Securities Litigation

On July 2, pharmaceuticals giant Merck & Co. was hit with a class-action securities lawsuit filed by Milberg Weiss Bershad Hynes & Lerach LLP, one of the most notorious class-action securities law firms. The suit marks a huge departure from the typical targets of securities suits: technol...

By Joseph McCafferty • Aug. 1, 2002

The Fear of All Sums

There’s no telling exactly what will dispel the crisis of confidence dogging the markets for corporate equity and debt. The crisis only deepened in June when WorldCom, the former high-flying telecommunications company, disclosed that it had overstated its cash flow for the previous five quarters ...

By Ronald Fink • Aug. 1, 2002

Fastow May be Indicted Soon, Says Story

Is former Enron Corp. CFO Andrew Fastow about to be indicted?According to a report by Bloomberg over the weekend, the Justice Department could file formal criminal charges against Fastow in the next few weeks. That would make Fastow the first Enron executive to be charged in connection with accou...

By Stephen Taub • July 29, 2002

House, Senate Strike Deal on Corporate Accountability Legislation

House and Senate conferees announced Wednesday a deal on corporate accountability, with the much-politicized legislation likely to gain full Congressional approval and reach President Bush’s desk by week’s end.Conferees announced the agreement early in the day and planned to meet formally later i...

By Erin P. Billings • July 24, 2002

Going Bust Not the Same All Over

When Vancouver-based 360Networks Inc. faced insolvency and opted for bankruptcy protection in June 2001, CFO Vanessa Wittman quickly realized that not all workouts are created equal. The filing, for example, caused the company to shut down fledgling operations in Asia and triggered liquidations o...

By Kris Frieswick • July 22, 2002

Not That There’s Anything Wrong With It

There were no clear winners yesterday. Not at Major League Baseball’s All-Star game, which ended in a 7-7 tie, nor on Wall Street, where President Bush, gave a speech on corporate responsibility. The chief executive’s speech, while choked full of specifics, was met with a muted response by the 1,...

By Marie Leone • July 10, 2002

SEC Enforcement

Companies trying to learn lessons from the current spate of Securities and Exchange Commission accounting probes may have a difficult time doing so, because most enforcement cases are settled with no admission or denial of wrongdoing.“Companies and individuals will often settle even when a case i...

By Alix Stuart • July 1, 2002

Investor Relations

Eager to soothe jittery investors, companies bulked up their annual reports this year with additional disclosures. Now, many CFOs are looking beyond the annual report for additional ways to convince shareholders that their accounting practices are on the up and up. General Electric, for example, ...

By Tim Reason • July 1, 2002

Pension Law

In a landmark decision, the U.S. Court of Appeals ruled that participants and beneficiaries can’t sue the sponsor of an overfunded defined benefit plan, even if the plan’s trustees breached their fiduciary duties by making bad investments.The decision could be far-reaching. Forty-eight percent of...

By Joan Urdang • June 28, 2002

Jury Verdict Could Close Andersen by Aug. 31

Regulators won’t have Arthur Andersen to kick around anymore.Management at the Big Five accounting firm acknowledged that its conviction this weekend on an obstruction of justice charge would effectively end the firm’s audit practice. After a week of deliberation, a Houston jury brought back a gu...

By Stephen Taub • June 17, 2002

SEC: Signature Should Mean Something

The stakes could soon be raised substantially for chief executive and chief financial officers when they sign off on their companies’ books.The Securities and Exchange Commission on June 13 proposed rules that would hold a company’s CEO and CFO responsible for certifying the contents of their com...

By Stephen Taub • June 13, 2002

Court Rules against Disabled

The U.S. Supreme Court has given employers the leeway, under the Americans with Disabilities Act (ADA), to refuse to hire or promote disabled workers if the company concerned that the job threatens the employee’s health or safety.The High Court overturned a lower court ruling regarding a refinery...

By Stephen Taub • June 11, 2002

Not Insulated from Risk

A common joke among moviegoers in the 1920s was to insist that “asbestos” — the word printed in large letters on the theaters’ fireproof curtains–was Latin for “welcome.”For many companies, however, asbestos just means curtains.That’s no joke. Asbestos litigation has driven more than 50 U.S. comp...

By Tim Reason • June 3, 2002

Rise in Nonfinancial Reports

It’s not always about the numbers.According to a survey released by Big Five accounting firm KPMG, more companies are publishing reports on their environmental, social, and sustainability performance—and an increasing number are having these reports independently verified.To be exact, 45 percent ...

By Stephen Taub • June 3, 2002

Corporations Supersize Annual Reports

Talk about putting a new face on financials. General Electric Co.’s 2001 annual report contains no fewer than 84 pictures of people’s faces, most of them employees. IBM’s annual report has 46 — plus snapshots of 16 eclectically shod pairs of feet. “It kind of opens up the company in a way if peop...

By Tim Reason • June 1, 2002

Shareholder Activism

Nine days before Aetna’s annual meeting in April, institutional shareholders of the troubled insurance company were invited to attend or call in to an unusual conference in New York, where Providence Capital president Bert Denton urged them to elect a maverick director–handpicked by Providence–to...

By Tim Reason • June 1, 2002

Houston, We Have a Problem, Too

It almost sounds like a scene from Groundhog Day.Yesterday, management at another Houston-based energy company admitted it inflated revenues—and then saw its share price plummet on the news.Reliant Resources Inc., which provides electricity and energy services to wholesale and retail customers, a...

By Stephen Taub • May 14, 2002

First Auditor Independence, Now Auditor Insurance

An insurance crisis is developing for the major accounting firms.Frightened by the nightmare of unlimited liability evoked by Andersen’s role as Enron’s auditor, insurers are refusing to provide coverage to other accounting firms, insists Jim Copeland, chief executive officer of Deloitte & To...

By Stephen Taub • May 10, 2002

Go West?

Despite rolling blackouts, annual water shortages, and the occasional 7.2 earthquake, California is, apparently, the best state to do business.The Golden State’s cities took 6 of the 10 top spots—and 10 of the 25 highest positions—in the annual Forbes/Milken Institute study of the best places to ...

By Stephen Taub • May 10, 2002

Near the Corner of Church and State

Is Corporate America’s cozy relationship with Wall Street’s sell-side analysts about to come to an end?Possibly. As CFO.com reported in late April, New York State attorney general Eliot Spitzer’s investigation into conflicts of interest at Merrill Lynch is apparently wrapping up. Reportedly, mana...

By Stephen Taub • May 9, 2002

The Needs of the Many

What are the most critical technology needs of finance managers?Not necessarily what you’d think. In the 12th annual Top Technologies list released by the American Institute of Certified Public Accountants (AICPA), respondents rated business and financial applications as their top tech priority. ...

By Stephen Taub • May 8, 2002

Web Spinners

Last December wasn’t the most popular month for an IPO. Still, the time was right for Hong Kong-based Eco-Teck Holdings. The environmental equipment maker went public with a US$6.3 million share offering on Hong Kong’s Growth Enterprise Market on December 5 and did so successfully — thanks in par...

By Yasmin Ghahremani • May 8, 2002

Setting Standards for the Standards-Setter?

Is the Financial Accounting Standards Board’s independence in jeopardy?Congress is mulling a bill that would require FASB to meet certain conditions by the Treasury Department and Congress to continue to receive its funding, according to Reuters, citing a discussion draft. FASB, which is mostly s...

By Stephen Taub • May 2, 2002

Proposed: NTSB for Corporate Crashes

The top executive at Big Five accounting firm Deloitte & Touche has called for a number of reforms to improve the capital markets and the auditing profession.“Today, we stand at a crossroads for the U.S. capital markets. As a result of events at Enron and Andersen, we have what we hope is a o...

By Stephen Taub • May 1, 2002

Shakeup at the SEC Corral

The recent reassignment of a top Securities and Exchange Commission official has some SEC insiders wondering if the commission is putting a muzzle on its own members. And it seems one lawmaker may have similar questions about the abrupt transfer of former divisional chief accountant Robert Bayles...

By CFO Asia Staff • May 1, 2002