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

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

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

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

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

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

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

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

Tearing Down the Walls

A growing number of companies are giving old office buildings and factories a green makeover. For some this comes as part of corporate social responsibility efforts while for others, legislation, such as the EU’s new Energy Performance for Buildings Directive, is the main motivation.But in today’...

By Christopher Watts • March 2, 2009

AIG Spins Off Units to Government

The government’s latest capital-lifeline plan for AIG involves the company turning two of its subsidiaries into special purpose vehicles.In effect, AIG’s American International Assurance Co. and American Life Insurance Co. will now be owned by the New York Fed — which will receive up to $26 billi...

By Sarah Johnson • March 2, 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

The Incredible Shrinking Dividend

The pace of dividend cuts by cash-hungry firms picked up, with three major companies drastically paring their payouts on Monday.The rash of cuts – by PNC Finanical Services Group Inc., HSBC, and International Paper – came on top of General Electric’s long-anticipated 68 percent reduction on Frida...

By Stephen Taub • March 2, 2009

A Prayer for the Not-Quite-Dying

For accounting firms, a crisis breeds new opportunities — for crisis management. Since October, firms such as WithumSmith & Brown, J.H. Cohn, and Wipfli have launched crisis-management or economic-recovery practices, offering to help struggling companies in areas from cash management and work...

By Kate Plourd • March 1, 2009

Obama Asks for 13 Percent SEC Budget Boost

Declaring that over the past year “the consequences of poor market oversight became abundantly clear,” President Obama asked for a 13 percent boost in the Securities and Exchange Commission’s budget over what it was in 2008 as part of the overall national budget request he issued Thursday.  For t...

By David Katz • Feb. 27, 2009

S&P Less Sure of Life Insurance Industry

Standard & Poor’s cut its counterparty credit and financial strength ratings for 10 groups of U.S. life insurers and counterparty credit ratings on seven life insurance holding companies.The agency also placed two groups of U.S. life insurers, one of which was downgraded, on CreditWatch with ...

By Stephen Taub • Feb. 27, 2009

General Re Settles with Ohio over AIG Case

General Reinsurance Corp. agreed to pay $72 million to settle investors’ claims, according to Ohio Attorney General Richard Cordray.The lawsuit stemmed from transactions between General Re, a subsidiary of the Warren Buffett-controlled Berkshire Hathaway Inc., and American International Group, th...

By Stephen Taub • Feb. 26, 2009

A Ghoulish Prospect

In a classic horror film, “Night of the Living Dead,” a terrified group of people barricade themselves in a rural farmhouse to escape hordes of flesh-eating zombies. Today Americans are gripped by a similar fear, but this time the walking corpses in their nightmares are banks, tearing insatiably ...

By Economist Staff • Feb. 26, 2009

Cheered by Obama Talk, CFOs Still Fret Lack of Detail

The uplifting tone of President Obama’s speech to Congress Tuesday night impressed the half-dozen finance executives that CFO.com interviewed on the subject today. But they were also concerned by the president’s vagueness about the steps being planned by the government to help restore the economi...

By Sarah Johnson and Kate Plourd • Feb. 25, 2009

A Brighter Future, but Who Pays?

As a new president, Barack Obama’s first speech to Congress was not, officially, a state-of-the-union address. That was just as well: its current state is awfully precarious. On Tuesday February 24th, a few hours before he spoke to the Senate and House of Representatives, a survey reported that c...

By Economist Staff • Feb. 25, 2009

Lawmakers of Both Parties Quick to Praise Speech

Democrats and Republicans on Capitol Hill struck bipartisan notes of praise for President Barack Obama’s first address to Congress – although with clearly different levels of enthusiasm for the specifics of Obama’s speech.Democrats described themselves as “euphoric” while Republicans praised the ...

By Roll Call Staff • Feb. 25, 2009