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In a recent ruling, U.S. District Judge Lewis Kaplan held that a certified public accountant who hid his conviction for insider trading from his teachers at NYUs Stern School of Business wasn’t entitled to the MBA degree that he thought he earned. The former PricewaterhouseCoopers employee, Ayal Rosenthal, pleaded guilty in February 2007 to one count of conspiracy to commit securities fraud after he was accused of disclosing confidential information to his brother about a 2005 transaction between two public companies. This conviction came three months after he finished taking the necessary classes to earn his masters degree in business administration and he was sentenced to 60 days in prison. Once the faculty found out about his conviction, a committee voted to withhold the MBA from him and to alter his grade to F in his professional responsibility course, where he had been a teaching assistant. Subsequently, Rosenthal sued the Stern faculty in 2008.


1. What constitutes insider trading? (Hint:  Look at the SEC news release

2.  Do you think there was anything Rosenthal could have done differently to receive his MBA?

3. Do you agree with the judge’s ruling?

4.  Is Rosenthal still a CPA?


SEC. (2007). SEC Charges Family-Run Hedge Fund With a $3.7 Million Insider Trading Scheme, February 8 (Retrievable online at

Glovin, David (2010). Convicted Accountant Loses Legal Bid for MBA Degree,, September 13 (Retrievable online at  

Stempel, J. (2010). No MBA for NYU student in insider trading scheme, Reuters, September 13 (Retrievable online at