

Trying to help Cory out here, so he can post this "news" on his site.

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999

Answers

Hoffmeister=government shill

-- Shill Detector (amused@shills.com), September 10, 1999.

I notice the article says "... SEC Y2K compliance" Does the SEC definition have any ambiguous "outs" for the insiders in the event there is a problem? It seems as though shades of gray usually enter these definitions to allow a cya to take place. Also, we are to expect minor snafus. What are minor snafus? And why should we expect those if everything is totally tested and compliant? How many minor snafus do securities firms experience daily? Will that number be the same? Skeptical minds want to know.

-- enough is (enough@enough.com), September 10, 1999.

Are the required SEC Y2K compliance statements from audited work?

Or simply word product?

Roll 7 or 11

000

-- no talking please (breadlines@soupkitchen.gov), September 10, 1999.

Hoffmeister:

I can't afford to share your optimism, but do very much read your posts carefully. You bring an intellectual and thoughtful flair that other pollys often lack. If the government has hired you as their shill, that is soothing to me in a sick sort of way. On the other hand, if Y2K Pro is on the payroll, the Feds are toast almost by definition. On the off-chance Hoffmeister and Y2K Pro are one-and- the-same, you're wasting your talent by not going to Hollywood. At this point in time, we are heading deep into the "Heart of Darkness" where everything seems a little surreal.

P.S.-Out of curiousity, any chance that you could give a little bit of a "bio" so that I know where you're "coming from"?

-- Dave (aaa@aaa.com), September 10, 1999.

As for auditted work, according to the SEC:

http://www.sec.gov/ rules/final/34-40608.htm

The rule adopted today requires each broker-dealer that is required to file Part II of Form BD-Y2K by April 30, 1999, to include with that filing a report prepared by an independent public accountant regarding the broker-dealers process for addressing Year 2000 Problems.

I believe this applies to BD's with "a minimum net capital requirement of $100,000 or greater".

As for background, this thread contains some:

A "Pollyanna" View on Large Systems

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

BTW, "Shill Detector", John says hi.

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

---no talking please asked:

Are the required SEC Y2K compliance statements from audited work?

Or simply word product?

---Hoff replied:

"...required to file Part II of Form BD-Y2K by April 30, 1999, to include with that filing a report prepared by an independent public accountant regarding the broker-dealers process for addressing Year 2000 Problems."

---no talking please ponders:

The questions seem to remain unresolved.

The CPA's report appears to be word product without physical proof of the results required. Otherwise, a physical inspection of property with associated quality assurance would be required and specified in the rule.

Roll 7 or 11

000

-- no talking please (breadlines@soupkitchen.gov), September 10, 1999.

Well, you asked if the statements were from "auditted work".

The SEC site states:

SOP 98-8 addresses commenters concerns regarding an attestation engagement by providing independent public accountants a list of procedures to follow when preparing its report on the broker-dealers process for addressing Year 2000 Problems. More specifically, these procedures require an independent public accountant to consider the broker-dealers plan for addressing Year 2000 Problems, its efforts to repair its affected computer systems, its tests of completed repairs, and its efforts to monitor the progress of the Year 2000 project. In addition, through SOP 98-8 the independent public accountant is provided a reporting format to use when reporting the results of executing the specified procedures. Finally, SOP 98-8 provides the independent public accountant with guidance on how to execute the procedures and how to report any exceptions identified.

SOP 98-8 is available here:

http://www.aicpa .org/store/products/014916.htm

But it costs $13.00 to access.

Seems to answer whether they are "auditted".

What else are you looking for?

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

"...through SOP 98-8 the independent public accountant is provided a reporting format to use when reporting the results of executing the specified procedures. Finally, SOP 98-8 provides the independent public accountant with guidance on how to execute the procedures and how to report any exceptions identified."

---This doesn't directly reply to the very simple questions previously asked.

---no talking please asked:

Are the required SEC Y2K compliance statements from audited work?

Or simply word product?

---The questions remain unresolved.

Roll 7 or 11

000

-- no talking please (breadlines@soupkitchen.gov), September 10, 1999.

It's apparent the results were audited. Which literally answers your question.

Which also has no real bearing on the point of the thread.

But, for clarification:

Just what type of audit would answer your question?

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

Considering the nature and value of the answer we seek, I prefer the following description: thorough.

I bring your attention to SOP 98-8 and SOP 98-8 table of contents respectively:

http://ftp.aicpa.org/public/download/members/div/auditstd/sop98-8.pdf

http://ftp.aicpa.org/public/download/members/div/auditstd/tableofc.pdf

//////////////////////////////////////////////////////////////////////

And I quote from page 6:

Procedures to Be Performed

21. The agreed-upon procedures to be performed are directed toward the identification of selected characteristics of the process planned and implemented by each entity to assess, remediate, test and monitor the entitys year 2000 readiness. Thus, the agreed-upon procedures engagement provides no assurance as to whether an entity or the parties with which an entity does business will be year 2000 ready. For that reason the practitioner's agreed-upon procedures report should include the following disclaimer.

Our procedures also do not provide assurance that the entity is or will be year 2000 ready, that its year 2000 project plans will be successful in whole or in part, or that parties with which the entity does business will be year 2000 ready.

//////////////////////////////////////////////////////////////////////

I believe that this quote from page 6 of the referred document, and others within its contents, clearly speak for themselves; as well as, answer my original questions.

-- no talking please (breadlines@soupkitchen.gov), September 10, 1999.

Thanks for the link.

The SEC asked that the specific procedures they required responses to be audited, instead of general attestations to "Y2k Readiness".

So be it. As I've said before, y'all clamored for independant audits and such. When presented, they then aren't good enough.

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

Found it!

It was from Dow Jones:

"The letters come in reponse to an SEC requirement that registered broker/dealers and non-bank transfer agents to notify the agency, by Aug 31, that their mission-critical computer systems are year 2000 compliant or that their computer systems will be fixed no later than Nov. 15. As of Friday, only these five firms had notified the SEC of their year 2000 status. 'We're expecting more." said SEC spokesman John Heine."

Yeah, we're expecting more FAILURES?

Hoffy, you should be ranting at Dow Jones and the SEC.

-- cory (kiyoinc@ibm.XOUT.net), September 10, 1999.

Hoffy,

You should be appologizing to Cory and this forum in general. Can you possibly admit that you were wrong?

-- Gordon (gpconnolly@aol.com), September 10, 1999.

Something doesn't add up here. Hoff says ver few were required to report under the rules, but doesn't say how many exactly. And Cory says 5 did so, and the very few was apparently more. What's the real story? If 500 should have reported and only 5 did, Cory is correct. If 8 should have reported and 5 did, Hoff is correct. Or is the story more complicated? Typically, these things are very complex, but get oversimplified by whoever's ox is being gored. But I can't tell whose it is yet.

-- Flint (flintc@mindspring.com), September 10, 1999.

Another definitive answer from Flint.

-- (zzzz@zzzz.zzzz), September 10, 1999.

No Talking Please, just want to say that I really like your handle, along with the mail address. That is one of the best, most original, ones I've seen lately. :-)

-- Gordon (gpconnolly@aol.com), September 10, 1999.

Thanks Gordon

-- no talking please (breadlines@soupkitchen.gov), September 10, 1999.

I think that's Flint's way of apologizing for Hoff.

-- a (a@a.a), September 10, 1999.

Apologize? Too funny.

Y'all did read the links, right?

Like the SEC, you know, the actual one creating the rule, that states:

As proposed, the rule required any broker-dealer that has or is presumed to have a material Year 2000 problem at any time on or after August 31, 1999, to immediately notify the Commission and its DEA of the problem. The Commission received one comment on this provision which supported the notice procedure to the Commission and the DEAs.

Or the CBS story?

How about the Wall Street Journal, which on Sept 7th said:

To make sure firms are ready for 2000, the SEC required broker-dealers and nonbank transfer agents to inform the agency if their systems weren't in compliance by Aug. 31, 1999. As of Friday, seven broker-dealers and one nonbank transfer agent had filed reports indicating they aren't Y2K compliant, according to the SEC.

Yes, my guess is Heine meant more to be filed as not compliant. In fact, at least 3 more filed between Cory's quote and the WSJ article.

Apparently, everyone but Cory thinks only the non-compliant firms were supposed to file.

But OK, I'll apologize. For pointing out the BS. I'm sorry.

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

I can't figure out what's going on here. Are Hoff's quotes about those that have filed, or those that haven't, because...

I do find this very interesting:

"Only those not compliant are to file with the SEC."

Wow, these are really tough reporting requirements. So, if you do absolutely nothing, you are considered compliant? Somethin' just ain't right here!

Tick... Tock... <:00=

-- Sysman (y2kboard@yahoo.com), September 10, 1999.

Oops, forgot over at Westergaard:

ht tp://www.wbn.com/y2ktimebomb/Industry/Finser/gvann9936.htm

Pursuant to Rules 15b7-3T and 17Ad-21T under the Securities Exchange Act of 1934, any broker-dealer and non-bank transfer agent that has or is presumed to have a "material" Year 2000 Problem on or after August 31, 1999 must immediately notify the SEC and cease to conduct its securities business. A problem is considered material if (1) any mission-critical system incorrectly identifies any date in the year 1999 or 2000, and (2) the error impairs, or if uncorrected is likely to impair, any mission-critical system.

But hey, everyone else could be wrong, and only Cory got the rules right.

-- Hoffmeister (hoff_meister@my-deja.com), September 10, 1999.

Reminds me of the way Congress passes their pay raises...

-- a (a@a.a), September 10, 1999.

Yes, the cries for Cory to "admit he was wrong" and "apologize" are truly deafening.

Not to worry, though. My "geekvine" tells me Cory and the "bright" side of the force may have "discovered" some of this, all on their own(?).

-- Hoffmeister (hoff_meister@my-deja.com), September 12, 1999.

Y2K CANNOT BE FIXED!


(I dunno, I'm just throwing it in to see what it will do.)

-- Jack (jsprat@eld.net), September 12, 1999.