Short-Term Focus Can Be Riskier: Report

An excessive focus on short-term risk management can be hazardous to corporate health, suggests a new report from Deloitte & Touche LLP.The analysis, of U.K.-based businesses, may also serve up lessons for publicly traded companies in the United States and the rest of the world.Between 1995 a...

By Stephen Taub • Sept. 8, 2005

Environmentally Bankrupt?

The American Smelting & Refining Co. (Asarco) has been the subject of contention ever since 1899, when it was established to consolidate William Rockefeller’s U.S. mining interests. In 1901, Meyer Guggenheim wrested control of the company from Rockefeller, merged Asarco with his established o...

By Marie Leone • Sept. 8, 2005

Seeing No Evil

Like many risk managers, Dave Hennes eagerly awaited notification about his company’s financial slice of the $850 million settlement that insurance broker Marsh reached last January 31 with New York Attorney General Eliot Spitzer. When Hennes, director of risk management at The Toro Co., learned ...

By Russ Banham • Sept. 8, 2005

BearingPoint Subject of Formal Probe

BearingPoint Inc. announced that the Securities and Exchange Commission has elevated its informal probe to a formal order of investigation. The company, formerly KPMG Consulting, added that it believes the subject matter of the formal investigation is substantially the same as of the probe, and t...

By Stephen Taub • Sept. 7, 2005

Prosecutors Eye Ex-Chairman of MBIA

Former MBIA Inc. chairman and chief executive officer David H. Elliott is in the cross-hairs of federal prosecutors, who are probing the circumstances that led to the world’s largest bond insurer to restate seven years of earnings, according to Bloomberg, citing people familiar with the matter.Th...

By Stephen Taub • Sept. 6, 2005

No Criminal Charges for MCI

Although an investigation continues into the $11 billion accounting fraud at WorldCom, prosecutors will not press criminal charges against its successor, MCI Inc., according to press reports.A major reason that MCI and government officials were able to reach a non-prosecution agreement is because...

By Craig Schneider • Sept. 2, 2005

Apocalypse Soon

Risk — big, disruptive risk — is the theme of the day. It’s manifest in public concerns about terrorist attacks, nuclear proliferation, global warming, the end of oil, the trade deficit, the budget deficit, and the housing bubble. It’s rife in Corporate America, where large industries are totteri...

By Edward Teach • Sept. 1, 2005

Banks Face Suit on Mandatory Arbitration

A suit filed against eight of the nation’s largest credit-card companies alleges that they colluded to require customers to settle disputes through arbitration, reported The Wall Street Journal.The lawsuit, filed in a New York federal court last month, seeks class-action status on behalf of seven...

By Craig Schneider • Sept. 1, 2005

Siebel Prevails in Reg FD Case

In a surprise decision, a judge has dismissed a case brought by the Securities and Exchange Commission against Siebel Systems and chief financial officer Kenneth Goldman alleging violations of Regulation Fair Disclosure.Reg FD, which took effect in 2000, bans U.S. public companies from selectivel...

By Craig Schneider • Sept. 1, 2005

Lawsuit Seeks Billions for Land Leasing

Cobell vs. Norton, reportedly the largest and longest-running class-action lawsuit against the federal government, claims that the United States cannot provide an accounting of billions of dollars held in trust for 500,000 American Indians and their heirs, reported The Arizona Republic.Earlier th...

By Craig Schneider • Aug. 31, 2005

Icahn Seeks 10 Percent of Time Warner

An investment group led by financier Carl Icahn, who is bent on encouraging management reform at Time Warner Inc., may make a tender offer to buy as much as 10 percent of the media conglomerate, according to Bloomberg. At the company’s current market price, that kind of encouragement would cost $...

By Craig Schneider • Aug. 31, 2005

Missing Email May Cost Morgan $10M

The Securities and Exchange Commission may fine Morgan Stanley $10 million, or even more, for failing to preserve email documents that may have been relevant to SEC cases, reported The Wall Street Journal.The commission first proposed a $10 million fine in January, but the Journal reported that a...

By Craig Schneider • Aug. 30, 2005

DVD Disclosures Eyed by SEC

The Securities and Exchange Commission has launched an informal inquiry into Pixar Animation Studios regarding the DVD release of its movie “The Incredibles,” according to The Wall Street Journal.Pixar announced on June 30 that it would miss its second-quarter earnings forecast because retailers ...

By Craig Schneider • Aug. 26, 2005

SEC’s Civil Injunctions ‘Unenforceable’?

The U.S. Court of Appeals for the 11th Circuit in Atlanta ruled earlier this month that the broad injunctive orders commonly sought by the Securities and Exchange Commission are “unenforceable,” reported The Wall Street Journal.A defendant who violates an injunctive order, which the SEC employs t...

By Craig Schneider • Aug. 25, 2005

AOL Settles Spitzer Probe for $1.25M

Internet service provider America Online will pay $1.25 million in penalties to settle an investigation into practices that allegedly made it difficult for customers to cancel their service, according to reports.About 300 AOL customers filed complaints with the office of New York State Attorney G...

By Craig Schneider • Aug. 24, 2005

SEC Sues Former Kmart CEO, CFO

The Securities and Exchange Commission has filed civil charges against the former chief executive officer and former chief financial officer of Kmart for allegedly misleading investors about the discounter’s financial condition in the months leading up to the company’s bankruptcy.According to the...

By Stephen Taub • Aug. 23, 2005

SEC May Charge MBIA

MBIA Inc. announced late Friday night that the Securities and Exchange Commission may bring civil charges stemming from a reinsurance arrangement it made several years ago with a unit of the Pittsburgh-based Allegheny Health, Education, and Research Foundation (AHERF).According to the bond insure...

By Stephen Taub • Aug. 22, 2005

SEC Could Sue Goodyear, Ex-Finance Execs

The Securities and Exchange Commission has served the Goodyear Tire & Rubber Co. and two former company finance executives with Wells Notices, according to company documents and press reports. The action stems from an investigation into the company’s accounting practices and the financial re...

By Stephen Taub • Aug. 17, 2005

JPMorgan-Enron Settlement: $1 Billion

JPMorgan Chase & Co. has agreed to pay $350 million to Enron Corp. to settle “MegaClaims” litigation stemming from the energy trader’s bankruptcy. The investment bank also agreed to drop claims against the energy giant, bringing the total value of the settlement to an estimated $1 billion, ac...

By Stephen Taub • Aug. 16, 2005

Senator Seeks Drug-Research Probe

The chairman of the Senate Finance Committee has called on regulators to launch an investigation based on a Seattle Times report that medical researchers routinely accept money to reveal secrets about drug studies to Wall Street firms, according to that paper.Sen. Charles Grassley (R-Iowa) told t...

By Stephen Taub • Aug. 12, 2005

Investors Press for AIG Board Overhaul

Shareholders attending the annual meeting of American International Group Inc. on Thursday seemed to be in an agreeable mood. With former chief executive officer Maurice Greenberg out of the picture, they OK’ed the insurance giant’s entire slate of 15 directors and renewed the contract of auditor...

By Stephen Taub • Aug. 12, 2005

Fannie Restatement: Wait Till Next Year

Fannie Mae acknowledged that it would not complete what could amount to a $11 billion restatement until the second half of 2006. As a result, the company conceded, it would be breaching the New York Stock Exchange’s listing standards.The mortgage giant “is engaged in regular discussions with the ...

By Stephen Taub • Aug. 11, 2005

Smarter Insurance Shopping

Changing insurance carriers isn’t a decision most CFOs can breeze through. In a market that continues to soften, many companies can save money by switching insurers, but in doing so they can also ensnarl their borrowing resources and tie up their risk managers.A company that buys a policy includi...

By David Katz • Aug. 11, 2005

Class-action Plaintiffs Head to Court

So far this year, six securities class actions have gone to trial, according to The National Law Journal, citing data from Institutional Shareholder Services.Doesn’t sound like much?Consider, then, that only nine cases have gone to trial since the passage of the Private Securities Litigation Refo...

By Stephen Taub • Aug. 9, 2005

Kodak Facing SEC Probe

Eastman Kodak Co. has disclosed that the Securities and ExchangeCommission is looking into its recently announced earnings restatement.According to Kodak, which filed its second-quarter results Tuesday, the regulator informed the company in March that it had launched an informal inquiry “into the...

By Stephen Taub • Aug. 9, 2005