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back the deadline for compliance with Section 404 of the Sarbanes-Oxley Act of 2002, a little-known and perhaps largely outdated auditing standard for outsourcers could hamstring companies that are rushing to send their business pro...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

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

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

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

SEC Boosting Big-Company Caseload

The Securities and Exchange Commission has many of the largest companies in its crosshairs.Susan Markel, SEC Enforcement Division chief accountant, said over the weekend that the regulatory agency is bringing more financial fraud cases against big-name, Fortune 500 companies, according to Reuters...

By Stephen Taub • March 9, 2004

Enron Testimony Could Involve Ken Lay

Testimony delivered last week by ex-Enron treasurer Ben Glisan Jr. might contain information that could help prosecutors decide whether to criminally charge former chairman Ken Lay, according to a report in the Houston Chronicle.Glisan, who pleaded guilty to one conspiracy charge in September 200...

By Stephen Taub • March 8, 2004

Tyco Judge Throws Out Most Serious Charge

The two former top executives of Tyco International currently on trial for looting about $600 million from the conglomerate received a rare bit of good news from a judge on Friday.Manhattan Supreme Court Judge Michael Obus threw out an enterprise- corruption charge against former chief executive ...

By Stephen Taub • March 8, 2004

Martha Stewart Convicted on All Counts

On Friday, February 27, U.S. District Judge Miriam Goldman Cedarbaum threw out the most serious charge against Martha Stewart. According to Judge Cedarbaum, prosecutors had failed to present sufficient evidence to allow the jury to decide the matter.Two days ago, on the third day of deliberations...

By Dave Cook • March 5, 2004

Dell Follows Disney, Splits Top Jobs

One day after Walt Disney Co. split the roles of chairman and chief executive officer, computer giant Dell Corp. did the same.The No. 1 seller of personal computers announced that founder Michael Dell will transfer the CEO title to Kevin Rollins, effective with the company’s annual meeting on Jul...

By Stephen Taub • March 5, 2004

Bar Hopping

Already considered one of the most severe civil penalties for securities violations, officer and director (O/D) bars have been embraced by the Securities and Exchange Commission with a new zeal. Too bad they aren’t being enforced with equal enthusiasm.The numbers reflect very good intentions. Las...

By Kris Frieswick • March 5, 2004

Disney Vote Leads to Board Shakeup

Yesterday’s annual meeting of Disney Corp. shareholders in Philadelphia delivered what is widely being seen as a vote of “no confidence” for chief executive — and now former chairman — Michael Eisner.Fully 43 percent of shareholders withheld their votes from Eisner, reported Reuters — far more th...

By Dave Cook • March 4, 2004

Former HealthSouth Execs Plead Guilty

Two former executives of HealthSouth Corp. have pleaded guilty to charges related to contracts with a hospital in Saudi Arabia, according to the U.S. Department of Justice.Former vice president Vincent Nico agreed to plead guilty to a wire fraud charge contained in a criminal information that was...

By Stephen Taub • March 4, 2004

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

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

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

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