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

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

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

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

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

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

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

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

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

Circuit Breaker: Enron Dumps CFO Amid Conflict Questions

Enron Corp. is set to replace CFO Andrew Fastow. As CFO.com reported in a story earlier this week, Fastow’s role in a limited partnership has raised concerns about a conflict of interest. Fastow is succeeded by Jeff McMahon, who had been serving as chairman and CEO of Enron’s Industrial Markets g...

By Stephen Taub • Oct. 25, 2001

Operation Cooperation: SEC Has New Enforcement Policy

A new policy from the SEC states that the commission may not take enforcement action against a company it investigates — if the company cooperates fully with the authorities. The SEC unveiled the unprecedented policy as part of its settlement of financial-reporting fraud charges against Gisela de...

By Stephen Taub • Oct. 24, 2001

Related Party Crashers? SEC Looking Into Possible Conflict on Interest at Enron

The Securities and Exchange Commission has requested that Enron provide information regarding certain related party transactions. “We welcome this request,” said Kenneth L. Lay, Enron chairman and CEO in a prepared statement. “We will cooperate fully with the SEC.”Enron, North America’s biggest b...

By Stephen Taub • Oct. 22, 2001

Report: Enron CFO Reaped Millions from Partnership

Talk about the appearance of a conflict of interest. A limited partnership organized by Andrew Fastow, CFO at Enron Corp. since 1997, racked up millions of dollars in profits from transactions conducted with the energy company, according to The Wall Street Journal, citing an internal partnership ...

By Stephen Taub • Oct. 19, 2001

Losing My Insurance

Even before September 11, risk managers knew they’d be in for a tough time negotiating renewals on property-casualty policies. They just didn’t know how tough.The many years of soft insurance pricing and the economic downturn were enough to make for fairly certain premium hikes in the fall and wi...

By David Katz • Oct. 19, 2001

Changes to Regulation Fair Disclosure: Why Bother?

Securities and Exchange Commissioner Laura Unger says she plans to release a report on Regulation Fair Disclosure (FD) within a month, according to Reuters. The SEC rule, which requires publicly traded companies to disclose material information simultaneously to the general public and the financi...

By Stephen Taub • Oct. 18, 2001

Terrorist Aftermath: Employees Give Employers High Marks

Most workers (59 percent) say their employers are doing a great job of communicating with them and addressing concerns about the company’s business prospects in the wake of the recent terrorist attacks. Only seven percent said they’d received no communication from their employers. This is accordi...

By Stephen Taub • Oct. 17, 2001