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 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

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

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

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

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

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

Turning Point for Pollution Insurance

While much hard science goes into the tidying up of a polluted corporate site, gauging the future costs of that job can involve skills that are a good deal softer.Armed with varying and sometimes patented cleanup strategies, different environmental consultants can come in with cost estimates that...

By David Katz • Sept. 9, 2004

Better Accounts of Future Cleanup Costs

Until recently, difficulties in predicting cleanup costs haven’t mattered much to senior finance executives. That’s because, under Securities and Exchange Commission rules and Financial Accounting Standards Board dictates, they’ve had the latitude to report the cheapest cost estimates. “There isn...

By David Katz • Sept. 9, 2004

Hurricane Frances Spares Insurers

Hurricane Frances will probably not rack up aslarge an insurance bill as initially feared. With premium hikes typically following big losses, that’s good news for most insurance-buying companies not affected by the devastating storm.At first, news reports citing estimates from Risk ManagementSolu...

By Stephen Taub • Sept. 8, 2004

Spurning the CFO Act

Some think it was just an oversight that the Department of Homeland Security, created two years ago, became the only cabinet-level agency not subject to the CFO Act of 1990. Indeed, bills in both houses of Congress now seek to apply the act to the DHS — which would require Senate approval for its...

By Roy Harris • Sept. 8, 2004

Benefits on the Fast Track

Companies finally have a regulatory blueprint for how to use their captive insurer to fund benefits programs. Now the question is, how many will take advantage of it?Last November, International Paper became the first company to receive “fast-track” approval from the Department of Labor to fund i...

By Lori Calabro • Sept. 7, 2004

SEC Would Revive Expired Fraud Claims

The Securities and Exchange Commission is reportedly pushing to give investors with expired fraudulent claims against companies more time to sue.In a friend-of-the-court brief filed last week, the SEC asked the Second U.S. Circuit Court of Appeals in New York to make Section 804 of the Sarbanes-O...

By Craig Schneider • Sept. 7, 2004

Don’t Blame Cheney

Finance employees are facing off in a newly filed complaint against Halliburton Co. Although the embattled energy and construction company recently paid $7.5 million to settle an SEC charge that it had failed to disclose a 1998 accounting change, Houston-based Halliburton is not yet in the clear....

By Kate O'Sullivan • Sept. 3, 2004

One Size Fits All?

Should there be a “little GAAP”?That’s a question the American Institute of Certified Public Accountants is currently tackling. Last winter, the New York-based professional organization formed a Private Company Financial Accounting Task Force to determine just how well generally accepted accounti...

By Lori Calabro • Sept. 3, 2004