(After bankruptcy, companies often teeter between encore and final curtain call; read our June article "Second Acts.")

Restate with One Hand, Price an IPO with the Other
Monday was a busy time for Provident Service Corp., which provides counseling and foster-care staff for government social services, The company priced 4.3 million shares for $12 each, close to the range forecast last week when it delayed the anticipated filing, citing regulatory issues with the Securities and Exchange Commission, according to Dow Jones.

That same day, Provident informed the SEC in a filing that it booked revenue of $32.8 million last year, down from the previously stated $33.5 million. It also lowered its reported 2002 operating expenses to $31.2 million, down from $31.4 million, and its reported operating expenses for the first six months of this year to $24.9 million, down from $25.1 million.

Provident did not explain the cause of the adjustments, but since they apparently have little impact on the bottom line, the restatement may create little or no static.

Is It ''Feed a Worm, Starve a Virus''?
On July 31 the Department of Homeland Security issued its most dire pronouncement yet on the subject of computer viruses, warning that several major attempts to exploit a flaw in recent Windows releases "are now in widespread distribution on the Internet."

"We're seeing an Internet-wide increase in probing that could be a search for vulnerable computers," said David Wray, a department spokesman quoted by news services at the time. "It bears continued watching," he added; it "could lead to the distribution of destructive malicious code and it could cause considerable disruption."

The past week has seen at least four major Internet attacks. The latest, according to a Reuters article, is the Sobig.F worm (the etymology is anyone's guess), which attempts to download files from the Internet and leave computers vulnerable to further attacks. The worm arrives in email, introduced by a variety of subject lines, including ''Your details,'' ''Thank you!,'' ''Your application,'' and ''Wicked screensaver.'' It was spreading rapidly around the world as of Tuesday, according to experts cited in the article.

The worm is programmed to stop spreading on September 10 (whether that date can be trusted is also anyone's guess).

Short Takes

• The Labor Department has issued a rare exemption to federal pension rules, allowing Northwest Airlines Corp. to use the stock of a regional airline subsidiary to help cover the $1 billion shortfall in its employee pension plans. The action, approved by the department's Employee Benefits Security Administration, allows Northwest to contribute up to 100 percent of the stock of Pinnacle Airlines, based in Memphis, to its three plans to fund a $223 million pension obligation for 2002.
  
  

• The SEC has struck a deal with Sherry L. Gibson, an executive vice president for National Century Financial Enterprises (NCFE), settling charges in a suit brought against her for allegedly participating in a scheme that caused investor losses exceeding $1 billion. According to the commission, the private company collapsed suddenly in October 2002 after it was discovered that NCFE and its subsidiaries had been hiding massive amounts of cash and collateral shortfalls from both investors and auditors.
  
  

The complaint alleged that two wholly-owned subsidiaries of NCFE purchased medical accounts receivable from health-care providers and issued notes that securitized those receivables. Between 1999 and 2002, the subsidiaries offered and sold at least $3.25 billion in total notes through private placements to institutional investors. The complaint also charges that Gibson and other senior NCFE officials improperly "advanced" to health-care providers $1 billion or more of the capital raised from investors without receiving required medical accounts receivable in return.

Gibson consented to a permanent injunction barring her from ever again serving as an officer and director of a public company and faces fines to be determined later.

• Keven Leigh Lawrence, 37, pleaded guilty this week to 64 counts of securities fraud and mail fraud. According to the SEC, Lawrence admitted that over the course of about seven years he intentionally defrauded thousands of investors out of approximately $100 million through conspiracy and a scheme to defraud.
  
  

Lawrence's misdeeds involved false representations and failures to disclose accurate information in connection with the sale of the securities of Znetix Inc., Health Maintenance Centers Inc., Cascade Pointe LLC, and affiliated entities. He spent more than $14 million of the proceeds on homes, cars, boats, merchandise, and travel for himself and his co-conspirators. Lawrence, who agreed to forfeiture of his assets, will be sentenced on October 31; the prosecution has recommended that he serve 20 years.

• « previous
• 1
• 2