Fraud Squad

U.S. Attorney Patrick Meehan hasn’t yet caught any companies engaging in the fraudulent accounting tactics that Enron used to boost revenues. But should one turn up in the Philadelphia jurisdiction where Meehan represents the Department of Justice, well, he wouldn’t be sorry.“I’m not wishing that...

By Alix Stuart • April 1, 2003

Survey: Health-Insurance Crisis Looming

In case you’re still not convinced that health care is the next great corporate crisis, read on.According to a nationwide survey of 600 large and small businesses, 92 percent say they are likely to increase the amount their employees pay for health-insurance premiums next year.The study was part ...

By Stephen Taub • March 18, 2003

Who’s Buying How?

How do companies decide which IT suppliers to do business with? That depends on who’s doing the deciding — and on who’s assessing corporate practices. According to Jupiter Research, non-IT executives tend to favor companies whose products meet business requirements, while IT executives put the em...

By CFO Editorial Staff • March 17, 2003

Under Pressure

Last year, in a speech before the American Society of Corporate Secretaries, the Securities and Exchange Commission’s Cynthia Glassman took the corporate-governance group for a not-terribly-invigorating walk down Memory Lane. “The public eagerly sought stocks of companies in certain ‘glamour’ ind...

By Scott Leibs • March 17, 2003

Enron Scandal, the Sequel

Enron Corp. is in a mess of legal trouble again.Two financial executives with Enron Broadband Services were arrested Wednesday in connection with a new accounting scandal at the bankrupt energy company.The Department of Justice charged Kevin Howard, the former chief financial officer of Enron Bro...

By Stephen Taub • March 13, 2003

Dial ”M” for Malfeasance

According to a recent report by The Association of Certified Fraud Examiners, organizations lose about 6 percent of their revenue to occupational fraud and abuse. The study also noted that occupational fraud was most commonly detected by a tip from an employee, customer, vendor, or an anonymous s...

By Craig Schneider • March 12, 2003

Key-Person Insurance a Hard Sell

Andrew Morrison, CFO of American Science and Engineering Inc., passed away in August at the age of 52, a year after joining the $70 million manufacturer of X-ray detection and imaging systems. At the time of Morrison’s hiring, AS&E chief executive officer Ralph Sheridan said the CFO brought “...

By Russ Banham • March 1, 2003

Return to Sender?

Corporate targets of class-action lawsuits, such as securities-litigation or product-liability cases, have long argued that plaintiffs’ lawyers stand to gain exponentially more than the members of the class. Indeed, plenty of the money won in settlements never gets to those who have been wronged....

By Joan Urdang • March 1, 2003

The Untouchables

Whistle-blowers who report suspected violations of securities laws now have broad protections under the Sarbanes-Oxley Act of 2002 — so broad, says employment attorney Michael Nosler of Denver-based Rothgerber Johnson & Lyons LLP, that companies should treat any employee who voices a concern ...

By Tim Reason • March 1, 2003

Two Weeks in January

Resigning his post as Securities and Exchange Commission chairman on November 5 did nothing to keep Harvey Pitt from being the center of controversy. First, of course, he didn’t leave. Then, two months later, the lame-duck chairman presided over what he described as “the busiest two weeks of rule...

By Tim Reason • March 1, 2003

The Prime of Ms. Nell Minow

For most of the past 16 years, shareholder activist Nell Minow has felt like a cross between Chicken Little and the Little Red Hen. Her calls for reforming corporate governance have often been spurned by companies and ignored by shareholders. “It’s been like crying, ‘The sky is falling — and who ...

By A CFO Interview • March 1, 2003

Separate but Liable

The ability to legally separate risks and liabilities within a corporation is a cornerstone of Corporate America. Subsidiaries, limited-liability corporations (LLCs), franchisor/franchisee arrangements, joint ventures, securitizations, trusts, and other special-purpose entities (SPEs, or variable...

By Kris Frieswick • March 1, 2003

CFOs: We Plan to Hire More in Q2

Here’s a bit of good news for job-hunters seeking work in finance.The hiring of accounting and finance professionals is expected to increase very slightly in the second quarter, according to a Robert Half International quarterly survey of chief financial officers.Nine percent of CFOs said they pl...

By Stephen Taub • Feb. 14, 2003

Are These What You Call Worst Practices?

According to a major research report from consultancy The Hackett Group, most companies still have sizable weaknesses in their financial operations. This even though publicly traded companies now face increased scrutiny from government regulators.The Hackett Group survey found that most corporate...

By Stephen Taub • Feb. 13, 2003

Sarbanes-Oxley Spurs ERM

Finance chiefs at life insurance companies are responding to provisions of the Sarbanes-Oxley Act by boosting their enterprise risk management (ERM) practices, according to a new survey by Tillinghast-Towers Perrrin, the risk management consulting firm.Fifty-three percent of 30 life insurance CFO...

By David Katz • Feb. 5, 2003

Enron Creditors Sue Lay; Enron Sues Customers

Former Enron chairman and chief executive Kenneth Lay and his wife, Linda, have been sued by creditors seeking to recover more than $70 million, according to the Associated Press, citing court papers.The committee representing unsecured creditors in Enron’s Chapter 11 case filed the suit last Fri...

By Stephen Taub • Feb. 4, 2003

Cozying Up to Analysts

In an attempt to provide a more open line of communication with investors and analysts, many companies are ditching the canned presentation in favor of an informal meeting heavy on question-and-answer periods. Impromptu dialogues — sometimes called “fireside chats” — are more effective at making ...

By David Campbell • Feb. 1, 2003

White-Collar Crime? Now It’s Button-Down-Collar Crime

CFOs and senior finance executives have always wanted to be seen as crucial members of corporate management. And when it comes to fraud, it appears that some of them are.Or at least that seems to be the takeaway from an exhaustive five-year study by the Securities and Exchange Commission of enfor...

By Stephen Taub • Jan. 29, 2003

Trend: CFO to CEO

Another former finance exec has snared the top spot at a major corporation.Kmart Corp., slated to emerge from bankruptcy around April 30, surprisingly tapped president Julian Day as its new CEO. Day succeeds James Adamson, who will continue to serve as chairman through the final stages of the com...

By Stephen Taub • Jan. 21, 2003

Morgan, Insurers Settle on Enron Surety Bonds

JP Morgan Chase & Co. finally settled its dispute with a group of 11 insurance companies that had issued surety bonds for obligations guaranteeing finance deals the bank set up for Enron Corp.Under the agreement, JP Morgan Chase will receive about 60 percent of the principal amount of $965 mi...

By Stephen Taub • Jan. 3, 2003

Lost in Space

Inktomi’s eyes were bigger than its stomach. Like other presumptuous technology companies in the Bay Area, Inktomi Corp. binged on real estate in the late 1990s, signing a 15-year lease on a nearly 400,000-square-foot office complex, a $300 million commitment for a partially built edifice that it...

By Russ Banham • Jan. 1, 2003

Tag Time?

Motorists use them to cruise through highway tollbooths, marathon runners rely on them to accurately monitor race times, and they can even help reunite a lost pet with its owner. Now radio frequency identification (RFID) tags may revolutionize supply-chain operations by offering a superior way to...

By Monica Deady • Jan. 1, 2003

Report: Feds Probing Former Enron Treasurer

First, Michael Kopper. Then Andrew Fastow. Now, it appears another former Enron Corp. finance executive may be facing a criminal indictment.Ben F. Glisan Jr., the scandal-plagued energy trader’s former treasurer, was told by federal prosecutors he is under investigation for his role in Enron’s co...

By Stephen Taub • Dec. 30, 2002

Ex-Enron Execs, Banks Can Be Sued, Says Judge

The lawyers are flying lazy circles over Houston.On Friday a federal judge ruled that former Enron Corp. executives and lenders must face investor lawsuits seeking $29 billion in damages related to the energy company’s collapse. U.S. District Judge Melinda Harmon denied a motion to dismiss the cl...

By Stephen Taub • Dec. 23, 2002

All in the Family

The wife of former Enron Corp. CFO Andrew Fastow may be charged in connection with her husband’s indictment, according to the Houston Chronicle.A grand jury investigating Enron has also heard testimony in an attempt to determine Lea Fastow’s knowledge and control of the money Andrew Fastow illega...

By Stephen Taub • Dec. 20, 2002