FanPost

Ron Wellman Hires Disgraced Former Krispy Kreme CFO

A recent Ron Wellman hire that puts an exclamation mark on his record of hypocrisy, adds to his embarrassment of Wake Forest University, and deserves ferocious condemnation is that of Randy Casstevens, infamous former CFO of Krispy Kreme Donuts who, along with two other former Krispy Kreme executive officers, illegally managed stock prices at Krispy Kreme by manipulating ('cooking') company accounting books, and cashing in millions of dollars of their own personal shares while the company's stock price was at its peak (SEC Complaint available here --- Law360 piece available here and Corporate Conflicts piece available here --- Yes! Weekly piece disclosing the pre-class action settlement monies which were paid by the defendants to the government --- in a nutshell [full disclosure, this summation comes from the boards] the two accounting issues at Krispy Kreme which were highly suspect had to do with (1) booking revenue on sales to distributors who were then acquired - a clear sham under any circumstance and (2) synthetic leases --- SEC Administrative Sanctions available here).

Afterward, Casstevens and the two others became targets of a five year-long Securities & Exchange Commission (SEC) investigation which determined that Casstevens had committed multiple accounting law violations under the Securities and Exchange Act of 1933 and forced him to surrender his federal SEC practice license (he retains his North Carolina CPA license). According to the Winston-Salem Journal, Casstevens has refused its own request for an interview following the SEC's determination, and to this date, he has never apologized publicly for his actions. While Casstevens's original entrance to Wake Forest University following the Krispy Kreme scandal began with a 2004-2008 stint as a career counselor, his entrance to a leadership position at Wake Forest began with his hiring by Ron Wellman at the Wake Forest Athletics Department.

Even in a world of flat-out denial, Ron Wellman's put a former CFO of a local company that financially misled and injured investors on the Wake Forest Athletics Department payroll, and hired the same man, who's had a major recent run-in with the SEC and had his SEC accounting license revoked, into a position of financial leadership where he represents Wake Forest University. Obviously, this is questionable behavior coming from an administration that's been all too eager to strategically exploit any instance of youthful transgression common to all major college basketball programs and throw former coaches and players under the bus in order to misdirect attention and repudiate taking responsibility for Jeff Bzdelik's failure as head coach of the men's basketball program.

Such a hire would be tremendously embarrassing if it became widely noticed, right? I mean, what with an Athletic Director who we've come to know loves to fall back on a hollow "culture" meme harder than a drunk Tiger Woods on the MET's stairs, it would look pretty bad if this became widely publicized. What would any of us do in Ron Wellman's position at this point? The first thing that comes to my mind is to under-publicize and understate such a hire - and that's exactly what we've got a case of.

This hire was so predictably under-publicized and understated such that (1) the only official announcement of Casstevens's hiring into the Wake Forest Athletics Department was a below-the-radar "Coming and Going" release of incoming and departing Wake Forest administrative staff (available here, dated May 20, 2012), (2) the only other announcement of his presence in the Wake Forest Athletics Department was a similarly understated "Staff Milestone" release quietly commemorating various employees' tenure at Wake Forest (available here, commemorating Casstevens's completion of one year at Wake Forest), and (3) the Wake Forest Athletics Department's official biosketch of Casstevens remains completely empty as of June 7, 2013 (available here).

However, Randy Casstevens is a "Double Deac", was a member of the Calloway School Board of Visitors (current membership list here) until 2005 (link to cite here - see page 268), and while it's pure speculation, it's not improbable that he's been a big donor, perhaps even Moricle Society-level.

It follows that Ron Wellman hired this man to both represent Wake Forest University and to manage its finances. How could the administration at Wake possibly justify hiring this guy to represent Wake Forest, and giving him the keys to the cherished trust of Wake Forest alumni and fan donations? This is a Wake Forest Athletics Department supposedly based on integrity and honesty. Under Ron Wellman (Bowling Green, 1970 [P.E. Degree]), ethics in the Wake Forest Athletics Department have transmogrified into expedient tactical agents of Ron Wellman's derelict leadership and Jeff Bzdelik's atrocious head coaching and recruiting.

We've become accustomed to Ron Wellman's eye-raising hypocrisy for some time now. At this point we're seeing it with eyes wide-open and unclouded, with jaws dropped.

Your fun fact following this story - I'm personally unsure whether to laugh or cry - is that Randy Casstevens spoke at the Calloway School on November 14, 2002 (a few short years before the Krispy Kreme scandal), on the topic of corporate responsibility, honest reporting, and shareholder values (cite here - see page 6 --- the selection follows):

Recipe for Corporate Responsibility

Randy S. Casstevens, Chief Financial Officer (CFO) of Krispy Kreme, spoke about his company's plan for corporate responsibility at a Nov. 14 lecture at the Calloway School of Business and Accountancy. Casstevens' talk, "Krispy Kreme's Recipe for Corporate Responsibility," addressed the company's approach to corporate governance and shareholder values in a post-Enron business environment. Casstevens was featured on the cover of CFO Magazine in August 2002 and in its cover story about restoring investor trust. "Because of Enron, companies are really held to a higher standard in terms of what they’re reporting,” Casstevens said in the article. “We want to do whatever we can to increase public confidence in us.” Casstevens is a 1987 graduate of the Calloway School and a 1995 graduate of the Wake Forest Babcock Graduate School of Management. He is also a member of the Calloway School Board of Visitors. The lecture was part of the Calloway School’s Joseph A. Jones Finance Lecture Series, established through a gift from Jones, a 1961 graduate of the Calloway School.

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