The Rise (or Fall) of Class Action Costs

The average settlement in a shareholder class action lawsuit amounted to $27.1 million last year, up 33 percent from $20.3 million for 2003, according to the latest annual study of class action litigation by NERA Economic Consulting.Of last year’s 119 settlements, 16 of them exceeded $50 million;...

By Stephen Taub • Feb. 15, 2005

Shareholders Approve Disney Dozen

What a difference a year makes. In 2004, amid calls for Michael Eisner’s resignation, 45 percent of shareholders who voted at Disney Co.’s annual meeting withheld their votes from the chairman and chief executive officer. The withhold campaign spawned similar crusades at a number of other compani...

By Stephen Taub • Feb. 15, 2005

Senate Passes Class-Action Overhaul

In a vote widely seen as a victory for President Bush, the Senate passed a bill late last week that would make it more difficult to file class-action lawsuits against companies. The measure would require many cases to be brought in federal courts rather than in state courts, which are generally c...

By Stephen Taub • Feb. 14, 2005

NYSE Puts Late Filers on Notice

“The disclosure of late filers has taken center stage at the exchange,” Glenn Tyranski, an New York Stock Exchange vice president in charge of compliance, told The Wall Street Journal. “While we can’t make late filers complete their financial statements any faster, we can analyze the situation an...

By Stephen Taub • Feb. 14, 2005

The Deferred-Revenue Dilemma

A technical accounting question concerning how to book an acquired software company’s deferred revenue has stumped accounting standard setters. And the uncertainty has some finance executives fearing increased regulatory scrutiny.The debate centers on how corporate managers should record deferred...

By Craig Schneider • Feb. 14, 2005

Another Rumpus at Disney Annual Meeting

After implementing a series of corporate governance changes and reporting strong financial results in some of its units, the Walt Disney Co. seemed headed toward an uneventful annual meeting tomorrow.Uneventful, that is, until Roy Disney and Stanley Gold — who publicly campaigned last year for th...

By Stephen Taub • Feb. 10, 2005

Settlement for Another Ex-CFO of Enron

Former Enron Corp. chief financial officer Raymond M. Bowen Jr. agreed to pay $500,000 to settle Securities and Exchange Commission charges that he violated antifraud provisions of the federal securities laws.The SEC charged Bowen with knowing of a scheme to manipulate and report false and mislea...

By Stephen Taub • Feb. 9, 2005

Proxy Access Seems ”Stale”

The Securities and Exchange Commission will allow Verizon Communications, Qwest Communications International Inc., and Halliburton Co. to omit resolutions from their proxies that would have given certain shareholders the right to nominate directors.Those measures were sponsored by a number of lar...

By Stephen Taub • Feb. 9, 2005

SEC to Convene Sarbox 404 Roundtable

“The benefits of 404 reports are too important not to do it right,” said William Donaldson, chairman of the Securities and Exchange Commission, in a recent statement on the difficulties faced by smaller companies and foreign private issuers. Most such companies face a July 15 deadline to comply w...

By Stephen Taub • Feb. 8, 2005

U.K. Group Seeks 404 Delay

European companies are pressuring U.S. regulators to delay the implementation of a number of provisions of the Sarbanes-Oxley Act, according to the Financial Times.The FT reported that Digby Jones, director general of the United Kingdom’s Confederation of British Industry, will send a letter Mond...

By Marie Leone and Stephen Taub • Feb. 7, 2005

The Enron Tapes: New Evidence

New evidence surfaced last week to further implicate Enron Corp. traders in schemes to manipulate electricity prices during the height of the California blackouts in 2001. A Seattle-area municipal power company, Snohomish County Public Utility District (PUD), publicly released a new set of teleph...

By Marie Leone • Feb. 7, 2005

WorldCom Directors’ Settlement Nixed

So much for a historic settlement in which former WorldCom directors agreed to be held personally liable in a shareholder lawsuit. The deal collapsed after a judge struck down one critical provision of the agreement.As we reported last month, 10 former outside directors of WorldCom (now MCI Inc.)...

By Stephen Taub • Feb. 3, 2005

Investors Call for Emissions Disclosures

A group of 143 institutional investors managing assets of $20 trillion have sent a letter to the 500 largest companies in the world, asking for disclosure of investment-relevant information concerning their greenhouse-gas emissions.This is the third such request by the London-based Carbon Disclos...

By Stephen Taub • Feb. 3, 2005

Bitter Medicine for Merck

Already ill after the withdrawal of blockbuster arthritis drug Vioxx, Merck & Co. Inc. now has a few more reasons to feel even sicker.The beleaguered drug giant announced that the Securities and Exchange Commission has issued a formal notice of investigation relating to Vioxx, its link to inc...

By Stephen Taub • Feb. 1, 2005

Marsh to Pay $850 Million in Settlement

Marsh & McLennan Cos. agreed to pay $850 million to settle charges of fraud and anti-competitive practices stemming from an investigation by New York State Attorney General Eliot Spitzer.Under the agreement, the world’s largest insurance broker will provide restitution to its policyholders wh...

By Stephen Taub • Feb. 1, 2005

Looking for Gaps

When last we looked at the Overtime Guarantee Act known as Sarbanes-Oxley (see “Sarboxing,” February 2004), finance managers were busy tapping out distress signals from Documentation Hill. At the time, the compliance deadline for Section 404 of the act was fast approaching. While Section 302 had ...

By John Goff • Feb. 1, 2005

Trial Watch: Tyco, WorldCom, HealthSouth, Parmalat

It’s hard to keep track of all the former top executives on trial this week without a court docket. Last week, high-profile trials stemming from the spectacular collapses of Tyco International, WorldCom, HealthSouth, and Parmalat got under way.In the retrial of former Tyco chief executive officer...

By Stephen Taub • Jan. 31, 2005

How to Beat the SEC

For many defendants in cases brought by the Securities and Exchange Commission, settling the claim normally seems like the more alluring alternative to going to court against SEC lawyers.Other defendants, however, might be starting to see the courtroom as a safer haven. With lifetime bans on serv...

By Craig Schneider • Jan. 31, 2005

Multinationals Take Anti-Bribery Pledge

Some large multinational companies are adopting a policy of “just say no” to the temptation to pay bribes to further their business purposes.Forty-seven companies, in fact, have signed a “zero tolerance” pact against paying bribes being sponsored by a number of groups working with the World Econo...

By Stephen Taub • Jan. 28, 2005

Class Actions May Head to Federal Courts

A bill that would further standardize class-action lawsuits could reach the Senate floor within two weeks, according to the Wall Street Journal. The ultimate goal of the proposal, says the paper, is to shift these suits from state to federal courts, which is considered better for business by som...

By Stephen Taub • Jan. 27, 2005

SEC Eyes 404 Break for Foreign Issuers

Securities and Exchange Commission (SEC) Chairman William Donaldson would like to give foreign companies more time to comply with the Sarbanes-Oxley Act’s Section 404, the Financial Times reported.In a speech he gave yesterday at the London School of Economics, Donaldson noted that he had asked t...

By Marie Leone • Jan. 26, 2005

Siebel Embraces Pay for Performance

Siebel Systems has taken a giant step toward becoming a leader in tying pay to performance.Under Siebel’s “performance stock plan,” as described in a regulatory filing, individual performance goals will be based on the company’s 2005 revenue, operating margin, and customer satisfaction, or on oth...

By Stephen Taub • Jan. 24, 2005

Certification Fears and Filing Delays

Medical-imaging software company Vital Images Inc., which had planned to announce its financial results on February 17, has postponed the release until March 3.Bear in mind that chief financial officer Gregory S. Furness resigned earlier this month, effective February 8. The company announced at ...

By Stephen Taub • Jan. 24, 2005

Faith-Based Groups Seek Boardroom Power

Say your prayers, CFOs. Faith-based investing groups are back en masse this year to spread their messages to managements and boards.For finance chiefs who want to maintain or build a wide investor base, it’s become increasingly important to monitor the agenda of such groups as the Interfaith Cent...

By Craig Schneider • Jan. 24, 2005

Reg FD Unfair, Says Chamber of Commerce

The U.S. Chamber of Commerce has filed a friend-of-the-court brief in support of Siebel Systems, which is fighting accusations by the Securities and Exchange Commission that it violated Regulation Fair Disclosure, according to The Wall Street Journal.Last June the SEC alleged that Siebel chief fi...

By Stephen Taub • Jan. 21, 2005