Pension Funds Taking More Risk

U.S. pension funds are taking on a little more risk in an effort to keep pace with their growing pension obligations. In addition, they are interviewing and hiring new investment managers at an unprecedented rate as they search for innovative strategies, according to a pair of new studies recentl...

By Stephen Taub • March 29, 2004

Tyco’s Twelve Angry Men and Women

Friday was a short day for the Tyco jurors. Perhaps the unusually balmy weekend weather in New York will help clear their heads of the “poisonous” atmosphere in the jury room, as they described it last week in a note to the judge.Another note, sent early Friday afternoon to New York State Supreme...

By Stephen Taub and Dave Cook • March 29, 2004

Food Fight

If only that mad cow in Washington State were the worst beef facing U.S. trade representatives. Sure, it’s payback time for the countries whose meat was once banned here. But the United States has far more countries frothing at the mouth over the Continued Dumping and Subsidy Offset Act (CDSOA), ...

By Tim Reason • March 29, 2004

Former Dynegy Executive Gets 24 Years

A federal judge handed down a 24-year sentence yesterday under tough new rules intended to punish white-collar criminals.Jamie Olis, once a midlevel executive at Houston-based energy company Dynegy Inc., and two former associates were found guilty last year of disguising a $300 million loan to th...

By Dave Cook • March 26, 2004

Europe Seeks Record Fine for Microsoft

Mario Monti, the European competition commissioner who in the past has blocked a number of large, high-profile mergers, is seeking to fine Microsoft Corp. $613 million for allegedly abusing its Windows monopoly, according to the Financial Times.This would be the highest penalty imposed on a compa...

By Stephen Taub • March 24, 2004

Rigas Family Wins Funds from Insurers

A federal judge awarded $300,000 each to five former executives of Adelphia Communications involved in civil lawsuits, ruling that an insurer cannot unilaterally rescind a directors’ and officers’ liability policy, according to The Legal Intelligencer.“Insurance carriers do not function as courts...

By Stephen Taub • March 24, 2004

Parmalat Accountants on the Defensive

Parmalat’s accountants helped falsify the food giant’s books and failed to blow the whistle on its finances soon enough, stated a document prepared by Italian prosecutors, according to Reuters.Late last week prosecutors identified 29 people and three institutions that they want to put on trial fo...

By Stephen Taub • March 23, 2004

Skilling’s Legal Tab Tops $23 Million

Jeff Skilling is rapidly racking up those legal costs.The indicted former Enron chief executive officer has shelled out $23 million to his lawyers already, according to Reuters.Nonetheless, in Houston, U.S. District Judge Sim Lake let stand a restraining order that freezes $55 million of Skilling...

By Stephen Taub • March 22, 2004

Fastow Sentencing Date Delayed

Andrew Fastow won’t be moving into his new one-room digs anytime soon.The former Enron chief financial officer, who has agreed to spend 10 years in prison as part of his plea deal, had his scheduled sentencing delayed.He was initially expected to be officially sentenced in April, but U.S. Distric...

By Stephen Taub • March 22, 2004

CMS Settles SEC Round-Trip Charges

CMS Energy Corp. announced a settlement Thursday with the Securities and Exchange Commission regarding $5.2 billion in round-trip energy transactions by a subsidiary, reported the Houston Business Journal.Former controller Terry Wooley agreed to a cease-and-desist order not to engage in further e...

By Stephen Taub • March 19, 2004

GE to Seek Shareholder OK on Severance

Companies are becoming increasingly responsive to shareholders in this age of Sarbanes-Oxley and high-profile executive trials. A growing number of companies are acting on shareholder wishes that are not binding — and sometimes that have not garnered majority support.The most recent example: Gene...

By Stephen Taub • March 19, 2004

‘Tis the Season to Delay SEC Filings

The Goodyear Tire & Rubber Co. announced that it won’t be able to file its annual report by the March 30 deadline, but that it will file “as soon as practicable” following the resolution of an investigation into its overseas accounting problems.HealthSouth Corp., which is also being investiga...

By Stephen Taub • March 18, 2004

DPL Controller Alleges Self-Dealing

The controller of DPL Inc. has charged the Ohio utility’s top executives with self-dealing, according to the Dayton Daily News.DPL controller Daniel Thobe’s March 10 internal memo — which the News says it received anonymously — was addressed to W. August Hillenbrand, chairman of the company’s fin...

By Stephen Taub • March 18, 2004

Martha Stewart Resigns from MSO Board

As expected, Martha Stewart has resigned as a director and chief creative officer of Martha Stewart Living Omnimedia Inc. (MSO). She will assume the newly created position of founding editorial director and will report to the company’s CEO, Sharon Patrick.According to the company, Stewart will co...

By Stephen Taub • March 16, 2004

Tough New Accounting Rules for Europe

The European Commission will announce new rules tomorrow to shore up corporate governance and compliance, according to Reuters.Mindful of tougher U.S. rules for public companies and auditors, and fresh off a rash of its own accounting scandals, the EC is expected to propose an independent supervi...

By Stephen Taub • March 15, 2004

SEC Amendments Respond to Sarbanes 409

The Securities and Exchange Commission has approved long-awaited new requirements for 8-K filings, in response to Section 409 of the Sarbanes-Oxley Act.The amendments add 10 disclosure items that would trigger an 8-K filing, including two items now required in quarterly and annual reports.In addi...

By Stephen Taub • March 15, 2004

Somewhere under the Rainbow

Think you’re relieved that the deadline for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 has been moved back several months? IT vendors are no doubt cheering as well.In December, IT consulting firm Meta Group Inc. said that its poll of IT vendors and business-service providers fo...

By CFO Editorial Staff • March 15, 2004

A World of Trouble

Beware a false sense of security: Even though the SEC has pushed back the deadline for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, a little-known and perhaps largely outdated auditing standard for outsourcers could hamstring companies that are rushing to send their business pro...

By Craig Schneider • March 15, 2004

Groups Hatch Issuer-Analyst Ethics Code

Complaints that corporate issuers pressure securities analysts to sway their assessments have led two groups on different sides of the issue to hatch an ethics code to govern issuer-analyst relations.The organizations — the Association for Investment Management and Research (AIMR) and the Nationa...

By Marie Leone • March 12, 2004

Calpers Nixes Five HP Directors

One week after 43 percent of shareholders withheld their votes for Walt Disney chairman Michael Eisner, the California Public Employees Retirement System (Calpers) withheld votes for five Hewlett-Packard directors.The pension fund cited the computer and printer maker’s noncompliance with Calpers’...

By Stephen Taub • March 12, 2004

Tyco D&O Insurer Must Pay Kozlowski’s Costs

A New York Supreme Court judge recently supplied former Tyco International chairman Dennis Kozlowski’s with a bit of good news — and saddled Federal Insurance Company with the potential for more than six months’ worth of legal fees.Supreme Court Justice Helen Freedman last Friday ordered the insu...

By Stephen Taub • March 11, 2004

SEC Cracks Down on Stonewalling

The Securities and Exchange Commission has apparently adopted a zero-tolerance policy for companies that don’t cooperate with its investigations.Actions against two companies this week appeared to reveal the trend. As part of a settled enforcement action announced yesterday, for example, the comm...

By Stephen Taub • March 11, 2004

The O-Ring in Your Supply Chain

Could a labor dispute on U.S. shores be considered a “political risk” — and a threat to supply chains in the United States? Surely political risk is the province of Asia, or the Middle East, or Latin America, the consequence of civil unrest that threatens the inflow of raw materials to stateside ...

By David Katz • March 11, 2004

SEC Seeks to Enforce Amerco Orders

The Securities and Exchange Commission has applied to a U.S. District Court for an order to enforce investigative subpoenas served on Amerco. The company hasn’t cooperated with the regulatory agency’s investigation into possible violations of federal securities laws, the SEC contends.The SEC’s ap...

By Stephen Taub • March 10, 2004

GM Finance Chief Rails at Sarbox

General Motors CFO John Devine said that regulation under the Sarbanes-Oxley Act had gone too far, frightening company management and threatening U.S. competitiveness overall.Executives are focusing on compliance to the detriment of their corporations’ core business operations, he said in an inte...

By Stephen Taub • March 10, 2004