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

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

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

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

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

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

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

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