Bank of America Settles Enron Suit

Bank of America has announced that it will pay about $60 million to settle a class action lawsuit, led by the regents of the University of California, on behalf of investors in Enron securities.Unlike a number of other financial institutions, Bank of America had relatively small dealings with Enr...

By Stephen Taub • July 7, 2004

Compliance Creep

It used to be that shorter monthly closes were considered a best practice. But these days, shorter is relative.Thanks to increases in compliance demands and an internal focus on reliability, closes are actually getting longer. New data from The Hackett Group’s 2004 “Finance Book of Numbers,” in f...

By Lori Calabro • July 6, 2004

Donaldson’s Former Company Probed by SEC

A company whose audit committee formerly included Securities and Exchange Commission chairman William Donaldson confirmed published reports that it is being investigated by the SEC.EasyLink Services Corp., a provider of electronic information exchange services, said Thursday that the SEC is revie...

By Stephen Taub • July 6, 2004

SEC Charges Siebel, CFO, with Reg FD Breaches

The Securities and Exchange Commission has charged Siebel Systems Inc. with violating its Regulation Fair Disclosure (FD) rule for the second time since the rule went into effect less than four years ago, according to Reuters.The commission also charged Kenneth Goldman, the software company’s CFO...

By Stephen Taub • June 30, 2004

Democratic Reps. Weigh In on Proxy Rules

Six key Democratic members of Congress called for the Securities and Exchange Commission to issue new rules that would provide large investors more access to the process of nominating a board of directors.The representatives see such a measure as a deterrent to scandal. “Adoption of this rule wou...

By Stephen Taub • June 30, 2004

Former CFO Faces Time for Embezzlement

The former chief financial officer of the University of Florida Foundation pleaded no contest to charges that he wrote himself five checks worth $850,000 from foundation accounts, according to the South Florida Sun-Sentinel.Kenneth Hillier, who had worked for the foundation for 16 years and had d...

By Stephen Taub • June 29, 2004

SEC to Publish Comment Letters Online

The Securities and Exchange Commission will make available on its Web site the thousands of pieces of correspondence concerning company and mutual-fund filings reviewed by the SEC’s Corporation Finance and Investment Management divisions.The SEC will start releasing comment letters and responses ...

By Stephen Taub • June 28, 2004

Big GAAP, Little GAAP

Small companies are feeling the pinch of increased regulation these days. Many CFOs of small businesses say they are being unfairly punished for the indiscretions of such large companies as Enron, WorldCom, and Tyco by having to implement new rules that are disproportionately time-consuming and c...

By Joseph McCafferty • June 28, 2004

SEC Settles with Two Former Qwest Execs

The Securities and Exchange Commission settled civil fraud charges against two former Qwest Communications International, Inc. officers. The charges involved the alleged roles of the ex-officers in helping the telecom overstate revenues.Augustine Cruciotti, a former senior vice president of Qwest...

By Stephen Taub • June 24, 2004

Career Education Corp. Faces SEC Probe

Career Education Corp. reported that it received a formal order of investigation from the Midwest Regional Office of the Securities and Exchange Commission .The company, which operates 80 colleges and universities in the United States and overseas, said it intends to continue to fully cooperate w...

By Stephen Taub • June 24, 2004

You Bought It, Now Audit

These days, audits are rarely a source of solace, but finance executives who find IT daunting may actually be relieved to know that IT audits are suddenly in vogue, and provide exactly the sort of big-picture view that most CFOs need. IT audits are not, as you may have guessed, a matter of pure a...

By Bob Violino • June 23, 2004

Lay’s Attorney on the Offensive

Over the weekend, the Houston Chronicle reported that in about two weeks, U.S. prosecutors will ask a federal grand jury to hand up an indictment of former Enron Corp. chairman Kenneth Lay.Rather than sit back, Lay’s attorney — Mike Ramsey — has gone on the offensive. Ramsey called a press confer...

By Stephen Taub • June 23, 2004

Donaldson Rails at Proxy Critics

William Donaldson, chairman of the Securities and Exchange Commission, lashed out at critics of the SEC’s proposed rules that would open up the proxy process.In a speech over the weekend to a meeting of corporate directors at Stanford University, Donaldson decried the “escalating, shrill, and fea...

By Stephen Taub and Joseph McCafferty • June 22, 2004

Beware the ”Trash” Folder

As more and more business becomes documented in E-mail rather than memos and reports, document retention becomes a challenge on several levels. Whether it’s compliance with the Sarbanes-Oxley Act of 2002, Securities and Exchange Commission regulations, or laws governing the handling of patient da...

By John McPartlin • June 22, 2004

Former HealthSouth CFO Gets Probation

If you are one of the scores of top corporate executives who have been accused of committing accounting fraud during the past few years, the best place to have performed these transgressions, it seems, was at HealthSouth Corp.Even though the government has boasted that it quickly extracted guilty...

By Stephen Taub • June 22, 2004

Proxy Season Quieter in 2004, Says ISS

The 2004 proxy season was less confrontational than it has been in recent years, according to an analysis by research firm Institutional Shareholder Services.In fact, said the ISS, the trend this season saw corporations listening to and acting upon reasonable shareholder concerns. Sure, there wer...

By Stephen Taub • June 18, 2004

Andersen Conviction Upheld on Appeal

A federal appellate court in New Orleans unanimously upheld the two-year-old jury conviction of accounting firm Arthur Andersen for obstruction of justice related to its client Enron, according to the Houston Chronicle.Andersen was convicted on June 15, 2002. That October, U.S. District Judge Mel...

By Stephen Taub • June 18, 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

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

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

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

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

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

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