D&O Premiums Fell 10 Percent in 2004

Premiums for directors’ and officers’ (D&O) liability insurance fell 10 percent in 2004, the first decline since 1999, according to Tillinghast’s 2004 Directors and Officers Liability Survey.At first glance, some observers may suggest that the declining premiums are a signal that insurers are...

By Stephen Taub • Dec. 9, 2004

Busting the Brokers

New York State Attorney General Eliot Spitzer has already changed the way insurance brokers and companies conduct business with each other. Chances are, his burgeoning investigation of the insurance industry will change the way you do business with them, too.Insurance has long been a chummy game....

By Randy Myers • Dec. 9, 2004

WTC Verdict Won’t Hike Insurance Prices

Despite losing a lawsuit related to the World Trade Center collapse, officials at property/casualty companies say that other corporate customers will not be affected by their financial loss.Earlier this week, a jury decided that, for insurance purposes, the terrorist attacks on the World Trade Ce...

By Stephen Taub • Dec. 8, 2004

Make Some Noise

The so-called quiet period prior to the public sale of securities could get a little louder. The Securities and Exchange Commission is proposing to lift some restrictions on companies’ pre-IPO communications.Under a 1933 law, during the period surrounding an initial public offering the company ma...

By Kate O'Sullivan • Dec. 7, 2004

Bribery Charges Stop More Deals

A growing number of companies are consulting with the Justice Department about possible bribery lapses before moving forward with cross-border acquisitions according to the Wall Street Journal.Besides reducing their financial risk, prospective acquirers are looking into whether target companies h...

By Stephen Taub • Dec. 6, 2004

Kmart Vendors Hit with Fraud Charges

The Securities and Exchange Commission has sent a loud message that it will not tolerate individuals who help others commit fraud, even if the ones committing the fraud work for another company.As part of its probe of an accounting scandal at Kmart in early 2001, the SEC filed civil fraud charges...

By Stephen Taub • Dec. 6, 2004

Laying Down the Law

There’s a new seat at the management table these days, much to the relief of many CFOs. Largely in response to Sarbanes-Oxley, companies have begun to formalize the compliance role, creating a function dedicated to the watchdog tasks that have previously fallen to finance.In fact, according to Ma...

By Kate O'Sullivan • Dec. 6, 2004

SEC Suspends Trading in 26 Companies

The Securities and Exchange Commission suspended trading in the securities of 26 companies for at least 10 days, punishing the companies for not filing their financial results on time.Although the companies are very small and hardly household names, the move suggests that the commission considers...

By Stephen Taub • Dec. 3, 2004

Ex-Exec Settles Insider-Trading Charges

The Securities and Exchange Commission has settled illegal insider-trading charges with Evan S. Collins, a former finance executive of Network Associates Inc. Once a high-flying technology company, Network Associates is now known as McAfee Inc., after the antivirus software for which it is still ...

By Stephen Taub • Dec. 2, 2004

Off with CalPERS’ Head?

Sean Harrigan, president of the California Public Employees’ Retirement System (CalPERS), the nation’s largest pension fund, thinks he will be fired today as a result of his strong activist agenda, according to the Los Angeles Times.Harrigan, a regional executive for the United Food and Commercia...

By Stephen Taub • Dec. 1, 2004

Oracle Execs Cleared of Insider Trading

Oracle Corp. chairman and former chief financial officer Jeff Henley and chief executive Lawrence Ellison have been cleared of charges of illegally trading on insider information, according to the Associated Press.The two executives won a summary decision in a lawsuit stemming from trades execute...

By Stephen Taub • Dec. 1, 2004

Judge Rules Against Scrushy over Sarbox

Score this round to the scribes of the Sarbanes-Oxley Act. In the first court challenge against the landmark corporate governance law, a federal judge ruled against former HealthSouth chief executive Richard Scrushy, who had asserted that several charges accusing him of falsely certifying the hea...

By Stephen Taub • Dec. 1, 2004

Courts and Torts: Vetting Compensation

Even the The Incredibles would have a hard time rescuing the Walt Disney Co.’s compensation committee from their current predicament. In a trial eight years in the making, Disney shareholders are seeking $200 million in damages from board members and one-time president Michael Ovitz, alleging tha...

By Marie Leone • Nov. 30, 2004

The High Costs of Sarbox Compliance

Companies are being hit with a surge in costs stemming from their efforts to comply with the Sarbanes-Oxley Act, two surveys released last week found. But many of the companies aren’t sure what those efforts are achieving. For example, a survey of almost 270 board directors at U.S. companies rel...

By Stephen Taub • Nov. 29, 2004

Bond Insurer Is Latest Probe Target

The government’s probe of the insurance industry has extended to a major insurer of bonds.Last week, a day after completing the sale of $350 million of 30-year bonds, MBIA Inc. reported that it received identical subpoenas from the Securities and Exchange Commission and the New York Attorney Gene...

By Stephen Taub • Nov. 23, 2004

OSHA Orders Controller to be Rehired

A former finance executive of an industrial-products company has regained his job and will receive back wages under the whistle-blowing provision of the Sarbanes-Oxley Act. The Department of Labor’s Occupational Safety and Health Administration (OSHA) has ordered the American Standard Cos. and su...

By Stephen Taub • Nov. 19, 2004

New Spitzer Initiative Against Insurers

New York Attorney General Eliot Spitzer has expanded his probe of the insurance industry to companies specializing in life, accident, and disability insurance.Spitzer has filed a civil complaint against Universal Life Resources Inc. (ULR), alleging that the company steered business to insurers in...

By Stephen Taub • Nov. 17, 2004

Former Boeing CFO Pleads Guilty

In a federal court in Alexandria, Virginia, former Boeing Co. chief financial officer Michael Sears pleaded guilty yesterday to a felony count involving the illegal hiring of a top Air Force procurement officer, according to wire-service reports. In October 2002, Darleen Druyun — then the Air For...

By Dave Cook • Nov. 16, 2004

SEC Charges Hollinger, Two Executives

The Securities and Exchange Commission filed a fraud complaint on Monday against Hollinger International Inc. former chairman and chief executive officer Conrad M. Black, former deputy chairman and chief operating officer F. David Radler, and Hollinger Inc., the parent company that Black had cont...

By Stephen Taub • Nov. 16, 2004

Sarbox 404 Goes into Effect Tomorrow

Although many companies are reportedly not ready for it, the era of internal-controls compliance begins in earnest tomorrow. That’s when Section 404 of the Sarbanes-Oxley Act goes into effect for all companies whose fiscal year ends after today.There will be nothing to file on Tuesday. But by ear...

By Stephen Taub • Nov. 15, 2004

Deloitte Sued for $2 Billion

Deloitte & Touche LLP could be on the hook for as much as $2 billion if it loses a legal claim related to the use of insurance products that are under investigation by government regulators, The Wall Street Journal reported. The brewing legal battle is based on so-called earnings-management i...

By Stephen Taub • Nov. 12, 2004

Three Companies Probed On Bribe Charges

The Securities and Exchange Commission is currently investigating at least three major, multinational companies for allegedly bribing foreign officials.In its quarterly filing, Bristol-Myers Squibb Co. disclosed that in late October the SEC launched an informal inquiry into the activities of the ...

By Stephen Taub • Nov. 11, 2004

Risks and Benefits: Braking the Brokers

Do corporate finance executives really need an insurance broker to stand between them and their companies’ insurers?Amid the hubbub surrounding New York Attorney General Eliot Spitzer’s probe of bid-rigging and business-steering in the insurance industry, that basic question isn’t being asked muc...

By David Katz • Nov. 11, 2004

After the Storm

The four hurricanes that devastated Florida this summer packed a bigger punch than Andrew, 1992’s monster storm. Together, Charley, Frances, Ivan, and Jeanne racked up more than $20 billion in insured property damage, compared with Andrew’s $15.5 billion. The number of claims from the hurricanes ...

By Ilan Mochari • Nov. 11, 2004

SEC Probing Reports of Pension Conflicts

The Securities and Exchange Commission is turning up the heat on pension consultants to determine whether conflicts of interest exist between the consulting firms and the money managers they recommend to clients, the Wall Street Journal reported.The SEC opened an enforcement investigation to dete...

By Stephen Taub • Nov. 10, 2004