Does the SEC Need ”New Blood”?

The appointment of a successor to outgoing Securities and Exchange Commission commissioner Harvey Goldschmid is already stirring partisan passions.Goldschmid, one of two Democrats on the five-person commission, has announced that he will leave the SEC this summer to return to teaching at Columbia...

By Stephen Taub • June 1, 2005

Infinite Risk?

What do many corporate buyers of insurance have in common with American International Group? Perhaps more than they would like to admit. Like AIG, many companies in the past few years have bought finite insurance, which transfers a prescribed amount of risk for a particular liability. What regula...

By Ronald Fink • June 1, 2005

How to Talk to a Hedge Fund

Like the day traders of the late 1990s, hedge funds are plaguing investor-relations (IR) departments. Notorious for short selling — and holding stocks for days or even hours, rather than years — most funds are not the type of buy-and-hold investors that companies relish. Hedge funds often swoop i...

By Joseph McCafferty • June 1, 2005

Supreme Court Reverses Andersen Verdict

In a 9-0 ruling, the U.S. Supreme Court has overturned the conviction of accounting firm Arthur Andersen LLP for its role in the Enron scandal, according to published reports.The reversal of legal status for the firm — once a member of accounting’s Big Five — does little for the former partners a...

By Stephen Taub • May 31, 2005

GAO Cites SEC for Internal-Controls Gaps

With thousands of companies struggling to prove to the Securities and Exchange Commission that their internal controls are air-tight, the SEC itself has been cited by the Government Accountability Office for “material” controls weaknesses.Reporting on its recent study of the SEC, the GAO said tha...

By Stephen Taub • May 31, 2005

Enron Workers: Check Is in the Pipeline

A federal judge approved a settlement that will use two Enron Corp. insurance policies to put about $69 million into the hands of former Enron employees who lost their pension funds, according to the Houston Chronicle.Since the deal covers more than 20,000 current and former employees, the averag...

By Stephen Taub • May 27, 2005

Scrushy Jury Ordered to Deliberate

Jurors are reportedly having trouble coming up with a verdict in the accounting fraud trial of HealthSouth Corp. founder Richard Scrushy. On Tuesday, they told U.S. District Judge Karon Bowdre that they were deadlocked after four days of deliberations, according to Bloomberg. “We cannot unanimous...

By Stephen Taub • May 26, 2005

SEC Finds Itself $48 Million Short

The Securities and Exchange Commission, which has been aggressively cracking down on accounting abuses and will be scrutinizing companies’ assessments of their internal-controls deficiencies, has reportedly unearthed a hefty financial deficiency of its own.The securities regulator has discovered...

By Stephen Taub • May 26, 2005

Dollar Doldrums

Finance executives can’t say they weren’t warned. After more than a year of dire announcements that the United States was living beyond its means—and that budget and trade deficits could mean an eventual, sudden decline of the dollar against the currencies of the country’s major trading partners—...

By Ed Zwirn • May 26, 2005

Brewer’s Performance Coming to a Head

At least four class-action lawsuits have been filed against Molson Coors Brewing Co., accusing management of knowing about potential financial problems before the February 9 merger of Molson Inc. and Adolph Coors Co.Adolph Coors became the parent of the merged company and adopted its current name...

By Stephen Taub • May 18, 2005

When the Price of Fuel Is Cruel

These days, it’s not just airlines and overnight-delivery companies that worry about fuel prices: everyone is in the energy-management business.Recent increases in the cost of retail and industrial energy — natural gas, electricity, and especially oil — have affected all areas of commerce, from h...

By Harlyn Aizley • May 16, 2005

Three More Sentences in Enron Barge Deal

A former Enron Corp. executive and two former Merrill Lynch & Co. bankers were sentenced Thursday for their roles in the infamous Nigerian barge deal.Dan Boyle, a former mid-level executive in the energy company’s finance department, received a sentence of 3 years and 10 months in prison and ...

By Dave Cook and Stephen Taub • May 13, 2005

Insurer Terrorism

Leave it to the insurance industry to turn a threat to its advantage.Faced with the prospect of losing federal backing for terrorism insurance, property/casualty insurers are jacking up prices on the coverage, insurance brokers say. What’s more, some insurers are apparently making a market out of...

By David Katz • May 12, 2005

Regulators Propose Finite-Risk Rules

New York insurance regulators have proposed new accounting rules for finite-risk transactions, which could eliminate many of the types of abuses at the center of the American International Group Inc. investigations, according to The Wall Street Journal.According to the Journal, the New York State...

By Stephen Taub • May 12, 2005

Greetings and Solicitations

When David Mroz, a manager at Shannon Precision Fastener, needed to buy a new LCD projector for a training class, he didn’t head to Staples to hunt down a bargain. Nor did he go online to search out the best price on the product. Instead, the quality manager at the Madison Heights, Mich.-based Sh...

By John Edwards • May 11, 2005

Kickback Scheme Alleged for Kodak Exec

A tax accountant for Eastman Kodak Co. faces charges of money laundering and mail fraud stemming from a kickback scheme that allegedly cost the company more than $4 million.Director of state and local taxes Mark S. Camarata was accused in U.S. District Court in Rochester, New York, of authorizing...

By Stephen Taub • May 10, 2005

Finite-Insurance Subpoenas for Two Companies

General Electric Co. announced that it has received a subpoena from the Securities and Exchange Commission seeking documents related to “certain loss mitigation insurance products.” The subpoena is general in nature, stated GE, adding that it will cooperate fully with the commission.According to ...

By Stephen Taub • May 4, 2005

Purcell Stays; Morgan Stanley to Declassify

It looks like Philip Purcell will remain chairman and chief executive of Morgan Stanley after its board of directors decided not to make any management changes.The board did institute a number of corporate governance changes, however, that ultimately will make it easier for unhappy shareholders t...

By Stephen Taub • May 3, 2005

KPMG Fires Three over Tax Shelters

KPMG LLP fired a senior executive and two partners in moves tied to the scrutiny the Big Four firm is facing concerning its tax-shelter business, according to The Wall Street Journal. The senior executive is Richard Smith, a partner since 1995 and head of the firm’s tax-services division since 20...

By Stephen Taub • May 2, 2005

Putting Property First

In mergers and acquisitions, real estate has typically been an afterthought. Recently, though, property has taken center stage. Consider the current plans for a $6.6 billion private-equity buyout of Toys “R” Us. “We became interested in Toys “R” Us principally because it has lots and lots of terr...

By Don Durfee • May 1, 2005

In Your Own Defense

You aren’t paranoid. There really is a target on your back that says “Sue Me.” A recent study by PricewaterhouseCoopers LLP concludes that 203 private securities class-action lawsuits were filed against U.S. companies and their directors and officers in 2004 — a 16 percent increase over 2003. In ...

By Lori Calabro • May 1, 2005

Feeling the Pain

Bob Ross used to love his job as controller of clothing and housewares retailer Urban Outfitters. Today, he says, “I have no passion for this at all. If something doesn’t change soon, I’ll have to throw in the towel.”Ross says he now spends his days “documenting countless procedures and processes...

By Tim Reason • May 1, 2005

Supremes Could Upend Andersen Conviction

A number of Supreme Court justices reportedly suggested yesterday that they might not have agreed with the Justice Department’s case leading to the conviction of Arthur Andersen, the erstwhile accounting firm, for shredding Enron Corp. documents. While hearing arguments in Andersen’s appeal, Just...

By Stephen Taub • April 29, 2005

Did Wal-Mart Fire a Whistleblower?

A former Wal-Mart vice president who claims he was fired after reporting questionable payments requested by the company’s former vice chairman has asked federal prosecutors to investigate whether he should have been protected as a corporate whistleblower, according to The Wall Street Journal. Jar...

By Stephen Taub • April 29, 2005

Kozlowski Declares His Innocence

After three years of silence, former Tyco International Ltd. chief executive officer L. Dennis Kozlowski took the stand in a Manhattan courthouse and declared that he was innocent of charges that he stole from the conglomerate that he once ran.Kozlowski and former CFO Mark H. Swartz are accused o...

By Stephen Taub • April 28, 2005