The Old Shell Game

Go into a casino and you have only yourself to blame if you leave with empty pockets. It’s much the same if you’re an equity investor in Asia, the U.S., or Europe.But that simple risk/reward equation goes haywire when you put your money into a subsidiary owned by some of the best-known companies ...

By Tom Leander • Dec. 10, 2001

Material Girl: SEC’s Unger Issues Report on Reg FD

SEC commissioner Laura Unger issued a detailed report examining the impact of Regulation Fair Disclosure on the marketplace.The commission adopted Reg FD in October 2000 to end the selective disclosure by issuers to analysts of material company information.“Regulation Fair Disclosure Revisited,” ...

By Stephen Taub • Dec. 7, 2001

Enron and on It Goes: More Investigations, Suits

Now the spotlight on Enron is being shined on the company’s retirement benefits. The Department of Labor has opened an investigation into questions raised by Enron’s handling of its workers’ retirement benefit plans, according to Labor Secretary Elaine Chao. Chao also announced that the departmen...

By Stephen Taub • Dec. 6, 2001

U.S. Insurers Report $3.5 Billion Enron Exposure

Where there are huge losses, there is usually scrutiny of the effects on insurance companies. And the Enron debacle is no different.But so far, it seems like the insurance industry hasn’t been hurt much by the collapse of Enron. The direct exposure of U.S. insurers’ asset portfolios to securities...

By Stephen Taub • Dec. 6, 2001

Enron Blame Game: Accountants Take the Offensive

Clearly on the defensive following the swift, spectacular collapse of Enron Corp., the accounting profession took several steps on Tuesday to try to preserve its image, trust, and integrity. In a remarkable, nearly unprecedented development, the Big Five accounting firms — Andersen, KPMG, Deloitt...

By Stephen Taub • Dec. 5, 2001

USA Network Cancels the Guidance Game

The CFO of USA Networks Inc. has found a way to break free of the dreaded earnings-expectations game with Wall Street. Along with the release of its third-quarter results on October 24, the New York- based media and commerce company disclosed its internal operating budget–yes, its entire annual p...

By Stephen Barr • Dec. 5, 2001

Question Mark to Market: Energy Accounting Scrutinized

The remarkable collapse of Enron Corp. is drawing attention to the accounting practices of other energy companies. The big concern seems to be “mark to market” accounting, which allows companies to count as current earnings profits they expect to earn in the future from energy-related contracts.T...

By Stephen Taub • Dec. 4, 2001

Pitt and the Pendulum: SEC Warns About Growing Use of Pro Forma Earnings

CFOs beware: If your pro forma financial statements make a loss look like a profit — and you don’t offer an adequate explanation for your financial sleight of hand — the statement will probably be deemed fraudulent or confusing. That was the word from Securities and Exchange Commission chairman H...

By Stephen Taub • Dec. 3, 2001

It’s Official: Everyone Looking Into Enron Fiasco

How predictable.As Enron Corp. prepared to file for bankruptcy over the weekend, the shocking debacle entered its inevitable next phase: Second-guessing, finger-pointing, and after-the-fact posturing.SEC chairman Harvey Pitt now says he too is investigating the former energy high-flier’s manageme...

By Stephen Taub • Dec. 3, 2001

Poison Pills

The use of poison pills to thwart hostile takeovers may be growing, but so is opposition by shareholder activists. In the latest skirmish, the activists won handily. Witness Navistar International, which had been at odds with investors for 10 months over its staunch refusal to rescind its poison-...

By Stephen Barr • Dec. 1, 2001

Bailout for Insurers?

It’s taking the insurance industry a few more months than the airlines. But insurers are one step closer to receiving a package of government aid to help them recover from the events of 9/11.On Thursday the House of Representatives cleared legislation that would assure that there is terrorism-ris...

By Stephen Taub • Nov. 30, 2001

SEC Names Beller New Corporate Finance Head

Alan Beller has been named the SEC’s new director of the division of corporation finance. Beller will also serve as senior counselor to the commission, a newly created position. “At this time in our history, there is an urgent need to reform our capital raising and disclosure regimes,” said the S...

By Stephen Taub • Nov. 20, 2001

Finance Executives Pro Pro Forma, Says CFO.com Poll

In a recent wire service interview, Securities and Exchange Commission chairman Harvey Pitt said the SEC has “an obligation to study” the use of pro forma earnings in corporate reports and press releases. What Chairman Pitt and the SEC are likely to learn when they commence their studying is: Not...

By John Goff • Nov. 16, 2001

Bad News? I Know, Let’s Get the CFO to Tell ’em!

When the going gets tough, the CEO gets the CFO. At least, that’s how it seems these days as more and more companies deliver bad news. Just look what happened on Tuesday.In the morning, Wal-Mart delivered pretty good sales results for the third fiscal quarter, with the retailer’s management sayin...

By Stephen Taub • Nov. 14, 2001

Moody’s Blues: Enron Paper Downgraded

On Friday, Moody’s Investors Service downgraded the senior unsecured debt ratings of Enron to Baa3 from Baa2 and the company’s rating for commercial paper to Not Prime from Prime-2. Alas, Enron’s long-term debt ratings remain under review for further downgrade. “Moody’s actions reflect the compan...

By Stephen Taub • Nov. 12, 2001

Subtract Half a Billion: Enron Admits It Overstated Earnings

Management at Enron Corp. admitted Thursday it overstated earnings for nearly five years. In an SEC filing Thursday, Enron said financial statements from 1997 through the third quarter of 2001 “should not be relied upon, and that outside businesses run by Enron officials during that period should...

By Stephen Taub • Nov. 9, 2001

Standard and Poor’s: Pro Forma a Poor Standard

Another county heard from. Responding to the growing concerns about the deterioration in the quality of earnings reports, Standard & Poor’s is expected to send a letter today to Wall Street executives laying out suggestions to create a uniform definition for operating earnings, according to T...

By Stephen Taub • Nov. 7, 2001

The Hard Sell

The bubble burst, and the recriminations came next.In the 18 months leading up to September 11, some $6 trillion in U.S. equity investments evaporated. Shares in technology and Internet companies that once traded for hundreds of dollars dipped to a few bucks, or worse. As the Dow sank, bankruptci...

By Stephen Barr • Nov. 1, 2001

What Works When Disaster Strikes

The grave new world facing companies after September 11 may make a huge difference in future technology deployments, says Donald B. Christian, a partner with PricewaterhouseCoopers LLP’s risk management practice. For example, Cantor Fitzgerald, which lost approximately 700 employees in the World ...

By Tim Reason • Nov. 1, 2001

Out of Print? Not Annual Reports

Cost cutting may be rampant throughout Corporate America, but when it comes to producing the annual report, it’s business as usual.According to an August client survey by Thomson Financial/Carson, 94 percent of respondents say they will release their 2001 annual report in both print and online fo...

By Joan Urdang • Nov. 1, 2001

Under Cover?

Much has been made of the losses insurers are taking in the wake of September’s terrorist attacks. According to some estimates, the industry could lose almost $60 billion, making them the most costly disasters ever. The previous record of $20 billion was set by Hurricane Andrew. In turn, insurers...

By Russ Banham • Nov. 1, 2001

First Pencils, Now People

The billions of dollars that companies spend each year on services has become a potent lure — or perhaps one should say lifeline — for E- procurement vendors. With their stock prices flatlining, and with companies hesitant to spend money on big- ticket software, these vendors are retooling their ...

By Scott Leibs • Nov. 1, 2001

Niche Insurance: The Needs of the Few

Move over, Lloyd’s of London. The broker, renowned for offering oddball policies such as one that compensates a company should two or more workers win the U.K. national lottery and resign, isn’t the only company offering niche coverage. These days, advanced intelligence-gathering technology and n...

By Joan Urdang • Oct. 30, 2001

FAS 133 No Big Thang, says Moody’s

Much ado about nothing.That’s Moody’s preliminary assessment of FAS 133 — the new standard for financial reporting of derivatives and hedging transactions. While many finance executives fought hard to head off the adoption of the standard because they felt that it was too costly and unnecessary, ...

By Stephen Taub • Oct. 29, 2001

Women’s CPA Group Says Attacks Were ”Extraordinary”

According to The National Executive Board of the American Woman’s Society of Certified Public Accountants (AWSCPA), the September 11 terrorist attacks qualify as an extraordinary event under the criteria of APB 30 for some businesses. It may not qualify for other businesses, however. For example,...

By Stephen Taub • Oct. 26, 2001