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

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

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

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

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

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

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

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 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

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

Bankrupt Delphi Told It Can Cancel Retiree Benefits

Delphi Corp received bankruptcy court permission to cancel benefits for 15,000 retirees, which would enable the bankrupt auto parts maker to save more than $70 million annually.As a result, according to a report on the court proceedings in the Detroit News, on April 1 Delphi could cancel salaried...

By Stephen Taub • Feb. 24, 2009

Bernanke: U.S. Action Could End Recession in 2009

Federal Reserve chairman Ben Bernanke believes there is “a reasonable prospect” that federal government success in restoring financial stability could bring about an end to the recession this year, so that “2010 will be a year of recovery.” In testimony before the Senate Banking Committee on Tues...

By Roy Harris • Feb. 24, 2009

CNA Sues Its Ex-CFO over Stock Loan

CNA Financial Corp. is suing its former chief financial officer over a loan that it allegedly made to him, but that the big insurer says he refuses to repay.Peter E. Jokiel, who left CNA in 2001, is alleged in the suit to owe the company more than $2.8 million from a loan he took out 10 years ago...

By Stephen Taub • Feb. 23, 2009

New SEC Enforcer Was a Bank Lawyer, Prosecutor

The Securities and Exchange Commission named as its director of enforcement Robert Khuzami, a former bank lawyer who, on behalf of his company, lobbied for easing regulations related to “complex structured-finance transactions.”The 52-year-old Khuzami, also has a long record as a tough federal pr...

By Marie Leone • Feb. 19, 2009

Can’t Pay or Won’t Pay?

No part of the financial crisis has received so much attention, with so little to show for it, as the tidal wave of home foreclosures sweeping over America. Government programmes have been ineffectual, and private efforts not much better. Now it is Barack Obama’s turn. On Wednesday February 18th ...

By Economist Staff • Feb. 19, 2009

Eastern Leaders Ask for Help from the Eurozone

Politicians from central and eastern European countries are calling for greater help — and understanding — from the eurozone for their struggling economies.Mikolaj Dowgielewicz, Poland’s minister for Europe, said that while members of the eurozone were being allowed to depart from the rules of th...

By European Voice Staff • Feb. 19, 2009

It’s Easy Not Being Green

The majority of companies that are about to get hit with environmental sanctions ignore the Securities and Exchange Commission’s requirement that they disclose that liability to investors, according to a University of Arkansas researcher.In one of the SEC’s rare bright-line materiality guidelines...

By Sarah Johnson • Feb. 18, 2009

Fed Sees Economic Slide, Moving Target for Stimulus

The Federal Reserve is ratcheting up its projection for U.S. economic deterioration this year, now seeing an unemployment rate of between 8.5 and 8.8 percent by year-end, rather than the projections three months ago of 7.1 to 7.6 percent. The Fed also now sees a contraction of the overall U.S. ec...

By Roy Harris • Feb. 18, 2009

SEC Gets Ounce of Flesh from RIM Execs

The Securities and Exchange Commission today charged BlackBerry maker Research in Motion and four senior executives, including two finance officers, with stock-option backdating. At the same time, the SEC announced that the charges have been settled.The accused individuals include Dennis Kavelman...

By David McCann • Feb. 17, 2009

Dividends Are Deemed Expendable

A growing number of companies are slashing their dividends to preserve cash. Many have had a long tradition of providing the payouts, which had enabled them to attract conservative, loyal buy-and-hold investors.For example, The Dow Chemical Co., which has paid shareholders cash dividends every qu...

By Stephen Taub • Feb. 13, 2009

SEC Should Adopt CIA Methods, Lawyers Say

The recent fiery criticism leveled by U.S. Representatives and Senators at the Securities and Exchange Commission for allegedly dropping the ball on investigating Bernard Madoff and mishandling the financial crisis has prompted lawyers to dream big dreams about boosting SEC prosecutions of corpor...

By David Katz • Feb. 13, 2009

The Cost of Auditor Independence

Hiring a public accounting firm to provide both internal and external audits, a practice that was banned by the Sarbanes-Oxley Act, actually reduced companies’ accounting risk, researchers claim.The knowledge of a company that an external auditor gained from internal auditing lowered the chances ...

By Sarah Johnson • Feb. 12, 2009

FBI: 530 Corporate Fraud Probes in Progress

The long prison terms handed out to high-profile fraud perpetrators at Enron, WorldCom, Tyco, and others this decade apparently haven’t had much of a deterrent effect.The FBI has more than 530 open corporate fraud investigations, including 38 directly related to the current crisis, deputy directo...

By Stephen Taub • Feb. 11, 2009

A COO for the SEC?

The United States Chamber of Commerce, never an enthusiastic supporter of government regulation of business, today advised that the Securities and Exchange Commission should make vast changes in its management structure.Seven of 23 recommendations in the chamber’s report on the commission’s effic...

By Kate Plourd • Feb. 11, 2009