A Red Face for the Red Baron

Financial Corporation of America stumbles

Charles Knapp, chairman of California's huge Financial Corporation of America (assets: $32.7 billion), was sporting a new tan from a sailing vacation in the Caribbean last week, but what he had to say at a hastily called Los Angeles press conference contrasted sharply with his relaxed appearance. Under pressure from the Securities and Exchange Commission, Knapp explained, F.C.A. was adjusting its earnings report to show a second-quarter loss of $107.5 million instead of the $31.1 million profit announced earlier. The dispute with the SEC was a technical argument concerning the manner in which the company reported sales...

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