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

Waksals Settle ImClone Charges

Former ImClone Systems Inc. chief executive officer Samuel Waksal and his father, Jack Waksal, have agreed to pay more than $5 million to settle civil charges of illegal insider trading, according to the Securities and Exchange Commission. The two individuals consented to the deal without admitti...

By Stephen Taub • Jan. 20, 2005

Qualcomm Seeks End to Staggered Board

Qualcomm Inc. is changing its governance practicesÂsort of. The San Diego-based telecom equipment maker announced that at its March 8 annual meeting, the company will ask shareholders to “declassify” its board of directors.Should the resolution succeed, all board members will come up for re-elect...

By Stephen Taub • Jan. 20, 2005

Sarbox and IT: The Long Haul

With the last of the requirements of the Sarbanes-Oxley Act finally taking effect, it would have been easy to suspect that corporate America’s drive to comply with corporate governance rules would be nearing completion. Yet finance executives who are leading the compliance charge say they do not ...

By Randy Myers • Jan. 19, 2005

Terex Will Restate after 404 Assessment

We’ll probably see many more such announcements in coming months as companies work toward compliance with Section 404 of the Sarbanes-Oxley Act.Diversified manufacturer Terex Corp. announced that it will restate its financials for 2001 through 2003 to correct certain errors. The company implied i...

By Stephen Taub • Jan. 17, 2005

Nearly 600 Reports of Control Weaknesses

On the eve of the oft-delayed starting date for compliance with Section 404 of Sarbanes-Oxley, it appears as if Corporate America has a lot of work to do to meet the requirements of this daunting rule.Last month alone, 56 companies disclosed material weaknesses or significant deficiencies in inte...

By Stephen Taub • Jan. 17, 2005

McKesson Settles Suits for $960 Million

McKesson Corp. announced that it agreed to pay $960 million to settle a class action lawsuit stemming from its 1999 restatement at its subsidiary HBO & Co. Inc.The health services company said it will take a $1.2 billion pre-tax charge ($810 million after tax) to account for the settlement an...

By Stephen Taub • Jan. 14, 2005

Sarbox and the Fight-or-Flight Response

Accepting a position at a once-troubled company in turnaround mode — even a company that had been embroiled in an accounting scandal — used to be an intriguing career move for top managers. Not anymore. With the advent of certification requirements in the Sarbanes-Oxley Act of 2002, joining such ...

By Stephen Taub • Jan. 14, 2005

Risks and Benefits: D&O’s Moral Peril

Besides providing coverage for board members’ legal risks, a directors’ and officers’ insurance policy can supply them with cover for their laxities.That, at least, seems to have been on shareholders’ minds when they insisted that last week’s settlement with 10 ex-directors of the former WorldCom...

By David Katz • Jan. 13, 2005