Alabama Fund Cuts Its Own Enron Deal

Nearly overlooked by the recent multibillion-dollar settlements in the Enron bankruptcy was the agreement between Alabama’s state pension fund and five investment banks.According to Reuters, the Retirement Systems of Alabama will receive $49 million, about 86 percent of the $57 million that the f...

By Stephen Taub • June 16, 2005

Ford Motor Credit Will Amend Disclosures

The credit division of Ford Motor Co. has agreed to pay $700,000 to settle a dispute with the Securities and Exchange Commission over the marketing of its “Ford Money Market Account.”According to the commission, Ford Motor Credit Co. marketed the product as an investment comparable to a traditio...

By Stephen Taub • June 16, 2005

Mylan Doubles Dividend, Plans Repurchase

To fend off a hostile takeover by corporate raider Carl Icahn, pharmaceutical giant Mylan Laboratories Inc. announced that it will double its dividend and repurchase about one-quarter of its shares.The Canonsburg, Pennsylvania-based company stated that a $1.25 billion share buyback will consist o...

By Stephen Taub • June 15, 2005

J.P. Morgan Chase to Pay $2.2B in Enron Settlement

JPMorgan Chase & Co. agreed to pay $2.2 billion as part of a broad settlement with investors stemming from its role as an investment banker to Enron Corp. The deal comes less than a week after Citigroup agreed to pay $2 billion to settle Enron shareholder claims.The Board of Regents of Univer...

By Stephen Taub • June 15, 2005

Out of Business, but Not Off the Hook

Regulators are reminding errant executives that they will be vigorously pursued even if their illegal acts took place many years ago and their companies are currently out of business.Late last week Roys Poyiadjis, a former chief executive officer of defunct software maker AremisSoft Corp., agreed...

By Stephen Taub • June 13, 2005

How Might Rulemaking Change under Cox?

Ever since Christopher Cox was nominated to succeed William Donaldson as chairman of the Securities and Exchange Commission chairman, interested parties have been maneuvering to influence his confirmation, or at least his agenda.Donaldson, a Republican who was appointed by George W. Bush, has sid...

By Stephen Taub • June 13, 2005

SEC Seeks Info from Calpine

Calpine Corp. announced that the Division of Enforcement of the Securities and Exchange Commission has requested documents related to previous revisions of its reserves and financial statements.In a regulatory filing, Calpine elaborated that the SEC is seeking information related to its downward ...

By Stephen Taub • June 10, 2005

New Problems, New Shakeups at Delphi

Delphi Corp. — whose accounting is being probed by the Securities and Exchange Commission and the Federal Bureau of Investigation — announced that it has accepted the resignations of treasurer Pam Geller and former vice president of treasury, mergers and acquisitions John Blahnik.The auto-parts m...

By Stephen Taub • June 10, 2005

Citigroup to Pay $2B in Enron Settlement

Citigroup has agreed to pay $2 billion to settle a shareholder lawsuit stemming from its role in the Enron Corp. accounting scandal.The settlement is the largest related to Enron’s bankruptcy, according to Bloomberg. Indeed, it is one of the largest in corporate history, though Reuters noted that...

By Stephen Taub • June 10, 2005

Does the Andersen Ruling Open Doors?

It seems that the Supreme Court’s reversal of Arthur Andersen’s obstruction-of-justice conviction has inspired other parties to reexamine their legal fate.The high court ruled that a company may not be convicted where the wrongdoing isn’t intentional and pervasive, and that the acts of a few cann...

By Stephen Taub • June 9, 2005

Where Workers’ Compensation Goes Wrong

On the surface, you might think a company that self-insures its workers’ compensation risks would be providing its executives with an excellent means of managing that liability and controlling the resulting cash flow.After all, an employer that self-funds this insurance also holds on to money it ...

By David Katz • June 9, 2005

Hiring Cuts at the SEC

The Securities and Exchange Commission may be embarking on a new, leaner regulatory era in more ways than one.Bloomberg has reported that the commission will cut hiring by 10 percent, citing a memo by SEC Pacific regional director Randall Lee to his staff. “Unfortunately, the budget crisis is rea...

By Stephen Taub • June 7, 2005

Lea Fastow Leaves Prison

Lea Fastow has left prison after serving nearly 11 months for filing a false tax return, according to published reports.Wearing a white polo shirt and jeans, the former Enron Corp. assistant treasurer looked healthy when she emerged at 4 a.m. from the Federal Detention Center in downtown Houston,...

By Stephen Taub and Dave Cook • June 6, 2005

Former Qwest CFO Pleads Guilty

Former Qwest chief financial officer Robin Szeliga has agreed to plead guilty to a single count of insider trading, according to the Department of Justice.Szeliga, who is scheduled to be sentenced on July 14 in U.S. District Court in Denver, faces up to 10 years in prison and up to a $1 million f...

By Stephen Taub and Dave Cook • June 3, 2005

Bush Nominates Cox to Head SEC

President Bush has nominated Rep. Christopher Cox (R-Calif.) to succeed William Donaldson as chairman of the Securities and Exchange Commission.Donaldson announced yesterday that he would step down on June 30.Cox is the first chairman of the House Committee on Homeland Security as well as a veter...

By Dave Cook and Stephen Taub • June 2, 2005

SEC Chairman Donaldson to Resign

Follow the continuing discussion on the CFO BlogWilliam Donaldson, the 27th chairman of the Securities and Exchange Commission, will step down from his post on June 30.In a statement, Donaldson said that he took the reins of the SEC at a time when “public confidence was severely undermined, refle...

By Dave Cook • June 2, 2005

Former Charter CFO Gets 14 Months

The former chief financial officer and three other former executives of Charter Communications Inc. have been sentenced for their role in the cable company’s accounting scandal, according to the Securities and Exchange Commission.Judge Carol E. Jackson of the U.S. District Court in St. Louis sent...

By Stephen Taub • June 1, 2005

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