The paper, citing company records, said the payments were provided from March 3 to March 21 to pay for lawyers for 10 of the 15 former executives who have pleaded guilty.
SEC Chief in Boston Resigns
Portfolio managers and brokers are not the only ones who have lost their jobs due to the widening probe of mutual funds.
Juan M. Marcelino, who headed up the Boston office of the Securities and Exchange Commission for more than 10 years, resigned on Monday after reports that his office had received information about improper trading at Putnam Investments but failed to take action, according to The Boston Globe.
Over the weekend, Putnam chief executive Lawrence J. Lasser quit as his company faced state and federal fraud charges.
On October 24, the Globe reported that the SEC had information about alleged improper trading activities at Putnam as long ago as March from a whistle-blower who had spent two-and-a-half years at the mutual fund company. The whistle-blower, Peter Scannell, provided documents showing a pattern of market timing by some of Putnam's customers, the paper noted.
Phil Koski, the SEC attorney who spent an hour with Scannell, promised to follow up with the former Putnam employee but never did, according to the Globe.
On September 11, Scannell took his documents to the Massachusetts Securities Division. Led by Secretary of State William F. Galvin, the office issued subpoenas within hours seeking information from Putnam, the paper said.
An SEC statement said that "Mr. Marcelino indicated that he had decided to step aside as the district administrator, given the recent press coverage of certain matters involving the Boston office, to minimize any further distractions for his staff as they continue the critical work of the office." Marcelino had no comment for the Globe other than to acknowledge his resignation.
Marcelino had headed the Boston office since 1993 after 10 years as a staff attorney in the SEC's Division of Enforcement in Washington.
Deloitte Departs as Auditor of Energy Conversion Devices
Fuel-cell manufacturer Energy Conversion Devices Inc. said its independent auditors, Deloitte & Touche LLP, declined to stand for reelection as ECD's independent auditors.
The company announced on October 30 that it received a letter from Deloitte confirming that the "client-auditor relationship between Energy Conversion Devices Inc. and Deloitte & Touche LLP has ceased."
In a press release, ECD stated that in connection with the audits of the company's two most recent fiscal years and for the period July 1 through October 30, 2003, there were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Such disagreements, added ECD, if they were not resolved to the satisfaction of Deloitte, would have cited by the auditing firm on ECD's consolidated financial statements.
ECD added it has had a close working relationship with Deloitte and its predecessor firms since they began their engagement in 1968 as ECD's independent auditors. Severing the relationship was not recommended or approved by ECD's board or its audit committee said the company, which has begun the search for an new independent auditor.
On September 29, Energy Conversion said it would delay the release of its annual report, and that its auditors might question whether the company could continue as a going concern if it is unable to raise the required funding.
Short Takes
- Tyco International Ltd. took a $1.2 billion charge to eliminate 7,200 jobs, exit more than 50 business lines, and sell its undersea fiber-optic cable network.
- Masco Corp. named two new directors. One is J. Michael Losh, formerly executive vice president and chief financial officer of General Motors from July 1994 through August 2000. He also served as chairman of GMAC, GM's financial services group, from July 1994 until April 1999.
The other new director is Prof. David L. Johnston, who has served as president and vice chancellor of the University of Waterloo in Ontario, Canada, since July 1, 1999. Johnston is a specialist in securities regulation, corporation law, and information technology law, according to the company.
- Berkshire Hathaway Inc. said its board voted to increase the number of directors to 11 from 9. The new members are David Gottesman, a co-managing partner of investment advisory firm First Manhattan Co., and Charlotte Guyman, a former Microsoft Corp. employee currently on the board of the University of Washington Medical School.
- Specialty retailer Claire's Stores Inc. said its board declared a two-for-one split. It also said its dividend would remain at its current per-share level rather than being adjusted downward to reflect the stock split, effectively doubling the dividend payout.
- Max Re Capital Ltd. said it will increase its quarterly dividend payment to 3 cents a share from 2 cents.
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