VideoAs we reported back in June, Duke and El Paso said the SEC had requested information about deals associated with the controversial "round trip" practice. Also called "wash trades," these deals involve buying and selling power or natural gas at the same price with the same counterparty.
Duke management said these transactions contributed about $1 billion to the company's revenues over three years, less than 1 percent of trading revenues. In a statement Friday, Duke said it is fully cooperating with these investigations, as it has with other government organizations inquiring into the same issues.
- Qwest Communications International Inc.'s new chairman and chief executive Richard Notebaert is said to be mulling restating the company's 2001 financial results. The restatement would wipe out more than $1 billion in revenue, according to The Wall Street Journal, citing people familiar with the matter.
- Circuit City Stores Inc. admitted an SEC review was responsible for the company's decision earlier this month to postpone the spinoff of its CarMax Group auto-retail business, according to The Journal. However, the company insisted the delay was not due to serious questions about its accounting.
The SEC is conducting a "normal review," Dandy Barrett, CarMax's director of investor relations, told the paper. "It's just taking a little longer than we expected."
Ranking M&A Law Firms
It's no secret this is tough time to pull off a merger or acquisitions. In fact, worldwide deals plunged 35 percent (to $528 billion) in the first half of this year, according to Bloomberg.
No surprise, then, that the law firms advising deals saw their business slump as well.
Against this bleak backdrop, which law firms were able to scare up the most business?
Three of the top four law firms were London-based. European giant Linklaters, itself a beneficiary of mergers, worked on 90 announced acquisitions worth $83.2 billion during the first six months, including five of the six largest acquisitions this year.
New York City-based Skadden, Arps, Slate, Meagher & Flom LLP, finished third, advising on 69 deals valued at $46.2 billion. For example, it is advising TRW Inc. on its sale to Northrop Grumman Corp. for $12.9 billion, the second largest deal so far this year.
New York City-based Wachtell, Lipton, Rosen & Katz, last year's top M&A advisory firm, finished fifth.
Here are the top 10 merger law firms for the first half of 2002 and the deal value in billions of dollars:
Linklaters $83.3
Freshfields $46.8 6
Skadden, Arps $46.3
Allen & Overy $33.5
Wachtell, Lipton $32
Shearman & Sterling $32
Ashurst Morris $26.3
Clifford Chance $25.8
Weil, Gotshal $23.3
CMS Cameron McKenna $23.1
Insurance CFOs Plan Changes
More than half of CFOs working at life insurance companies are planning changes to internal business practices, such as their approach to risk management and financial reporting, according to a recent Tillinghast-Towers Perrin survey.
About 40 percent of life insurance company CFOs reported having experienced greater scrutiny of their financial reporting practices, risk management practices and investment portfolios, and a change in their relationship with their audit firms, according to the survey.
And, 56 percent of respondents plan changes to internal business practices and 37 percent have changed or are planning to change their use of audit firm services.
Of the companies considering changing their use of audit firm services, 82 percent have already discontinued or scaled back the use of their audit firm for non-audit consulting services.
"The survey demonstrates that companies acknowledge the urgent need for improved disclosures externally as well as changes to key internal business practices," notes Jack Gibson, the life insurance and financial services sector leader for Tillinghast-Towers Perrin in North America. "Yet there are substantial differences in the manner in which companies are making changes. Ultimately, wise company managers will pay close attention to the needs of the investment community and rating agencies."
(Editor's note: To see which industry sectors are the toughest on CFOs, read "Tough Jobs, 2002, a CFO.com exclusive.)
Short Takes
- Credit Suisse First Boston USA Inc. Friday issued $1 billion of 30-year bonds. The long-term notes were priced to yield 7.204 percent, or 185 basis points over comparable Treasurys, and were rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
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