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

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

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

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

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

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

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