Investor Group Names 25 Underperformers

The Council of Institutional Investors (CII), an organization of large public labor funds and corporate pension funds, released its 14th annual “focus list” of 25 underperforming companies.According to the council, companies included on the list had total stock returns that lagged their broad mar...

By Stephen Taub • Oct. 12, 2004

Guilty Plea for Another Ex-Enron Exec

Timothy Despain, a former assistant treasurer for Enron Corp., pleaded guilty on Tuesday in U.S. District Court in Houston to conspiracy to commit securities fraud. He admitted that from 1999 through the fall of 2001, he and his superiors falsely represented to credit-rating agencies that Enron’s...

By Stephen Taub • Oct. 7, 2004

Another Enron CFO Departs

Houston-based energy company Enron Corp. announced in a government filing Friday that Raymond M. Bowen resigned as executive vice president, chief financial officer, and treasurer, effective immediately.Bowen, who joined Enron in 1996, became treasurer in November 2001, shortly before the company...

By Stephen Taub • Oct. 5, 2004

For AIG, Bad Press Begets Bad Press

More troubles for American International Group.The insurance giant is already being investigated by the Department of Justice and the Securities and Exchange Commission for transactions marketed to PNC Financial Services Group Inc. Now AIG has announced that the commission will probably bring a s...

By Stephen Taub • Oct. 5, 2004

SEC Probes Delphi-EDS Deals

The Securities and Exchange Commission has launched an investigation into Dephi Corp.’s dealings with Electronic Data Systems Corp. and another information-technology provider.The investigation marks a somewhat unusual turn of events. Although there have been scores of SEC investigations of accou...

By Stephen Taub • Oct. 1, 2004

Justice Investigating Fannie Mae: Report

The problems are piling up at Fannie Mae. On the heels of a federal regulator’s report detailing earnings manipulation and other accounting problems, the Justice Department has launched a probe into possible accounting fraud at the giant mortgage company, according to The Wall Street Journal.The ...

By Stephen Taub • Oct. 1, 2004

SEC Charges Ex-CFO with Insider Trading

The Securities and Exchange Commission has filed insider-trading charges against Mark Kelly, the former finance chief of Auto One Finance, a subsidiary of Golden State Bancorp. The SEC also leveled the same charge at three other individuals. The commission asserted that Kelly was asked to help wi...

By Stephen Taub • Sept. 30, 2004

Fannie Mae Restatement May Be on Tap

Fannie Mae seemed to put many of its problems behind it on Monday, when the company agreed to sweeping changes generated by a federal regulatory agency’s critical assessment of Fannie’s accounting policies.Nevertheless, it became clear on Tuesday that the nation’s largest buyer of mortgages hadn’...

By Stephen Taub • Sept. 29, 2004

Lehman Nears Settlement of Enron Suit

Lehman Brothers Holdings Inc. is close to an agreement to pay $222.5 million to settle a class-action lawsuit filed by Enron Corp. shareholders, according to published reports.The lawsuit singled out Lehman’s involvement in the underwriting of at least three Enron debt issues, beginning in 1998, ...

By Stephen Taub • Sept. 27, 2004

Regulator Singles Out Fannie Mae CFO

The Federal agency that oversees the nation’s largest mortgage companies cited Fannie Mae’s vice chairman and finance chief, J. Timothy Howard, for failures in overseeing the organization’s controller’s office and its audit functions. The Office of Federal Housing Enterprise Oversight (OFHEO) sai...

By Stephen Taub • Sept. 24, 2004

SEC Probing Fannie Mae

The Securities and Exchange Commission is investigating accounting issues at Fannie Mae that had been cited by the mortgage company’s federal regulator, according to the presiding director of Fannie Mae’s Board.Fannie Mae’s regulator, the Office of Federal Housing Enterprise Oversight (OFHEO) has...

By Stephen Taub • Sept. 23, 2004

CA Settles Charges for $225 Million

Computer Associates International, Inc. said yesterday that it would pay $225 million to settle investigations by the Department of Justice and the Securities and Exchange Commission. The software company had been charged with inflating company revenues by $2.2 billion.Further, former CA chief ex...

By Stephen Taub • Sept. 23, 2004

SEC Mulls New Charges against AIG

The Securities and Exchange Commission’s staff is thinking about suing American International Group, Inc. for alleged violations of securities laws in connection to deals marketed to PNC Financial Services Group by a unit of the insurer.AIG announced earlier this week that the insurance giant and...

By Stephen Taub • Sept. 23, 2004

Gaps Found in Fannie Mae’s GAAP: Reports

The federal agency that oversees Fannie Mae presented the results of its eight-month investigation to the board of directors of the mortgage giant, detailing earnings manipulation and other accounting problems it has uncovered, according to published reports. So far, neither The Office of Federal...

By Stephen Taub • Sept. 22, 2004

MCI Creditors Facing SEC Probe

A Securities and Exchange Commission probe is focusing on whether members of MCI’s creditors committee committed insider-trading violations when the company, the former WorldCom, Inc., was in Chapter 11, The Wall Street Journal reported.Although the commission’s investigation is currently in a pr...

By Stephen Taub • Sept. 21, 2004

First Enron Criminal Trial Begins Today

After three postponements, the first criminal trial involving former energy giant Enron Corp. is finally scheduled to begin today in federal court in Houston. But although former chief financial officer Andrew Fastow was clearly at the center of the alleged fraud, according to the Houston Chronic...

By Ed Zwirn and Stephen Taub • Sept. 20, 2004

Sarbox, China Style

While many finance executives no doubt regard the penalties for violating the Sarbanes-Oxley Act as stiff, they’re likely to be thankful that they’re not living in China.Indeed, a former accounting director and at least two other employees at a bank in that country were executed after being convi...

By Stephen Taub • Sept. 16, 2004

Fleming, Suppliers Settle with SEC

The Securities and Exchange Commission settled charges against grocery wholesaler Fleming Co. and several suppliers and some employees of suppliers. The SEC’s allegations stemmed from what it said was widespread accounting fraud.To settle the charges, Fleming, the suppliers, and the supplier empl...

By Stephen Taub • Sept. 16, 2004

Enron Funds Pensions via Pipeline Sale

Enron has agreed to take $321 million from the $4.45 billion sale of its U.S. pipelines to fully fund four defined-benefit pension plans, according to published reports. Nearly 17,000 Enron pension plan holders are affected, according to the Houston Chronicle.The reimbursements don’t, however, af...

By Stephen Taub • Sept. 15, 2004

Qwest Fine of $250 Million Expected

Qwest Communications International is said to be close to a settlement that could help put its accounting scandal behind it. The telecommunications company has agreed to settle fraud charges brought by the Securities and Exchange Commission for $250 million, according to the Associated Press. Th...

By Stephen Taub • Sept. 14, 2004

SEC Suit Against Former Qwest CEO Seen

The former chief executive of Qwest Communications International Inc., Joseph Nacchio could soon face civil charges, according to The Wall Street Journal, which cited people familiar with the matter. The paper reported that the regulator recently sent a so-called Wells notice to Nacchio, who ste...

By Stephen Taub • Sept. 14, 2004

Shareholder Social Proposals Gain

Social and environmental issues are increasingly joining the mainstream of shareholder activist issues.The total number of shareholder proposals at U.S. companies involving social issues, for instance, surged by nearly 50 percent, to 207 from 141, during the Jan.1 through Aug. 30 proxy season pro...

By Stephen Taub • Sept. 13, 2004

More Power for Shareholder Activists?

In a new survey conducted by CFO magazine, 56 percent of respondents said dealing with shareholder requests has become a distraction, and 53 percent indicated they’re spending more time with shareholders than ever before. Yet only 11 percent of the executives polled believe that adopting the reco...

By John Goff • Sept. 13, 2004

Hurricanes Damage Bottom Lines

Insurers aren’t the only companies that will pay a price for Hurricanes Charley and Frances. Indeed, a number of other kinds of organizations warned this week that current quarterly earnings will be adversely affected by the storms.Most of them are reasonably predictable. For instance, at least t...

By Stephen Taub • Sept. 10, 2004

Group Seeks Corporate ‘Soft Money’ Rules

A public-interest-advocacy group is urging the Securities and Exchange Commission to require companies to disclose their campaign contributions. The Center for Political Accountability (CPA) Wednesday fired off a letter to SEC Chairman William Donaldson explaining why the regulator should require...

By Stephen Taub • Sept. 9, 2004