About A&M
Client Success Stories: Data Mining and Data Analytics
Alvarez & Marsal’s Forensic Technology and Data Mining professionals have worked with clients across a wide variety of industries, including energy, insurance, manufacturing and information technology. Drawing upon the depth and breadth of our capabilities, we have successfully assisted clients with projects related to billing and electronic trading litigation, class action lawsuits, reconciliation of ledger accounts, accounting restatements and stock options backdating.
- Billing and Electronic Trading Litigation
- Class Action Lawsuits
- Reconciliation of Ledger Accounts
- Accounting Restatements
- Stock Options Backdating
Billing and Electronic Trading Litigation
One of the largest electricity delivery companies in the Southwest was involved in class action litigation related to its billing activities. Our technologists designed a data warehouse by extracting more than 120 million records from the company’s mainframe-based billing system. We provided trend analysis and quantification to economic and accounting teams to assess the amount of over-billing that had occurred over an eight year period. The client settled the case and saved more than $200 million.
One of the largest insurance companies in the U.S. was settling a class action lawsuit related to its sale of insurance policies in the 1980s. We managed a team of 60 professionals and developed a data warehouse to extract several million insurance policy documents from the company’s mainframe. Within four weeks, the team performed quality assurance on the records and gathered data analytics for actuaries, who later examined the data and developed damage models. The client settled the matter out of court.
Reconciliation of Ledger Accounts
An information technology outsourcing firm required assistance in reconciling child-care payments it received and disbursed. We led a team of approximately 20 forensic professionals, including forensic data mining specialists and company IT and operations personnel, to respond to a state regulatory agency’s request to audit five years of payment processing data. Our analysis uncovered approximately $2.5 million in overpayments and incorrect payments. Based on the findings, the firm took action to implement controls on processes that contributed to the $2.5 million loss.
A NASDAQ-listed Internet services firm needed assistance in calculating accounting adjustment entries involving revenue recognition issues. It had not filed three 10-Qs and one 10-K, and was in danger of being delisted. We led a team of approximately 35 forensic professionals, including attorneys, in-house contracts managers and company IT personnel, to calculate accounting adjustments for nine fiscal quarters over a period of eight weeks. We calculated the revenue recognition adjustment by using data mining to electronically compare invoices to contracts. The client filed its financial statements on time and avoided being delisted.
We assisted a network appliance manufacturer in the analysis of data related to 30,000 stock option grants. In this role, we extracted and analyzed information from Equity Edge® software, and developed models to book expenses related to grants in specific fiscal quarters. When necessary, we reversed the expenses due to grant cancellations or expirations.
In another backdating assignment, we worked with an insurance company to revise the prices of options and developed two separate databases to track those revisions. The databases allowed the company to keep separate records to expense options, while maintaining all original data until existing stock options expired or were exercised.