Judgments Against Former Safety-Kleen Execs

The former chief financial officer and the former chief executive officer of hazardous-waste disposal company Safety-Kleen Corp. will pay fines as part of a final judgment against the pair for their role in an accounting scandal.The complaint by the Securities and Exchange Commission, filed in De...

By Stephen Taub • Jan. 30, 2004

Regulator Getting Tough with Freddie Mac

The government agency that oversees Freddie Mac ordered the number-two mortgage-finance company to increase its minimum capital requirement by 30 percent due to the higher operational risk arising from the company’s recent accounting scandal.The Office of Federal Housing Enterprise Oversight (OFH...

By Stephen Taub • Jan. 30, 2004

Less Talk, More Action

John Tiner has been dubbed “Europe’s most influential regulator.” As the new chief executive of the UK’s Financial Services Authority (FSA), he wants to overhaul the way financial markets are overseen, slashing red tape while cracking down on repeat offenders. Promising less talk, more action, ca...

By Ben McLannahan • Jan. 30, 2004

Bargaining for Better D&O Coverage

Not just because it was the day after Christmas does Duke Energy risk manager Jeffery Triplette recall December 26, 2002, as a particularly glowing time.On that day, New York district court judge Jed Rakoff threw out 13 shareholder class-action suits alleging that the Fortune 500 utility was usin...

By David Katz • Jan. 29, 2004

British FSA Cites Deloitte Unit for Compliance Flaws

A unit of Deloitte & Touche was fined $1.4 million on Wednesday by Britain’s financial watchdog for serious compliance failings, according to Reuters.The Financial Services Authority stated that the fine against Deloitte & Touche Wealth Management Ltd. was the largest it has ever levied a...

By Stephen Taub • Jan. 29, 2004

Risk Management

CFOs and thrill-seekers may be the only people whose ears actually perk up at the word risk. Understanding, preparing for, and responding to risk are key elements of the job, and now, thanks largely to current events, technology is being brought to bear in the still rather hazily defined area of ...

By John Verity • Jan. 28, 2004

Causey Celebre

Another Enron senior executive has taken the perp walk.Richard Causey, Enron’s former chief accounting officer, was charged with six counts of securities fraud and conspiracy to commit securities fraud yesterday and pleaded not guilty. He surrendered to the FBI in Houston around dawn, and was tak...

By Stephen Taub • Jan. 23, 2004

Show Us the Cash!

Much ink has been devoted to earnings guidance for equity investors, but what do debt investors want? Earnings per share is a nice-to-have, and some debt investors are happy with information about business trends and the general direction of future earnings. More than any other metric, however, f...

By Kara Newman • Jan. 22, 2004

Fastow’s Plea Is Not the Final Chapter

Indicted on 98 criminal counts, former Enron CFO Andrew Fastow ultimately pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit wire fraud and securities fraud. He will forfeit $29 million in assets (most of which had already been frozen by federal a...

By Tim Reason • Jan. 16, 2004

It’s Official: Fastows Plead Guilty

The Fastows are going to jail.Former Enron Corp. CFO Andrew Fastow pleaded guilty on Wednesday to two counts of conspiracy and agreed to forfeit $29 million in assets, most of which were previously frozen by federal authorities, according to Reuters. He also reportedly agreed to cooperate with pr...

By Stephen Taub • Jan. 15, 2004

Andrew and Lea Fastow Agree to Plead Guilty

Former Enron Corp. chief financial officer Andrew Fastow and his wife, Lea, a former Enron assistant treasurer, will plead guilty on Wednesday, according to the Houston Chronicle.Andrew Fastow is scheduled to plead guilty before U.S. District Judge Kenneth Hoyt; some time afterward, Lea Fastow is...

By Dave Cook and Stephen Taub • Jan. 14, 2004

Fastow-ian Bargain?

(Editor’s note: Andrew and Lea Fastow each pleaded guilty on Wednesday, January 14.)As plea negotiations play out for Andrew and Lea Fastow, financial executives would do well to consider the consequences — and not only for the unhappy couple.From a career perspective, there has never been a grea...

By Marie Leone • Jan. 9, 2004

Judge OKs Guilty Plea by Lea Fastow

A federal judge in Houston will allow former Enron assistant treasurer Lea Fastow to plead guilty to one tax violation. Under the proposed deal, according to Reuters, she would serve a five-month sentence.The pact would seemingly pave the way for prosecutors to work out an agreement with her husb...

By Stephen Taub • Jan. 9, 2004

Andrew and Lea Fastow Seeking Plea Deals

Former Enron chief financial officer Andrew Fastow and his wife, Lea, are negotiating plea bargains that would result in time behind bars for the couple, according to the Houston Chronicle.The deals being discussed call for Andrew Fastow to serve 10 years in prison and Lea Fastow to serve five mo...

By Stephen Taub • Jan. 8, 2004

How Low Is Too Low?

Conventional wisdom holds that institutional investors, particularly mutual funds, automatically unload all holdings of stocks trading below $5 a share. As a result, finance executives may worry that wholesale institutional selling could put further pressure on a teetering share price. If a stock...

By Kara Newman • Dec. 11, 2003

Enron Examiner Cites Auditors, Banks

Enron examiner Harrison Goldin came down hard on two of the Big Four accounting firms and two major investment banks in a new report addressing transactions involving the controversial special-purpose entities at Enron Corp.Accounting firms KPMG LLP and PricewaterhouseCoopers LP, as well as Bank ...

By Stephen Taub • Dec. 8, 2003

Safety First

“Only you can prevent forest fires” was the cautionary message of a long-running risk management campaign. An accounting scandal may seem much less dramatic than a wildfire — but to your company, it could be just as devastating.Roger Friedberger has certainly been keeping a lookout. Since 1996, w...

By David Katz • Dec. 8, 2003

Watch Your Mouth

When Regulation Fair Disclosure took effect in October 2000, finance executives felt some trepidation that their own words might eventually hang them. As a company’s main spokesperson on matters financial, after all, a CFO is in the precarious position of routinely answering analysts’ and shareho...

By Lori Calabro • Dec. 1, 2003

Enron Could Force Kenneth Lay to Repay $94 Million Loan

Enron could seek to force Kenneth Lay, its former chairman, and Jeffrey Skilling, its former CEO, to repay millions of dollars in loans to spread among creditors because the loans weren’t approved by the entire board, a bankruptcy court examiner reportedly concluded.From May 1999 through October ...

By Stephen Taub • Nov. 26, 2003

Internal Controls

In a race against time,” begins an IBM press release issued late last month, “IBM…is marshaling its global resources to help businesses meet pending deadlines on new compliance regulations.”A race against time indeed. As businesses race to comply with key provisions of the Sarbanes-Oxley Act of 2...

By Scott Leibs • Nov. 17, 2003

Investor Relations for Small-Cap Companies

At companies of every size, executives who deal with investor relations must face hurdles posed by the economy, scheduling conflicts, securities regulation, and a plethora of other circumstances. At small-cap companies, however, they face additional challenges, often created by a scarcity of reso...

By Kara Newman • Nov. 13, 2003

Today Putnam, Tomorrow the Rest

As the big Wall Street investment banks have already discovered to their cost, America’s fund managers are learning that once the regulators start scrutinising industry practices, one discovery tends to lead to another. When Eliot Spitzer, New York’s attorney-general, and William Galvin, Massachu...

By Economist Staff • Nov. 7, 2003

Citi’s New Stance

In business, nothing speeds forgiveness like success. Citigroup cranked out a record $4.1 billion in earnings from continuing operations in the first quarter of this year, and followed it with $4.3 billion the following quarter. That performance moved investors, who had driven the stock price dow...

By A CFO Interview • Nov. 1, 2003

Wall Street Warrior

Eliot Spitzer seems bent on bringing another Wall Street giant to its knees. This time the 44-year-old New York Attorney General is targeting the mutual-fund industry, with a probe of late-day trading activities and market timing at Canary Capital Partners that has led to the first-ever criminal ...

By A CFO Interview • Nov. 1, 2003

Unequal Justice

With a Republican in the White House and Republicans controlling both houses of Congress, prospects looked bright earlier this year for property/casualty insurers to achieve long-sought reforms of the civil-justice system. President Bush had made tort reform a major plank of his legislative agend...

By Russ Banham • Nov. 1, 2003