Sarbox Adding Accountability, Say Execs

The Sarbanes-Oxley Act is helping independent directors and audit committees to hold management accountable for its actions, according to a new PricewaterhouseCoopers Management Barometer survey.According to the survey, 88 percent of senior executives report that directors at their company are ex...

By Stephen Taub • March 2, 2004

Disney Dissidents Reaching Critical Mass

This is going to be one tense annual meeting that Walt Disney Co. will conduct Wednesday in Philadelphia — even though the entire board is guaranteed to be re-elected.No rival candidates are standing for election against Disney’s 11-member board, Reuters points out. Yet approximately 30 percent o...

By Stephen Taub • March 1, 2004

Will the Government Legislate Executive Pay?

The chairman of the Public Company Accounting Oversight Board warned that the U.S. government could intervene to control executive compensation if company managers do not, according to Reuters.“If the anger of the American people continues and business leaders do not wake up soon, I predict that ...

By Stephen Taub • March 1, 2004

Get Up to Speed, OFHEO Tells Fannie Mae

The Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac, has raised concerns that Fannie Mae’s archaic accounting systems could lead to more problems at the mortgage giant, according to Dow Jones.In a letter to Fannie earlier this week, reported the wire serv...

By Stephen Taub • Feb. 27, 2004

More Calls for Withholding Disney Votes

Glass, Lewis, an independent shareholder adviser, and Calpers, the largest public pension fund, have urged investors to oppose the reelection of Michael Eisner to the Walt Disney Co. board of directors.Calpers cited the company’s “dismal performance for the last five year period” and its lack of ...

By Stephen Taub • Feb. 27, 2004

SEC Delays Implementation of Section 404

The Securities and Exchange Commission has postponed the implementation of Section 404 of the Sarbanes-Oxley Act for the second time.Section 404 directed the SEC to adopt rules regarding internal controls at public companies. It also requires that a company’s independent auditors attest to and re...

By Stephen Taub • Feb. 26, 2004

MONY Maneuvers to Preserve Axa Deal

The MONY Group Inc. has taken a number of steps to counter shareholder opposition to its planned $1.5 billion sale to French insurance company Axa SA.The firm stated that it plans to pay an additional dividend of 10 cents per share — above and beyond the 23 to 25 cents that MONY promised to pay b...

By Stephen Taub • Feb. 24, 2004

Former Enron CEO Skilling Pleads Not Guilty

It took over two years, but Jeffrey Skilling finally did his version of the perp walk yesterday.The former Enron Corp. CEO, the highest-ranked catch so far of a lengthy fraud investigation into the collapsed company, was taken to a Houston court in handcuffs Thursday, where he pleaded not guilty ...

By Ed Zwirn • Feb. 20, 2004

Prosecution Hasn’t Shaken Former Tyco CFO

Former Tyco International Ltd. chief finance officer Mark Swartz was apparently unrattled by grilling from prosecutors on Wednesday. He is expected to be the sole defense witness in the case against him and former Tyco chairman Dennis Kozlowski for allegedly looting Tyco of $600 million.Prosecuto...

By Ed Zwirn • Feb. 19, 2004

Specialist Firms Settle with NYSE

The five biggest trading firms on the New York Stock Exchange have reportedly agreed to pay $240 million to settle charges that they improperly handled client trades and skimmed profits, shortchanging investors by at least $155 million.The settlement will be presented for formal approval on Thurs...

By Ed Zwirn • Feb. 19, 2004

Is Skilling’s Time Just About Up?

Prosecutors may bring a grand jury indictment against Jeffrey Skilling, Enron’s former chief executive officer, as early as this week, according to the Houston Chronicle.The charges would come on the heels of an indictment last month against former chief accounting officer Rick Causey and guilty ...

By Stephen Taub • Feb. 17, 2004

Out for the Count

These are turbulent times on global currency markets, with the euro hitting a string of all-time highs against the dollar. Worth around 80 cents two years ago, the euro rose from $1.14 last October to more than $1.28 in early January. And it’s expected to continue to rise—some forecasters predict...

By Ben McLannahan and Poul Funder Larsen • Feb. 17, 2004

Computer Associates E-mail Policies Probed

Federal authorities are questioning officials of Computer Associates about its E-mail retention system and policies, according to Newsday. The questioning is tied to an investigation of the software giant’s accounting practices, the newspaper reported.Investigators have reportedly already intervi...

By Stephen Taub • Feb. 13, 2004

Regulator Hires Deloitte for Fannie Mae Exam

The Office of Federal Housing Enterprise Oversight (OFHEO) has awarded a contract to Deloitte & Touche LLP to buttress the regulator’s efforts in conducting a special examination of Fannie Mae’s accounting.Deloitte & Touche was selected from five vendors submitting competitive bids in res...

By Stephen Taub • Feb. 13, 2004

The Pleasure of Doing Business at Tyco

Former Tyco chief financial officer Mark Swartz defended a glitzy $2 million birthday bash held in Sardinia for the wife of Dennis Kozlowski, then chairman of Tyco International Ltd.Testifying for the second day at his and Kozlowski’s trial, the former finance executive insisted that the party mi...

By Stephen Taub • Feb. 12, 2004

Tyco’s Former CFO Claims Innocence

Former Tyco International Ltd. chief financial officer Mark Swartz denied he ever broke the law in the 11 years he spent at the conglomerate.When Swartz, who is on trial along with former chairman Dennis Kozlowski for allegedly looting the conglomerate of $600 million, was asked by his lawyer Cha...

By Stephen Taub • Feb. 11, 2004

SEC Seeks Closer Ties with FDA

Securities and Exchange Commission officials say the SEC will work more closely with the Food and Drug Administration to root out violators of securities laws.The FDA already supplies some technical help to the commission’s corporate finance division in the division’s review of SEC filings. It al...

By Stephen Taub • Feb. 11, 2004

Enron ”On the Hook” for Pension Losses

Failed energy giant Enron Corp. agreed to put the proceeds of its $2.3 billion sale of Portland General Electric into an interest-bearing account to cover its share of pension losses, according to a report in the Portland (Oregon) Tribune.The agreement came last Wednesday in U.S. Bankruptcy Court...

By Lisa Yoon • Feb. 10, 2004

Swartz Will Testify, but Not Kozlowski

Former Tyco chief financial officer Mark Swartz is expected to testify today at the trial involving him and his former boss, ex-chairman L. Dennis Kozlowski.The trial was postponed Monday because Kozlowski injured his ankle and foot on Friday in a fall.Charles Stillman, the top defense lawyer for...

By Stephen Taub • Feb. 10, 2004

SEC Probing Flowserve Restatements

Flowserve Corp., a provider of industrial flow-management services, said the SEC has launched an informal inquiry related to its February 3 announcement to restate its financial statements dating back to 2000.Last week the company announced that during the latter part of the fourth quarter, it be...

By Stephen Taub • Feb. 10, 2004

Parmalat, Park Avenue, and Flighty Files

A huge number of Parmalat-related documents were removed from the offices of the food and milk giant’s New York City law firm several weeks before the Italian company was raided, according to an account posted on the Web site of the Financial Times.The paper — citing several employees, most of wh...

By Stephen Taub • Feb. 9, 2004

General Mills, Executives Receive Wells Notice

General Mills Inc. announced that it has received a Wells notice from the Securities and Exchange Commission in connection with the SEC’s probe, first made public in October, into the company’s sales practices and related accounting.The notice also covers chief executive officer Steve Sanger and ...

By Stephen Taub • Feb. 5, 2004

Premiums Soar for Directors

The rash of corporate scandals and recently established legal exposure for directors under Sarbanes-Oxley have driven up the price of liability insurance for boardroom officials.Last year, premiums for directors’ and officers’ (D&O) liability insurance rose an average 33 percent, on top of a ...

By Stephen Taub • Feb. 4, 2004

Sarboxing

When last we left Mark Thompson (“Drowning in Data,” November 2003), the senior vice president of finance and information technology at Crown Media Holdings was shopping for software. Specifically, he was looking for an application that would help him manage the company’s international contract r...

By John Goff • Feb. 3, 2004

Cheese It, the States!

Which should you fear more: a Formal Order of Investigation subpoena from the Securities and Exchange Commission, or a Martin Act subpoena from New York Attorney General Eliot Spitzer? Either would send shivers down the spine of any finance executive, but lately it’s the state subpoenas that have...

By Tim Reason • Feb. 2, 2004