Hidden in Plain Sight

The Securities and Exchange Commission doesn’t like lease accounting, and it’s not going to take it any more. In a June report on off-balance-sheet activity commissioned by Congress as part of the Sarbanes-Oxley Act of 2002, SEC staff argued that lease-accounting standards should be rewritten, es...

By Tim Reason • Aug. 1, 2005

Senate Panel OKs Fannie, Freddie Bill

The Senate Banking Committee approved a bill to tighten regulatory controls of Fannie Mae and Freddie Mac that is expected to be voted on by the entire chamber as early as September, according to Dow Jones Newswires.While it’s favored by the Bush Administration, the bill reportedly contains eleme...

By Craig Schneider • July 29, 2005

Senate Banking Committee Endorses Cox

The Senate Banking Committee voted unanimously Thursday to recommend Senate confirmation of Republican nominee Christopher Cox as the head of the Securities and Exchange Commission, according to Dow Jones Newswires.The committee also reportedly voted to endorse nominees SEC commissioner Roel Camp...

By Craig Schneider • July 28, 2005

CFO Sullivan Praised for Ebbers Takedown

Former WorldCom CFO Scott Sullivan is likely to get considerably less jail time than the maximum 25 years because prosecutors credit him with the conviction of WorldCom founder Bernard Ebbers, The Wall Street Journal reported.Sullivan, who pleaded guilty to fraud, conspiracy, and making false fin...

By Craig Schneider • July 28, 2005

Your Escheating Heart

Earlier this year, executives at Old Republic Title Company had reason to realize the importance of passing unclaimed property on to its rightful owners. Years ago, an Old Republic agency subsidiary had failed to let $9.5 million of unclaimed escrow funds revert to California, as required under s...

By Helen Shaw • July 28, 2005

Ex-CFO of WorldCom to Forfeit Estate

Scott Sullivan, the former chief financial officer of WorldCom Inc., has agreed to forfeit his Boca Raton estate and his retirement fund to settle a class-action lawsuit for his role in the company’s $11 billion accounting fraud, according to press reports.Rather than try to claim an exemption un...

By Craig Schneider • July 27, 2005

DaimlerChrysler Hotline in Hot Water

The Securities and Exchange Commission is investigating allegations made by the former administrator of DaimlerChrysler AG’s confidential employee hotline, according to The Wall Street Journal. Christine Holtzman reportedly claimed in her suit in U.S. District Court that she was wrongfully fired ...

By Craig Schneider • July 27, 2005

Cox Pledges Support for Options Rule

Rep. Christopher Cox, nominated for the chairmanship of the Securities and Exchange Commission, reportedly issued strong support on Tuesday for a new accounting rule requiring companies to treat options as an expense, despite his co-sponsorship of a bill last year that tried to limit the practice...

By Craig Schneider • July 26, 2005

Wells Notices for RenaissanceRe Execs

RenaissanceRe Holdings announced that two executives have received a Wells notice from the Securities and Exchange Commission, indicating that the regulator could bring a civil enforcement action against them for possible securities laws violations.The notices were issued to chairman and chief ex...

By Craig Schneider • July 25, 2005

Campos, Nazareth Nominated to SEC Posts

President Bush has formally nominated Roel C. Campos to serve an additional term as a member of the Securities and Exchange Commission and Annette L. Nazareth to fill one of the vacant posts, according to an announcement from the White House.Campos’ term will expire on June 5, 2010.Nazareth, curr...

By Stephen Taub • July 22, 2005

Former Netopia CFO Receives Wells Notice

A former chief financial officer and a former senior sales vice president of sales for Netopia Inc. have each received a Wells notice from the Securities and Exchange Commission, indicating that the regulator could bring a civil enforcement action against them for possible securities laws violati...

By Stephen Taub • July 22, 2005

No Convictions for Enron Broadband Execs

Five former executives of Enron Broadband Services can take a deep breath.Three of the individuals who worked at the unit of Enron Corp. have been acquitted by a federal jury on several charges, according to published reports. The jury deadlocked on the remaining counts, as well as on all charges...

By Dave Cook and Stephen Taub • July 21, 2005

How Markets Punish Material Weaknesses

Section 404 of the Sarbanes-Oxley Act requires companies to disclose internal-control deficiencies in their annual reports. The effects on share prices are examined in “Control Deficiencies: Finding Financial Impurities,” a new analysis of 2004 and early 2005 disclosures by shareholder-advisory f...

By Marie Leone • July 21, 2005

Berkowitz to Head Enron Task Force

The Enron Task Force has named Sean Berkowitz as its third director since its formation in January 2002.Berkowitz, who signed on with Department of Justice team in December 2003, replaces Andrew Weissmann, who joined the task force at its inception as assistant director to Leslie Caldwell. Weissm...

By Stephen Taub • July 19, 2005

Insurance Probes Now Too Independent?

New York Attorney General Eliot Spitzer and federal officials are no longer cooperating and are now pursuing their own, separate investigations of the insurance industry, reported the Washington Post.As recently as late May, the two prosecution teams had been conducting joint interviews, accordin...

By Stephen Taub • July 19, 2005

Enron Settles Energy Claims for $1.52B

Enron Corp. has agreed to pay $1.52 billion to resolve charges that it manipulated the market and gouged prices in California and several other Western states during the 2000-2001 energy crisis, according to California Attorney General Bill Lockyer.Under the settlement, a number of California par...

By Stephen Taub • July 15, 2005

Former Enron VP Pleads Guilty

Former Enron Corp. vice president Christopher Calger has pleaded guilty to one count of conspiracy to commit wire fraud, according to the Department of Justice.As part of his plea, Calger has agreed to cooperate with the Enron Task Force’s ongoing criminal investigation of the energy giant’s coll...

By Stephen Taub • July 15, 2005

ISS and IRRC to Merge

Institutional Shareholder Services (ISS) has agreed to acquire the commercial business of the Investor Responsibility Research Center (IRRC) in a merger of two fierce proxy-research rivals located in the Washington, D.C., area.ISS will pay in excess of $10 million, though it would not specify an ...

By Stephen Taub • July 14, 2005

A Refresher Course in Workers’ Comp

Finance executives wondering what’s wrong with the economics of health care at their organizations — not to mention the nation at large — might learn some lessons from the recently released audit report of the school district of Broward County, Florida. The report spells out the failures of the d...

By David Katz • July 14, 2005

Whistle-Blower Case Raises Timing Issue

A Sarbanes-Oxley whistle-blower complaint has raised new issues regarding the 2002 settlement between New York Attorney General Eliot Spitzer and major securities firms aimed at ensuring the independence of Wall Street research, reported Investment Dealers’ Digest.Arturo Cifuentes, who covered th...

By Stephen Taub • July 12, 2005

Influential Delaware Judge Slams Sarbox

Judge Leo Strine, a vice chancellor of the Delaware Court of Chancery, is no doubt a fan favorite among corporate lobbyists.In a speech delivered in London to the European Policy Forum, Strine made it very clear that he opposes the Sarbanes-Oxley Act, describing it as a “strange stew” that couple...

By Stephen Taub • July 6, 2005

Greenberg Willing to Settle, Says Lawyer

After 80 years, Maurice Greenberg is showing some humility.The former chief executive officer of American International Group Inc. has indicated a willingness to work out a deal with New York Attorney General Eliot Spitzer to settle a fraud lawsuit, according to Bloomberg, citing Greenberg lawyer...

By Stephen Taub • July 5, 2005

White House Opposes TRIA Extension

The Bush Administration is urging Congress not to extend the Terrorism Risk Insurance Act of 2002, which requires the federal government to pick up the tab for certain commercial property and casualty losses resulting from foreign acts of terrorism.President Bush signed TRIA into law in the wake ...

By Stephen Taub • July 5, 2005

Glassman Tapped as Acting SEC Chair

President Bush has named Cynthia Glassman as acting chair of the Securities and Exchange Commission, according to the White House website. Glassman, an SEC commissioner since 2002, will fill in for fellow Republican William Donaldson, who stepped down on June 30.Late Thursday, the Bush administra...

By Stephen Taub • July 1, 2005

Donaldson: The Last Agenda

William Donaldson hasn’t spent his final days as chairman of the Securities and Exchange Commission simply attending congratulatory lunches and cleaning out his desk. On Wednesday — his next-to-last day on the job — Donaldson pushed through two agenda items in a sometimes acrimonious meeting amon...

By Stephen Taub • June 30, 2005