Stanford sentenced 110 years in jail

A federal court in Houston has sentenced R. Allen Stanford, Former jet-setting Texas tycoon, to 110 years in prison for his involvement in a $7 billion Ponzi scheme, according to reports on Thursday.

Federal prosecutors had asked the court to sentence Stanford to 230 years. Stanford, the former principal of Standford Financial Group, was convicted of fraud in March.

Facebook shares fell below $30 for first time

Facebook Inc. continued its post-debut plunge, but semiconductor
stocks kept the tech sector afloat in Tuesday trades.

Facebook was down another 8%, falling to $29.44, more than 20% off its
initial public offering price.

Facebook Raises $16 Billion at IPO Price $38

Facebook Inc. set its final price at $38 a share, as the social network gets ready for its initial public offering on Friday. At $38 a share, Facebook is valued at $104 billion, the biggest-ever valuation by an American company at the time of its offering.

Facebook is set to raise $16 billion from its IPO, becoming third-largest public offering in the history of the United States, behind General Motors and Visa.

On Friday, Mark Zuckerberg, the founder, is set to ring the opening bell for the Nasdaq from Facebook’s headquarters in Menlo Park, Calif., surrounded by executives, engineers and other employees. Shares of Facebook, which will trade under the ticker FB, will start selling to the public later in the morning. Read more “Facebook Raises $16 Billion at IPO Price $38”

Moody's lowered ratings of 16 Spanish banks

Moody's Investors Service on Thursday lowered ratings of 16 Spanish banks and Banco Santander's U.K.-based subsidiary by one to three notches.

Moody's cited unfavorable operating conditions on renewed recession, reduced creditworthiness of the Spanish sovereign, and rapid deterioration in asset quality for the downgrades.

The outlooks on ten of the banks are negative while ratings of seven other banks remain on review for further downgrade. Some of the affected banks include Banco Santander SA, Banco Espanol de Credito, Banco Bilbao Vizcaya Argentaria SA, Caixabank, and Ceca.

Criminal probe into $2B trading loss at JPMorgan

The Justice Department has initiated a criminal probe into the JPMorgan Chase’ $2 billion trading loss revealed last Thursday, according to a law enforcement source familiar with the situation.

The news came as Jamie Dimon, the embattled chief executive of JPMorgan Chase, faced questions from shareholders Tuesday.

Standard & Poor's and Fitch Ratings last Friday downgraded J.P. Morgan Chase rating because of the $2 billion loss on derivatives

Dow at highest level since late 2007

U.S. stocks rose Tuesday, propelling the Dow Jones Industrial Average
to its highest close since late 2007, after a report indicated U.S.
manufacturing expanded in April, offsetting concern about the economic
recovery.

The Dow Jones Industrial Average DJIA rose 65.69 points, or 0.5%, to 13,279.32.

The S&P 500 SPX added 7.91 points, or 0.6%, to 1,405.82.

The Nasdaq Composite COMP gained 4.08 points, or 0.1%, to 3,050.44

Different Ways Index Funds Are Weighted

You invest in index funds, but do you know that different index funds are weighted in a different way? Whatever type of index fund or funds you choose, make sure you understand the methodology, so you can stay away from an investment that doesn't behave the way you expected.

Although index funds seem to track anything and everything, there are a few primary ways of constructing them, from conventional market-cap weighting to alternative methods such as equal, fundamental, or price weighting. (read full article "How Index Funds Are Weighted" on SmartInMoney.com)

Cap-Weighted Indexing
By far the most common method of indexing is through market-cap weighting, in which the amount of each stock held is proportionate to its market value, or capitalization. So if a stock's market cap makes up 6% of an index, it also makes up 6% of the fund's portfolio.

Equal-Weighted Indexing
All stocks are held in equal proportion regardless of market cap. So, for example, an equal-weighted S&P 500 fund would still include the same 500 stocks as the cap-weighted version, but in equal amounts--in this case each making up 0.2% of the index.

Fundamental Indexing
Stocks are weighted based on a fundamental metric or metrics, such as dividend yield, earnings, book value, or a combination of factors.

Price-Weighted Indexing
Stocks are weighted by the share price for each company in the index, with the Dow Jones Industrial Average the most famous example.

Google Stock Split Cement Founders Control

Google announced that it would split its stock between voting and
non-voting shares. The new shares, which will be listed on the NASDAQ
exchange, will allow the search-engine company's founders, Larry Page
and Sergey Brin, along with the chairman, Eric Schmidt, to maintain a
controlling stake. A bet on Google is now a bet that its bosses will
stay sharp indefinitely.

Case-Shiller Index: Home prices lowest in nine years

U.S. home prices fell for the fifth month in a row in January to the
lowest level since early 2003, according to the S&P/Case-Shiller
20-city composite index.

The closely followed index dropped 0.8% in the first month of 2012.
The three-month rolling index includes transactions that took place
from November to January.

Over the past 12 months, prices have fallen 3.8% even though the U.S.
economy has shown increasing signs of recovery. Sixteen of the 20
metropolitan areas posted declines, while only Miami, Phoenix and
Washington, D.C., saw increases.

The federal government's index for home prices was unchanged in
January, but more recent data suggest prices might be stabilizing.

The large number of foreclosed homes, combined with a high
unemployment rate, has depressed the home market since a real-estate
bubble burst in 2007. Many Americans, especially younger people, lack
the financial means to buy a home despite ultra-low mortgage rates.

S&P 500 broke 1,400 since June 2008

The S&P 500 index is up 8 points, or 0.5%, at 1402, its first push
above 1400 since June 5, 2008. The S&P 500 is now up 11% this year.

Pushing through the milestone comes after the Dow surpassed 13000 and
the Nasdaq Comp advanced above 3000 for the first time in more than 11
years.

Firmer readings on the labor market and manufacturing activity have
set the stage for today's gains.

Not surprisingly, financials are leading the charge higher. Financials
are the S&P 500′s best-performing sector this year, up more than 20%.
Tech is a close second, up about 20%, while consumer discretionary
stocks are up 14% and industrials have advanced 12%.

Nasdaq at 11-year high

Nasdaq closes above 3,000 for first time since 2000.

U.S. economy is picking up steam and the stocks blasted higher
Tuesday, March 13, pushing the Nasdaq Composite to close above 3,000
for the first time in 11 years, after J.P. Morgan Chase & Co. hiked
its dividend, retail sales climbed and the Federal Reserve held rates
at record lows.

The Dow Jones Industrial Average rose 217.97 points, or 1.7%, to 13,177.68.

The S&P 500 Index climbed 24.87 points, or 1.8%, to 1,395.96.

The Nasdaq Composite rose 56.22 points to 3,039.88, its highest level
since Nov. 15, 2000

Fear gauge index fells to near 5-year low

The CBOE Market Volatility Index VIX fell sharply on Tuesday to near a
5-year low on intraday basis as the Dow Jones Industrial Average and
the S&P 500 both successfully breached key levels.

The so-called fear gauge at one point slipped to a low of 13.99. The
last time the index moved below 14 during trading was in June 2007
when the Dow was trading above 13,400 and the S&P 500 was above 1500.

The Dow then peaked a few months later to hit a record high close of
14,164.53 on Oct. 9, 2007 before beginning its multi-year decline. The
blue chip index is currently trading above 13,000 while the S&P 500 is
around 1380.0.

Greece's 'credit event' triggers $3.2 billion payouts

The International Swaps and Derivatives Association (ISDA) said Friday
that the Greek government's use of collective-action clauses, or CACs,
to amend to terms of Greece-issued bonds qualifies as a "credit event"
for Greece. A credit event requires a payout to those who held credit
default swaps (CDS) as insurance to protect themselves in the event of
a Greek default.

The ISDA decision could trigger payouts on $3.2 billion of those
insurance-like contracts, according to Dow Jones Newswires. The news
comes after the Greek government announced that 83.5% of its
private-sector bondholders agreed to a bond-swap deal. That rate fell
short of the 90% needed to prevent legal force to get the rest of the
private bondholders to participate, so Greece's finance ministry said
it got approval for CACs, which would bring the total participation
rate to 96% by forcing some bondholders on board.

Stanford guilty of masterminding Ponzi scheme

A federal jury on Tuesday found Allen Stanford guilty of masterminding a $7.1 billion Ponzi scheme, according to smartinmoney.com.

Mr. Stanford has been jailed since June 2009 because he was judged to be a flight risk. He complained of memory loss from the head trauma caused by inmates’ beatings, and a court found that he was so addicted to his prescribed painkillers that he wasn't competent to stand trial. In December 2011, a judge found him competent and the trial commenced in January.

The jury convicted Mr. Stanford on 13 of the 14 charges brought by prosecutors, including conspiracy to commit money laundering, fraud and obstructing investigators. He faces a maximum of 230 years in prison. Mr. Stanford's attorneys told reporters they would appeal but didn't specify on what grounds. Prosecutors declined to comment.

At the peak of his career, he owned banks and residences around the world, had high-placed contacts with the leaders of Libya and other nations, and was a particularly outsize presence in the Caribbean isle of Antigua, where he was knighted in 2006. Mr. Stanford valued other kinds of possessions, too, including a 120-foot yacht and a fleet of aircraft valued at more than $100 million.

In 2008, Mr. Stanford was the 205th richest American with a net worth of $2.2 billion, according to Forbes magazine. His holdings in Antigua, where he held a dual citizenship, included banks, airlines and the country's biggest newspaper. A cricket enthusiast, he rose to international prominence as a benefactor of the sport.

In 2009, the U.S. government accused Mr. Stanford of swindling nearly 30,000 of investors in 113 countries for more than two decades by selling them certificates of deposit issued by the Stanford International Bank he controlled in the Caribbean island of Antigua, representing to clients that the money would be invested conservatively in stocks and bonds. Instead, he funneled the proceeds into risky real-estate assets and his own businesses, a luxurious lifestyle, a secret Swiss bank account and business deals that consistently lost money.

For the prosecution, the Stanford case was a Ponzi scheme in which he and five conspirators had given investors false financial statements indicating that the certificates of deposit were invested in conservative assets when $2 billion was actually lent to Mr. Stanford. (Read full article “Stanford Convicted in $7.1 Billion Ponzi Scheme” on smartinmoney.com)

ISDA: No 'credit event' occurred on Greece's CDS

The International Swaps and Derivatives Association (ISDA) on Thursday
said its EMEA Determinations Committee unanimously ruled that no
"credit event" has yet occurred amid Greece's efforts to restructure
its debt holdings.

A declaration of a "credit event" would require a payout on credit
default swaps (CDS) held as insurance against nonpayment.

The panel ruled unanimously that a move effectively insulating the
European Central Bank and national central banks from being forced to
participate in the restructuring in the event that collective-action
clauses are triggered didn't constitute a credit event. They also
determined they hadn't received evidence that the restructuring itself
met the definition of a credit event.

The panel said, however that the situation is still eveloving and that
market participants could submit further questions to the body "as
further facts come to light.

Dow closes above 13,000 since May 2008

U.S. stocks gained Tuesday after an index showed consumer confidence
at a 12-month high and oil prices slid, helping boost the Dow Jones
Industrial Average (DJI) to its first close above 13,000 since May
2008.

The Dow average rose 23.61 points, or 0.2%, to 13,005.12. The S&P 500
gained 4.59 points, or 0.3%, to 1,372.18, its fourth straight session
of gains.

The Nasdaq Composite added 20.60 points, or 0.7%, to 2,986.76, also
its fourth day of gains.

S&P Announced Greece in Default

Standard & Poor's ratings agency downgraded Greece's long-term credit rating to selective default from double-C. It is a result of a debt write-down deal with private creditors that is an integral part of the second bailout. S&P had said this month that it would consider Greece in default if it added "collective-action" clauses to its sovereign debt, effectively forcing all bondholders to accept a bond-swap offering.

Greece became the first Euro-zone member officially to be rated in default, 13 years after the single European currency was adopted to strengthen the European Union.

Credit Default Swap: Powerful force in Greek debt crisis

A Credit default swap (CDS) has become one of the most powerful forces in the crisis faced by Greece and other members of the euro zone recently. European policy makers have looked cautiously at credit-default swaps, while they structured the Greek rescue over the last six months, according Smartinmoney.com. They aimed for a voluntary debt exchange that would not trigger the credit event, fearing that payments on the swaps might set off destabilizing chain reactions through Europe’s financial system.

Credit default swaps were invented by Wall Street in the late 1990s as a form of insurance contract against the default of one or more borrowers. Between 2000 and 2008, the market for such swaps ballooned from $900 billion to more than $30 trillion. In sharp contrast to traditional insurance, swaps are totally unregulated. CDSs are not traded on an exchange and there is no required reporting of transactions to a government agency. During the 2007-2010 financial crisis the lack of transparency became a concern to regulators. They played a pivotal role in the global financial meltdown.

Credit default swaps are a type of credit insurance contract in which one party protect another party from the risk of default on a particular debt instrument. The purchaser of the swap pays an annual premium (like an insurance premium) for protection from the credit risk. Just as house insurance will cost more for those living next to a fireworks factory, a CDS becomes more expensive when the finances of the bond issuer deteriorate, such as in the Greek debt crisis.

If the underlying debt instrument defaults, the CDS insurer compensates the insured for his loss. As with any insurance contract, there is scope for dispute about when a claim can be made on a default. Under a sovereign CDS, a claim depends on a “credit event”, which is defined broadly as a failure to pay interest, a moratorium on principal repayments or a restructuring of the debt.

Would a re-profiling of Greek debts qualify? It depends how it was done. If investors agree to such a deal of their own free will, as happened for Uruguay in 2003, it would not constitute a credit event. Nor would one occur if European banks succumbed to some arm-twisting by their own governments to agree to a swap. But a credit event probably would occur if all bondholders were forced into the switch. Should there be a dispute in the CDS market over a Greek re-profiling, it would be resolved by the International Swap Dealers Association (ISDA), a voluntary body which governs the market. Under ISDA rules, each region has a “determinations committee”, comprising ten bankers and five investors, which rules on such issues. Read “Credit Default Swap: Powerful force infinancial crisis” on Smartinmoney.com

Government and banks reached record housing settlement of more than $26 billion

State and federal government officials on Thursday announced a record housing settlement of more than $26 billion with five of the country's biggest banks over foreclosure abuses after more than a year of negotiations. The deal is expected to help more than one million U.S. homeowners.

For more than a year state attorneys-general and federal officials have been in discussions with banks over the robo-signing crisis - the practice of assigning bank employees to rapidly approve numerous foreclosures with only cursory glances at the glut of paperwork to determine if all the documents are in order. In the end, 49 states participated in the settlement, including California and New York which had previously held out for a better deal.

The settlement is with five big banks: Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc., the company formerly known as GMAC.

Of the $26 billion in the deal with the five banks, $17 billion must be spent by the banks to assist struggling homeowners. Of that amount, 60% must be employed to reduce the amount owed by troubled borrowers, known as principal reduction. The amount must be spent within three years, or banks will need to make cash payments to regulators.

Dow’s best closing level since 2008

When one of the most closely watched jobs market reports showed a generally strong picture of the United States economy on Friday, stocks on Wall Street picked right up and surged throughout the day, extending the strong start to 2012 and sending the Dow to its best closing level since 2008.

The government's monthly snapshot of the jobs market showed some acceleration in the United States economy in January. Aside from the performance of the Dow, the markets responded with milestones of other
sorts, with the broader market as measured by the Standard & Poor's 500-stock index pushing ahead by 6.94 percent for the year to date, its best such showing since the 13.97 percent gain in the similar period in 1987.

In addition, the Nasdaq composite index turned in its best close since December 2000, when the boom in Internet stocks was turning to bust.

On Friday, the S.& P. was up 1.46 percent, or 19.36 points, at 1,344.90, and the Dow Jones industrial average rose 1.23 percent, or 156.82 points, to 12,862.23, its best close since May 19, 2008, before the financial crisis. The Nasdaq surged by 1.61 percent, or 45.98 points, to 2,905.66, its highest close since Dec. 12, 2000.

The gains extended what has been one of the best starts to a year in decades. The three major indexes each ended January higher, with the broader market as measured by the S.& P. up more than 4 percent, its biggest January gain since 1997.

The jobs report was the latest in a series of economic reports that have given the United States equities market cause for optimism and provided an important counterpoint to the sovereign debt crisis in the euro zone.

In addition, the Commerce Department said factory orders rose 1.1 percent in December, although that was below forecasts of 1.5 percent and compared with the upwardly revised 2.2 percent jump in November.

Another report, from the Institute for Supply Management, showed that economic activity in the nonmanufacturing sector grew in January for the 25th consecutive month.

Facebook Exceeds Google in Internet Company IPO

Facebook Inc.'s $5 billion initial public offering would make it the biggest U.S. Internet IPO in history, surpassing the debut of its arch-rival Google Inc.

The social networking giant Facebook filed its much-anticipated IPO filing late Wednesday, setting the stage for what's expected to be the biggest public trading debut for an Internet company since 2004 when Google went public in a $1.7 billion offering.

The Facebook's IPO would also mark a high point in the rapidly growing social networking market, underscored last year by the public trading debuts of such players as LinkedIn (the professional networking site) and (Zynga Inc.) the social gaming company.

The IPO of Facebook also would rank among the top 10 biggest overall in U.S. history of U.S.-based companies. That list is led by Visa Inc., whose 2008 IPO was worth $17.9 billion, followed by General Motors in 2010 at $15.8 billion, AT&T Wireless Group in 2000 at $10.6 billion and Kraft  in 2001 at $8.7 billion, according to S&P Capital IQ.

U.S. economy expanded at a 2.8 percent in the fourth quarter

Gross domestic product expanded at a 2.8 percent annual rate in the fourth quarter, the Commerce Department said on Friday, a sharp acceleration from the 1.8 percent in the prior three months.

Soft underlying demand and a sharp slowing in core inflation supported the Federal Reserve's decision this week to keep in place an ultra easy monetary policy to nurse the recovery.

The economy got a temporary boost from the rebuilding of inventories, which logged the biggest increase since the third quarter of 2010.

Excluding inventories, the economy grew at a tepid 0.8 percent rate, a sharp step-down from the prior period's 3.2 percent pace and a sign of weak domestic demand.

Fed is likely to keep low key interest rate until late 2014

The Federal Reserve says it is unlikely to raise interest rates before late 2014. It means a period of record-low rates would be extended by more than a year. The Fed has kept its key interest rate at a record low near zero for three years.The Fed's decision to keep rates low is to help lift a weak but modestly growing economy.

The new timeframe hints at details in the Fed's quarterly economic forecast, which will be released later. That will show in what year policy members expect the first increase in the Fed's benchmark interest rate.

IMF cuts global economic growth outlook

The International Monetary Fund (IMF) on Tuesday cut its forecast for global economic growth in 2012 and 2013, citing growing financial strains and rising downside risks as Europe's debt crisis entered a "perilous new phase."

The institution said it expects world economic output to grow by 3.3% in 2012, down from 3.8% in 2011 and from a September forecast of 4%. Global output is forecast to expand 3.9% in 2013, down from a previous
forecast of 4.5%.

The IMF expects the 17-nation euro-zone economy to shrink 0.5% in 2012, followed by growth of 0.8% in 2013. The IMF had previously projected growth of 2.1% in 2012 and 1.5% in 2013.

The IMF left its forecast for U.S. economic growth in 2012 unchanged at 1.8%, but pegged 2012 growth at 2.2%, down from an earlier projection of 2.5%.

U.S. Banks' Bad Reports

The worsening investment environment at the end of 2011 took its toll
on the fourth-quarter earnings of America's banks.

JPMorgan Chase and Citigroup did worse than expected, posting declines
in net profit of 23% and 11% respectively, compared with the same
period in 2010.

Goldman Sachs said its net profit was down by 58%.

But Wells Fargo, which has a smaller investment-banking business than
its rivals, saw net income jump by 21%, to $4.1 billion.

30-year mortgage rate fell to record low of 3.88%

The average rate on the 30-year fixed-rate mortgage fell to a record
low of 3.88% in the week ended Jan. 19 from 3.89% in the prior week,
according to Freddie Mac in its weekly report released on Thursday.

A year ago, the 30-year rate was at 4.74%. These data go back to 1971.

To obtain the latest rate, payment of an average 0.8 point was
required, according to Freddie, a buyer of residential mortgages. A
point is 1% of the mortgage amount, charged in prepaid interest.

Meanwhile, the 15-year fixed-rate mortgage ticked higher to 3.17% in
the latest week from a record low of 3.16% in the prior week. These
data go back to 1991.

FBI made arrests for insider trading

The Federal Bureau of Investigation (FBI) on Wednesday arrested Todd
Newman, a former portfolio manager with the Diamondback Capital
Management hedge fund and John Horvath, an employee of Sigma Capital
Management, an affiliate of SAC Capital Advisors, as part of an
insider trading investigation, The Wall Street Journal reported.

The Federal Bureau of Investigation is also expected to arrest Anthony
Chiasson, a former hedge fund manager at Level Global Investors LP,
who was expected to surrender in New York, the newspaper reported.

A fourth person was expected to face charges as well, but the
newspaper article did not provide a name.

China growth is slowing down

China's economy expanded in the fourth quarter at the slowest pace
since the middle of 2009, setting the stage for what could be a
further easing in monetary policy and selective loosening on home
purchase restrictions in some cities, according to analysts.

Gross domestic product between October and December rose 8.9% from the
year-ago quarter, the National Bureau of Statistics reported Tuesday,
with the result beating expectations of 8.6% growth tipped in a Dow
Jones Newswires poll of economists.

When measured against the prior quarter, the data showed a deepening
slowdown, with growth at 8.2%, compared to 9.5% growth in the third
quarter.

S&P to Downgrade France & Austria Credit Rating

Standard & Poor's Ratings Services has notified the French and Austria governments of its decision to downgrade the country's triple-A credit rating one notch to double-A-plus. This move marks the long-awaited blow to France's international standing and knocks the country out of the top financial league of the euro zone. The downgrade further complicates efforts by the euro zone to contain the region's long-running debt crisis.

S&P last month warned that downgrades were possible for 15 euro-zone countries, including triple-A rated France, Germany, Austria and the Netherlands. The Financial Times reported Friday that Germany would escape without a ratings cut.

Still, a downgrade for France would all but ensure that the European Financial Stability Facility, the euro-zone's temporary rescue fund, would also lose its triple-A rating, Lewis and other economists noted.

Treasury Sells 10-Year Notes At Record Low Yield

A new landmark was set Wednesday for U.S. Treasury bond supply. A sale
of $21 billion, 10-year notes were offered at a yield below 2% for the
first time ever.

The auctioned yield, or the rate the U.S. government pays to borrow
cash in capital markets, was 1.9%. That smashed the 2% yield from the
10-year sale in September.

The Treasury received bids totaling $69.04 billion and accepted $21.00
billion. Primary dealers were awarded $9.29 billion, while indirect
bidders--a category that includes foreign central bankers--were
awarded $8.04 billion.

2012 stock markets started strong

Stock markets started the year on a positive note, buoyed by strong
manufacturing data from America, Britain and China. Investors will be
hoping that 2012 proves kinder than last year, when most markets fell.

It was no surprise that the Euro area's benchmark index fared badly in
2011, though the once-hot stock markets of Brazil, Hong Kong, China
and India did even worse. One of the world's best performers, oddly
enough, was Venezuela's main index.

British regulators fine PricewaterhouseCoopers

Britain's regulators said Friday they have fined accounting firm
PricewaterhouseCoopers $2.2 million for turning a blind eye on client
assets at JPMorgan Chase.

The accounting firm failed to inform JPMorgan that more than $8
billion of their clients' funds were mixed up with the bank's own
funds in seven years of reports filed with the Financial Service
Authority, beginning in 2002.

The New York Times reported Friday the fine, imposed by the
Accountancy and Actuarial Discipline Board, was the largest ever meted
out by that regulator.

"The tribunal found that P.W.C. had committed misconduct in respect of
each allegation in the disciplinary complaint before it. The tribunal
found the misconduct in this case to be very serious," the regulator
said in a statement.

However, the disciplinary board also said it had handed out a lower
fine than originally assessed due to the firm's cooperation with the
inquiry.

Why Businesses Need Bookkeeping?

The job of bookkeeping can be very time consuming. With no exceptions, every monetary amount that is paid or received must be recorded. Additionally, accuracy is of the supreme importance, making keeping the books in a quick manner a very bad idea. As business owners are often lacking in time, many choose to hire bookkeepers to keep company records well maintained.

Certainly bookkeeping is necessary and beneficial to business owners. According Pettir.com Proper bookkeeping can help businesses effectively manage cash flow, stay well-informed on company performance, and develop plans for the future. Moreover, accurate bookkeeping is required by both federal and local tax agencies.

A company's books are used to determine the amount of taxes the company must pay. They are also used in preparing tax returns. Sometimes, a tax agency may decide to investigate the information reported on a tax return or other type of tax-related document. In such cases, business owners are required to present accurate records for the tax agency's inspection. In the United States, for example, the Internal Revenue Service requires business owners to keep financial records that are complete and up-to-date. State and city tax agencies may require businesses to maintain accurate records as well. Failure to observe acceptable bookkeeping practices may lead to significant monetary fines, penalties, or in severe cases, imprisonment.