Legislation

Congress passed sweeping corporate reform in July, and President Bush signed the Sarbanes-Oxley Act, which contains a host of measures intended to prevent corporate fraud and restore investor confidence in financial reports. While politicians heralded the event as “historic,” corporate executives...

By Joseph McCafferty • Sept. 1, 2002

Closing the Books on Arthur Andersen

When a reporter from Reuters recently called Aldo Cardoso, chief executive officer of Andersen Worldwide SC, all Cardoso had to say was, “Andersen is dead.” He refused to answer any more questions.While Andersen has been headed towards oblivion following a string of high-profile auditing scandals...

By Joseph Radigan • Aug. 30, 2002

Price of Shame? Andersen Pays $60 Million to Enron Claimants

Andersen Worldwide SC, the Swiss-based coordinating entity for Arthur Andersen’s global operations, has agreed to pay $40 million to former investors and employees of Enron Corp. and $20 million to the bankrupt energy trader’s creditors.The settlement is the first exchange of funds in $29 billion...

By Joseph Radigan • Aug. 28, 2002

Fastow: The Heat is On

By now, the heat Andrew Fastow is feeling is probably more than just the scorching temperatures that bake Houston every August.How the former Enron CFO reacts to that heat is anybody’s guess.Last week, Michael Kopper, the former managing director of Enron Global Finance, pled guilty to two counts...

By Joseph Radigan • Aug. 26, 2002

House Warming, Texas Style

The deal struck between former Enron Global Equity head Michael Kopper and the SEC is apparently providing a wealth of information to government investigators. In fact, Kopper’s cooperation will likely help the Commission and the Justice Department’s Houston-based Enron Task Force in their joint ...

By Joseph Radigan • Aug. 23, 2002

For Kopper, a Different Kind of Roll-Over

Michael Kopper, who was a close aide to former Enron CFO Andrew Fastow, pled guilty to two counts of conspiracy in U.S. District Court in Houston on Wednesday. The court documents submitted on Wednesday by the Securities and Exchange Commission and the Justice Department never cited Fastow by nam...

By Joseph Radigan • Aug. 22, 2002

Plea Kopper?

The latest reports out of Houston indicate that Michael Kopper, the former managing director of Enron Global Finance, will plead guilty to wire fraud and money-laundering charges. If true, Kopper’s plea will mark the first criminal indictment in the landmark investigation of the once-powerful ene...

By Joseph Radigan • Aug. 21, 2002

Run from Cover?

Here’s a surprise.Less than a year after the 9/11 terrorist attacks, businesses cut their liability insurance for the first time in six years. This, according to a new report by Marsh Inc.The insurance broker and risk management services firm reported that companies cut their liability insurance ...

By Stephen Taub • Aug. 2, 2002

Shareholder Activism

CFO Bud Robertson got a rude shock in April when investors at the company’s annual meeting voted down his plan to replenish Progress Software Corp.’s stock-option pool. He now faces a dilemma about how to compensate his employees, many of whom normally receive options. “We have enough options to ...

By Tim Reason • Aug. 1, 2002

Insurance

Blame the insurance cycle. After years of palatable increases and even some decreases, workers’ compensation costs are jumping up again. Fueled by an increase in underlying health-care costs and a higher number of claims–not to mention the impact of September 11–workers’ comp costs bumped up an a...

By Joan Urdang • 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

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

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

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