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

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

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

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

Lease Accounting: Food for Thought

Applebee’s International Inc. announced that it may become the latest restaurant company to restate its results due to the way it accounts for certain leases or leasehold improvements.The fast-growing company, which is opening a large number of stores in small cities and towns, acknowledged that ...

By Stephen Taub • Jan. 12, 2005

Supreme Court to Rule on Securities Law

A new case taken up today by the U.S. Supreme Court will determine how stringent to make a standard of pleading and proof for securities fraud class-action lawsuits — and the eventual ruling may have broad ramifications for how well companies can fend off future claims.Broudo v. Dura Pharmaceutic...

By Craig Schneider • Jan. 12, 2005

Taking Charges

Amid the bevy of exotic information technologies that companies hope to leverage — or at least understand — it’s easy to lose sight of a relatively low-tech piece of equipment: the telephone. Until, that is, the bill arrives.Make that bills. Every month at Hewlett-Packard, for example, nearly 2,0...

By Norm Alster • Jan. 12, 2005

Former Enron Directors Will Pay $13M

For the second time in less than a week, former directors from a bankrupt company embroiled in an accounting scandal agreed to pay out of pocket to settle shareholder lawsuits.On Friday, 18 former directors of Enron Corp. announced that they would pay $168 million to settle a lawsuit filed by sha...

By Stephen Taub • Jan. 11, 2005

Federal Agencies, Control Yourselves

The Office of Management and Budget has released new rules designed to strengthen the internal control requirements over financial reporting by federal agencies.“Internal control should be an integral part of the entire cycle of planning, budgeting, management, accounting and auditing,” wrote the...

By Stephen Taub • Jan. 11, 2005

Former WorldCom Directors Pony Up $18 Million

In an agreement that will surely send shivers through the spines of thousands of corporate board members, 10 former outside directors of WorldCom (now MCI Inc.) agreed to pay $54 million to settle part of a class-action lawsuit brought by investors burned by the telecom giant’s accounting scandal...

By Stephen Taub • Jan. 7, 2005

Deferring Prosecution of Corporate Crime

A growing number of companies settling charges of accounting fraud have agreed to a form of corporate probation that enables them to avoid criminal prosecution in exchange for good behavior, according to Bloomberg.Companies that have agreed to “deferred prosecution” provisions, reported the wire ...

By Stephen Taub • Jan. 5, 2005

ISS Lays Out 2005 Proxy Strategy

Institutional Shareholder Services (ISS) announced that it will continue to shine a spotlight on boards of directors and hold compensation committees responsible for linking executive pay to performance during the upcoming annual meeting season.The governance research firm elaborated that it will...

By Stephen Taub • Jan. 4, 2005

The Bribery Gap

Regulators have been intensifying their scrutiny of corporate bribery infractions lately. In the last half of 2004, for example:Bristol-Myers Squibb Co. revealed that the Securities and Exchange Commission has launched an investigation into some of the company’s German units for possible violatio...

By David Katz • Jan. 1, 2005

Looking to Land

The Boeing Co. has a lot riding on the 7E7 DreamLiner, the superefficient midsize passenger jet it plans to start producing in 2008. The company has already pumped billions of dollars into development of the aircraft, which it hopes will recapture some of the market share it has lost in recent ye...

By Randy Myers • Jan. 1, 2005

Tending to Your Corporate Reputation

Corporate reputations are rarely examined until after they’ve been damaged — and that’s a big mistake, says The Wall Street Journal’s Ron Alsop, author of The 18 Immutable Laws of Corporate Reputation. Companies should tend to their reputations as a matter of course, counsels Alsop; after all, it...

By Lisa Yoon • Dec. 28, 2004

Courts and Torts: Tax-Shelter Shocker

In October, the Maryland U.S. District Court handed corporate taxpayers a victory when Judge William Quarles ruled against the Internal Revenue Service in a case involving a Black & Decker Corp. (B&D) tax shelter. In essence, the court ruled that a tax shelter can be valid if it has “econ...

By Marie Leone • Dec. 21, 2004

SEC Rethinks Sarbox and Small Companies

The Securities and Exchange Commission is clearly sensitive to the plight of smaller companies that are struggling to comply with new corporate governance rules that apply to large and small companies alike.Earlier this month the SEC gave many of these smaller companies an extra 45 days to meet a...

By Stephen Taub • Dec. 20, 2004

A Half-Billion Ends Time Warner Probes

Time Warner agreed on Wednesday to pay more than $500 million to settle charges with the Securities and Exchange Commission and the Department of Justice.In its pact with the Justice Department, the media giant agreed to pay a fine of $210 million to settle charges that its America Online unit fr...

By Stephen Taub • Dec. 16, 2004

Die Hard (Drive)

In general, the development of faster computers just barely keeps pace with the need for faster computers. Back in 2000, for instance, a PC equipped with a Pentium III chip processing instructions at 500 megahertz per second could easily handle most computing tasks performed by a typical business...

By Esther Shein • Dec. 15, 2004

No Charges for Global Crossing’s Winnick

The Securities and Exchange Commission does not plan to bring civil securities charges against former Global Crossing Ltd. chairman Gary Winnick, according to his attorney, Gary Naftalis.The SEC had also been expected to fine Winnick $1 million for failing to properly disclose a series of transac...

By Stephen Taub • Dec. 14, 2004

SEC May Delay 404 for Foreign Companies

Foreign companies that trade on U.S. exchanges may be the next group of companies to receive a short reprieve from meeting the requirements of Section 404 of the Sarbanes-Oxley Act.Securities and Exchange Commission Chief Accountant Donald Nicolaisen said in a speech this week that he is “sensiti...

By Stephen Taub • Dec. 9, 2004