Calpers to Oppose Health-Care Merger

The California Public Employees’ Retirement System announced that it would oppose the proposed merger of WellPoint Health Networks and Anthem Inc., citing excessive pay packages to be given to top WellPoint executives.Calpers is calling on other shareowners to oppose the merger, which would creat...

By Stephen Taub • June 16, 2004

Voluntary Sarbox for Private Companies

The Sarbanes-Oxley Act, which was created to better scrutinize and police the accounting and controls of public companies, has inspired a growing number of private companies, to change their accounting practices voluntarily.In a survey of 1,359 chief financial officers of privately held businesse...

By Stephen Taub • June 16, 2004

Halliburton Accused of ”Deficiencies” in Iraq

Government auditors are turning up the heat on Vice President Dick Cheney’s former company.William Reed, director of the Pentagon’s Defense Contract Audit Agency (DCAA), testified in congressional hearings that his agency found “significant deficiencies” in how Halliburton has handled billions of...

By Stephen Taub • June 16, 2004

Link Found Between Candor, Share Prices

Honesty is the best policy, if a company’s leadership wants a better stock price.That’s the conclusion of the Rittenhouse Rankings survey, which claims that there’s a positive correlation between candid communication and superior share-price performance. Of the sample 100 Fortune 500 companies su...

By Stephen Taub • June 15, 2004

Computer Associates Suit Mulled

Activist investor Sam Wyly could be causing yet another stir at Computer Associates, which has been the target of an investigation by the Securities and Exchange Commission and Department of Justice for more than two years.Ranger Governance Ltd, an investment group led by Wyly, a Texas investor, ...

By Stephen Taub • June 11, 2004

Lea Fastow Headed to Detention

Lea Fastow, the former Enron employee and wife of former Enron CFO Andrew Fastow, will start serving her one-year sentence on a misdemeanor tax charge on July 12, according to published reports.She has been ordered to report to the Federal Detention Center in downtown Houston, which is considered...

By Stephen Taub • June 10, 2004

Whistle-Blower Claims Mostly Dismissed

One of the most frequently used provisions of the Sarbanes-Oxley Act empowers corporate whistle-blowers, explicitly laying out procedures that protect them from being punished by the companies they blow the whistle on. Under the act, such employees are entitled to get their jobs back and be reimb...

By Stephen Taub • June 10, 2004

Managing the Risks of Sarbox 409

Even as it spawns new risks for their corporations, the pressures imposed by real-time reporting under the dictates of Section 409 of the Sarbanes-Oxley Act can add to the legal liabilities of finance chiefs and their bosses.Under that section, companies must disclose the facts about financially ...

By David Katz • June 10, 2004

The Reality of Real-Time Reporting

To report or not to report?When finance executives must choose whether to pump out an 8-K or wait until the quarter’s end to reveal a possibly important business event, now might be a good time to err on the side of caution. That, at least, is the working philosophy of Mike Gersie, chief financia...

By David Katz • June 10, 2004

AMEX Passes on Proxy Action

The American Stock Exchange chose not to take action against a company on a matter involving a shareholder proposal that had not appeared on the company’s proxy statement.In November 2003, Espey Manufacturing & Electronics Corp., a small maker of electronic-power supplies and other components...

By Stephen Taub • June 9, 2004

Sullivan Pleads Guilty to Conspiracy

Former WorldCom CFO Scott Sullivan pleaded guilty to a Mississippi state charge stemming from his role in the telecom company’s accounting scandal.The ex-finance chief pleaded guilty to one count of conspiracy to commit securities fraud, according to the Associated Press. Although sentencing was ...

By Stephen Taub • June 9, 2004

Enron Trial, Martha Sentencing Postponed

One judge postponed the start of the first scheduled Enron criminal trial while another judge postponed the sentencing of Martha Stewart, who has been convicted of obstruction of justice.In Houston, U.S. District Judge Ewing Werlein, who will preside over the first scheduled Enron criminal trial,...

By Stephen Taub • June 8, 2004

Vivendi’s Ex-CFO under Investigation

Guillaume Hannezo, the former chief financial officer of Vivendi Universal SA, is being investigated by French officials looking into alleged wrongdoing at the media and telecom giant, according to wire service reports.Hannezo was formally put under investigation on Friday for possible stock mani...

By Stephen Taub • June 8, 2004

Company Size and 404 Compliance

How companies approach compliance with Section 404 of the Sarbanes-Oxley Act varies widely, depending upon the size of the company, a survey has found.According to Parson Consulting, which surveyed 96 finance directors and financial controllers of U.S. public companies, there are “pronounced diff...

By Stephen Taub • June 8, 2004

SEC Toughening Up on Noncooperation

Last week’s $37 million settlement between the Securities and Exchange Commission and Symbol Technologies — part of the bar code giant’s $138 million settlement of civil and criminal charges — reflects a stronger stance by the commission toward companies that fail to cooperate with SEC investigat...

By Stephen Taub • June 7, 2004

Sarbox Compliance and Technology

According to a Forrester Research survey of 878 technology decision-makers at North American enterprises, 77 percent indicate that their technology spending will grow this year in response to the Sarbanes-Oxley Act.That’s a vast increase compared with last year’s survey, in which 85 percent of ex...

By Stephen Taub • June 4, 2004

No HealthSouth Prison Time?

Starting to discern a pattern?For the fourth time this week, a judge chose not to imprison a former HealthSouth Corp. executive who pleaded guilty to a role in the company’s massive accounting fraud.Catherine Fowler, a former HealthSouth cash manager and vice president of treasury, was sentenced ...

By Stephen Taub • June 4, 2004

Former HealthSouth CFO Avoids Prison

Another onetime HealthSouth Corp. executive has avoided prison time by pleading guilty for his role in the company’s multibillion-dollar accounting scandal.On Wednesday, former chief financial officer Malcolm McVay was sentenced to six months’ home detention and five years’ probation, according t...

By Stephen Taub • June 3, 2004

Former Auto-Parts CFO Sentenced

Peter Bromberg, former chief financial officer of Motorcar Parts & Accessories Inc., was sentenced to five months in prison and five months of home detention for his role in a financial fraud, according to the Securities and Exchange Commission and the U.S. Attorney’s Office for the Central D...

By Stephen Taub • June 3, 2004

Fastow Won’t Testify at First Enron Trial

Former Enron Corp. chief financial officer Andrew Fastow is not on the witness list for the first criminal trial involving the former energy giant, scheduled to start Monday.Although Fastow was clearly at the center of the alleged fraud, according to the Houston Chronicle, prosecutors did not add...

By Stephen Taub • June 3, 2004

Ohio Energy Company Faces Fed Probe

Two federal agencies have launched a criminal investigation into Ohio power company DPL Inc., which last month fired three top executives after investigators hired by its audit committee issued a report criticizing upper management.The office of the U.S. Attorney for the Southern District of Ohio...

By Stephen Taub • June 2, 2004

Former Qwest Finance Exec Pleads Guilty

In a deal with federal prosecutors, a former finance executive at Qwest Communications International Inc. has pleaded guilty to one felony charge connected to the Denver-based company’s 2001 accounting scandal.Grant Graham, former chief financial officer for Qwest’s global business unit, pleaded ...

By Stephen Taub • June 2, 2004

Former Rite Aid CEO, CFO Sentenced

Two former top executives of Rite Aid Corp. are heading to prison.Last week, former chief executive officer Martin Grass was sentenced to eight years for his role in the drug store chain’s $1.6 billion accounting scandal, reported Reuters. Grass was also sentenced to three years of supervised rel...

By Stephen Taub • June 1, 2004

Most Creditors Approve Enron Plan

Enron Corp. last week took a giant step closer to emerging from bankruptcy when 104 of 111 creditor classes agreed to its reorganization plan.For a creditor class to have accepted the plan, the company noted, two-thirds of the dollar amount represented by the class and more than 50 percent of the...

By Stephen Taub • June 1, 2004

Former Rite Aid Exec Is Sentenced

The first of six former Rite Aid Corp. executives who pleaded guilty for their roles in the drug store chain’s accounting scandal has faced the music, and now he’s ready to pay the piper.Eric Sorkin, the former vice president for pharmacy purchasing, pleaded guilty in June 2003 to conspiring to o...

By Stephen Taub • May 27, 2004