Frank Calls for Government Takeover of AIG

House Financial Services Chairman Barney Frank (D-Mass.) called for the government to formally take control of American International Group and sue employees who received bonuses.Frank said it’s “time for us to take over the company.”Although taxpayers have an 80 percent stake in the firm, Frank ...

By Roll Call Staff • March 17, 2009

Sound and Fury over AIG

The revelation that $165 million in bonuses have been paid by AIG, a giant insurance company bailed out with roughly $170 billion of taxpayers’ money after it came close to collapse last year, has turned into a political drama for Barack Obama. The latest payments are in addition to $55 million p...

By Economist Staff • March 17, 2009

Despite Pressures, Fewer Firms File Late

At least 121 large companies have missed the deadline for filing their 2008 annual reports, a decline from 184 missed deadlines at the same period of the 2007 filing year, and 250 for the 2006 year, says the corporate-governance research firm Glass Lewis & Co..Today — March 17 — is the deadli...

By Stephen Taub • March 17, 2009

PCAOB Seeks 3.7 Percent Support Fee Hike

The Public Company Accounting Oversight Board is seeking permission from the Securities and Exchange Commission to raise the 2009 PCAOB accounting support fee by 3.7 percent, from $151.8 million to $157.4 million.The move would increase the PCAOB’s previously established 2009 accounting support f...

By Stephen Taub • March 17, 2009

AIG Firestorm Burns Up Hill

Outrage over bailed-out insurer American International Group paying millions of dollars in bonuses reached a full bipartisan boil on Capitol Hill on Monday, with Members calling for all manner of reprisals — from firing the company’s executives and yanking government aid from the firm to pushing ...

By Roll Call Staff • March 17, 2009

SEC Nails Down Backdating, Fraud Cases

Stock-option backdating is back in the news, with Quest Software, a midcap provider of point-of-sale systems, settling civil charges by the Securities and Exchange Commission. The SEC also settled a fraud case against MedQuist Inc., a small-cap medical-transcription company.The SEC charged that Q...

By Stephen Taub • March 13, 2009

Pursued by Obamabears

Barack Obama has modelled his early days on those of Franklin Roosevelt, the last president to take office during a serious economic crisis. But by one benchmark he is failing. At market close on March 11th, despite a rally this week, the Dow Jones Industrial Average was 16 percent below its leve...

By Economist Staff • March 12, 2009

GM: Keep Your $2 Billion, Uncle Sam

General Motors indicated that its financial situation is not as dire as earlier thought, with executive vice president and CFO Ray G. Young saying that the struggling auto maker “at this time” would not need the $2 billion in government money that GM previously requested for March.The company cit...

By Stephen Taub • March 12, 2009

Class-action Values Plunging, but Not for Long

Both the number of federal securities class action settlements and their avergage value fell in 2008 — with the dollar amount plunging 50 percent, in fact. But the declines probably will be short-lived, the latest annual report by Cornerstone Research forecasts.Cornerstone, which said that the nu...

By Stephen Taub and Roy Harris • March 11, 2009

One Crunch after Another

Calls for coordinated fiscal stimulus to lift the world out of recession were joined at the weekend by Larry Summers, Barack Obama’s top economic adviser. Such coordination has been absent up to now, though that could change at the meeting of G20 leaders in London in early April. But there has be...

By Economist Staff • March 11, 2009

Eurozone Says No to Fresh Stimulus

Eurozone finance ministers yesterday rejected calls for increased economic stimulus measures, despite a worsening outlook for the EU economy. They also rejected any easing of the requirements for joining the eurozone.Speaking after a meeting of the Eurogroup, which brings together the finance min...

By European Voice Staff • March 11, 2009

Shielding Yourself Against Fraud

(Click here to view video of this and all other available presentations from the latest CFO Rising conference.)Inside corporations, the financial crisis has sparked a renewed interest in the talents of CFOs, who are expected to come up with ways to simultaneously cut costs and offer growth plans ...

By Sarah Johnson • March 11, 2009

Sympathy for Fair Value Critics

Securities and Exchange Commission chairman Mary Schapiro told the House Subcommittee on Financial Services and General Government that she supports changes to the mark-to-market rule, but opposes scrapping it altogether.In a wide-ranging talk to on Capitol Hill — one that included a plea for mor...

By Stephen Taub • March 11, 2009

Sanmina Puts Backdating Woes Behind It

Sanmina-SCI Corp. settled federal and state litigation from 2006 that stemmed from some of its stock-option grant practices. Under the deal, certain options and cash payments will be repriced and cancelled, resulting in a $16.5 million benefit to the electronics contract manufacturer.In addition,...

By Stephen Taub • March 10, 2009

Shiller to CFOs: Quick Action Needed to Avert “D-word”

Restoring confidence — which means getting business leaders to take risks predicated on the assumption that good times lie ahead — is the fundamental problem of the U.S. economy, according to Yale economist Robert J. Shiller. And it doesn’t appear that we have struck on the solutions to achieve i...

By Vincent Ryan • March 9, 2009

Reports of Small-time Crime March On

Even in a time of large-scale financial wrongdoing, allegations of smaller-scale crimes march on.Two peculiar cases showed up in press reports from the Midwest and West Coast over the weekend. One, in San Marcos, Calif., involved charges of embezzlement by a financial executive alleged to have us...

By Stephen Taub • March 9, 2009

Whom the Cap Fits

America’s hard-nosed politicians are not always moved by lofty rhetoric, but talk about money normally gets them going. That, at any rate, must be what Barack Obama is assuming, judging by the approach to climate change outlined in his ten-year budget plan.Throughout his campaign for the presiden...

By Economist Staff • March 9, 2009

No bailout for Europe’s carmakers

The European Union’s industry ministers have promised to speed up access to finance for Europe’s troubled car industry, but reaffirmed that there would be no bailout to help the industry through the slump.“The main responsibility is for the automotive sector itself. It has to shoulder this respon...

By European Voice Staff • March 6, 2009

AIG Insurance CFO: We’re Not Like Papa

Like the child of a convict, the property-casualty insurance business of American International Group is struggling to distinguish itself from its embarrassing parent.Trying to assure corporate policyholders that there’s more than enough capital to cover their claims, Robert Schimek, CFO of AIG’s...

By David Katz • March 6, 2009

Wishful, and Dangerous, Thinking

A president’s first budget proposal is more than a set of figures. It is also an outline of his philosophy of government. The plan Barack Obama delivered on February 26th envisages an ambitious and costly expansion of the government’s role in the lives of Americans. Its centrepiece is a big expan...

By Economist Staff • March 6, 2009

The View from West Virginia

His bedside manner would unnerve the most stoical of patients. In the past eight years, says Barack Obama, health-insurance premiums have grown four times faster than wages. Every year a million Americans lose their coverage. The crushing cost of health care causes a bankruptcy every 30 seconds, ...

By Economist Staff • March 6, 2009

Three Krispy Kreme Ex-Execs Settle SEC Charges

Krispy Kreme Doughnuts Inc.’s former CEO and two former CFOs settled Securities and Exchange Commission charges that the three were instrumental in inflating earnings of the then-fast-growing restaurant chain in an alleged scheme designed to boost their compensation.The three —ex-chairman, presid...

By Stephen Taub • March 5, 2009

House GOP Alters Strategy; Now Attacking Obama

House Republicans have been lining up one after the other this week to attack President Barack Obama and his budget, a clear shift from their previous strategy of directing their fire squarely at Speaker Nancy Pelosi (D-Calif.) and Congressional Democrats.At a closed-door meeting of the House Rep...

By Roll Call Staff • March 4, 2009

In a State

At each lurch downwards in the financial crisis, American International Group (AIG) has played an infamous starring role. Yet again, as the Dow Jones Industrial Average closed below 6,800 on Monday March 2nd, its lowest level in almost 12 years the company deemed to be too big to fail has proven ...

By Economist Staff • March 3, 2009

Insurance Woes Touch Hartford, Conseco

It has been a day of blows for big insurers. A.M. Best downgraded a number of Hartford Financial Services Group Inc. ratings. And Conseco Inc. said its accounting firm informed it that the latest year’s audit opinion will include a question about the company’s ability to continue as a going conce...

By Stephen Taub • March 2, 2009