Albert Meyer died recently, having succumbed to lung cancer on February 3. His passing is sad for 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 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 with Deloitte, and later he taught accounting at the University of Natal. In 1991, he accepted a position at Spring Arbor University in Michigan.
While at Spring Arbor, Meyer noticed that the university was investing significantly 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 because of various benefactors who donated the money anonymously. Albert Meyer studied New Era and questioned the business model and information he had about its philanthropy. Because things did not make sense, he tried to persuade investors and regulators that something was amiss 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 at Martin Capital Management in 1996 and performed financial accounting analyses of various corporate reports. For example, he found significant deficiencies by Coca-Cola, and The New York Times published the story about Coca-Cola. The result was a steep decline in their stock prices.
In 1999, he joined David Tice’s Behind the Numbers. He issued a number of significant reports, finding major holes in Tyco’s accounting and in Enron’s accounting. His findings on Enron were read by clients of Tice’s firm, and short sellers using that information made huge profits.
In 2002, Meyer created his own research firm, Second Opinion. He continued to analyze financial reports by dozens of major corporations, supplying his clients with much-needed information about the accounting shortcomings in these documents. His reports make great case studies of what is wrong in financial accounting.
In 2006, Albert Meyer initiated Bastiat Capital. He demonstrated that one can create a portfolio that consists only of stocks whose companies had relatively clean accounting statements. For example, he strongly preferred firms that had no stock options for managers. His portfolio outperformed the S&P 500 every single year.
I was introduced to Albert shortly after the Enron story broke and we quickly became good friends. I was writing columns and giving interviews about the bending of accounting rules seen in some financial reports We hit it off instantly and, from that point on, frequently shared notes about questionable and corrupt practices in various published accounting documents. I was always impressed by the quality and the depth of his work.
Albert’s fine work in promoting professionalism and ethics in accounting practice was recognized by the American Accounting Association, an organization for university accounting professors, in 2005. Albert justly deserved that award for his tireless efforts to purify accounting of its many transgressions. My wife and I attended that meeting in San Francisco and had a lovely chat one afternoon with Albert and his wife Melenie.
Another personal remembrance 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 problems in financial accounting and exhorted students to be more discerning in their analysis and to exhibit greater professional skepticism. When we move in a herd, we create an environment ripe for shenanigans.
Albert and I co-authored one paper, published in Accounting Today, and I found Albert the consummate partner, making his contribution early and precisely. We were planning more, but alas, it was not to be.
I found Albert friendly, loyal, knowledgeable, and of the utmost integrity. I know that our days on this earth are numbered, but he passed much too soon. His contributions were considerable, and evidence of a life well-lived.
This essay reflects the author’s opinions, and not necessarily those of the Pennsylvania State University.
