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

Crime and Punishment

Arthur Andersen LLP’s punishment will hardly matter if it is found guilty in its obstruction of justice trial, scheduled to begin this month. A guilty verdict would deny Andersen, already hemorrhaging clients, the right to audit public companies, easily the final nail in its coffin.But experts sa...

By Tim Reason • May 1, 2002

Asbestos Litigation

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 today, however, asbestos just means curtains.That’s no joke. Asbestos litigation has driven more than 50 U.S. ...

By Tim Reason • 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

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

Incredible Shrinking Assets

If ever there was a company that didn’t have its numbers tied down, it’s Enron.In October, the company was forced to restate revenues by more than $600 million. That unexpected rejiggering eventually forced the once-powerful energy trader into Chapter 11. Now, in the middle of a massive restructu...

By Stephen Taub • April 23, 2002

Bad Boy Scouts: Companies Unprepared for Big Hits

Is your company prepared for a disruption to its major source of earnings? If not, you’re not alone.More than 50 percent of finance executives say their companies are not well prepared for an interruption to their businesses. And around 25 percent concede their contingency plans are not adequate....

By Stephen Taub • April 22, 2002

Companies Not Prepared for Interruptions, Say CFOs

Is your company prepared for a disruption to its major source of earnings? If not, you’re not alone.More than 50 percent of finance executives say their companies are not well prepared for an interruption to their businesses. And around 25 percent concede their contingency plans are not adequate....

By Stephen Taub • April 22, 2002

Reversal Of Fortune: Terror Risk Comes Home

More than seven months after the September attacks on U.S. soil, finance executives still fear domestic terrorism attacks.In fact, about two-thirds of chief financial officers in the U.S. believe their companies’ domestic assets are more of a target than their assets overseas, according to a rece...

By Stephen Taub • April 16, 2002

Going Belly-Up Going Down

About 200 companies will file for bankruptcy in 2002. Half of those will be in the manufacturing sector.At least those are some of the conclusions of a new study conducted by PricewaterhouseCoopers. According to the forecast, the bulk of public-company bankruptcies will come from the telecommunic...

By Stephen Taub • April 10, 2002

Enron Auditor Will Cooperate with Investigators, Say Reports

David Duncan, the former Arthur Andersen partner who was Enron Corp.’s lead auditor, has reportedly agreed to plead guilty to obstructing justice and will cooperate with the government’s investigation.By agreeing to the deal, Duncan will avoid more serious criminal liability, according to publish...

By Stephen Taub • April 9, 2002

KeySpan Under the Gun

KeySpan CFO Gerald Luterman and two other executives are being investigated by the Securities & Exchange Commission and the U.S. Attorney’s Office for possible illegal insider trading violations.On March 5, the SEC issued a formal order of investigation of the trading activity of a number of ...

By Stephen Taub • April 8, 2002

New Reality: Less for More

You know the one about the guy who went to a local diner and then complained, “The food was terrible, and there was so little of it”? The same could be said of directors’ and officers’ liability insurance.“It’s a whole different animal right now,” says Wayne Salen, director of risk management for...

By Kris Frieswick • April 1, 2002

Southern Discomfort

If a recent court case in Georgia serves as precedent elsewhere, it could lower the bar on seeking damages based on what company insiders are expected to know and, as a result, pull more third-party auditors into lawsuits.In January, the Georgia Court of Appeals reinstated a $44 million verdict a...

By Marie Leone • April 1, 2002

After the Fall

Many observers complain that the financial reforms proposed so far by Congress, the Securities and Exchange Commission, and other government bodies in the wake of Enron Corp.’s collapse are a case of too little, too late. That’s clearly so for Enron’s shareholders and employees. But critics also ...

By A CFO Interview • April 1, 2002

Andersen Assembling Transition Team

The Paul Volcker regime is under way at Andersen.The former Federal Reserve chairman, brought in to save the embattled auditor, named two senior Andersen partners to lead the firm’s transition. The two executives: C.E. Andrews, head of the firm’s worldwide audit practice, and Larry Rieger, anothe...

By Stephen Taub • April 1, 2002

D&O Insurers Offer Less for More

You know the one about the guy who went to a local diner and then complained, “The food was terrible, and there was so little of it”? The same could be said of directors’ and officers’ liability insurance.“It’s a whole different animal right now,” says Wayne Salen, director of risk management for...

By Kris Frieswick • April 1, 2002

Say It Ain’t So, Joe: Berardino Out at AA

You knew somebody at Andersen would fall on their sword.Turns out, it was CEO Joe Berardino. Late Tuesday, he resigned as managing partner and chief executive at Andersen Worldwide. Berardino had served a little more than a year on the job at the global professional services company.Berardino, 52...

By Stephen Taub • March 27, 2002