Barroso Spies “Light at the End of the Tunnel”

The president of the European Commission, José Manuel Barroso, has said he sees “light at the end of the tunnel” following the massive, co-ordinated rescue packages offered by EU and other governments in a bid to restore confidence in the world’s financial system. “We have created nothing less th...

By European Voice Staff • Oct. 15, 2008

Two Take Pills; Don’t Call Them in the Morning

At least two more companies — Cleveland-Cliffs Inc. and Mariner Energy Inc. — this week said their boards approved shareholder-rights plans, in a sign that the global selloff in stocks has companies feeling undervalued and vulnerable to a hostile bidders.Cleveland-Cliffs, which said it would off...

By Stephen Taub • Oct. 14, 2008

Verdict Against KPMG Could Lead to $41M Payment

Clarification:In an earlier version of this story, the amount of the jury award against KPMG was given as “more than $41 million,” although the actual dollar amount cited by the jury was $31.8 million. The $41-million-plus figure reflects interest on that amount. The original headline also incorr...

By Roy Harris and Stephen Taub • Oct. 14, 2008

Katy Bar the Filing Costs

Katy Industries is orchestrating an intriguing two-step process with the ultimate goal of de-registering its shares.The company, which makes industrial and home-consumer cleaning products, including Brillo, said its plan will reduce costs by eliminating SEC reporting requirements and Sarbanes-Oxl...

By Stephen Taub • Oct. 13, 2008

TARP Priority

THE signing into law of America’s $700 billion bailout was never likely to save the financial system. In the event, it did not even come close. The Troubled Asset Relief Programme (TARP) could still do some good but to maximise its effectiveness, the Treasury will almost certainly have to stray f...

By Economist Staff • Oct. 13, 2008

Ex-Duane Reade Execs Charged with Fraud

The Securities and Exchange Commission charged a former CEO and a one-time CFO of drug store chain Duane Reade with fraud, saying they orchestrated elaborate multimillion-dollar accounting schemes that led the company to inflate earnings.Filed in federal court in Manhattan, the center of the metr...

By Roy Harris • Oct. 9, 2008

Reporting in Real Time, All the Time?

A slippery slope appeared during the Wednesday meeting discussing the Securities and Exchange Commission’s 21st Century Disclosure Initiative. What if companies had to be filing financial information all the time? The initiative, announced last June, is intended to modernize the disclosure system...

By Alan Rappeport • Oct. 8, 2008

Revenue Scheme to Win Financing Is Charged

The former CFO and former CEO of small, privately-held software company Entellium Corp, were charged with wire fraud for overstating revenue to help them secure financing.Parrish L. Jones, Seattle-based Entellium’s former chief financial officer, and former chief executive officer Paul Thomas Joh...

By Stephen Taub • Oct. 8, 2008

On Defensive, SEC Touts Reporting Plan

The Securities and Exchange Commission suggested during a meeting today that had its plans for a new financial reporting system been implemented earlier, they could have provided more transparency during the financial market meltdown. Launched in June, the project involves changing the way compan...

By Sarah Johnson • Oct. 8, 2008

Mission Impossible?

With bad news continuing to pour out of the banking sector, it takes a brave person like Tom Hill to want to take charge of a bank’s financial communications. Hill recently stepped down after three years as UBS’s chief communication officer. But there’s a twist. As before, Hill’s replacement as C...

By Tim Burke • Oct. 8, 2008

SEC: Small Insider Trades Get Caught, Too

A former vice president of treasury at Restoration Hardware settled Securities and Exchange Commission civil insider-trading charges that he tipped three friends to the company’s pending acquisition, the SEC said.The friends made more than $900,000 in unlawful profits after public announcement of...

By Stephen Taub • Oct. 7, 2008

Insurance: Hartford Sells Allianz a $2.5B Stake

The Hartford Financial Services Group is receiving a $2.5-billion capital investment from German insurer Allianz SE. The Hartford also is cutting its quarterly dividend by 40 percent, to 32 cents a share. The moves, announced by The Hartford this week, will allow the company to finish the year wi...

By Alan Rappeport • Oct. 7, 2008

Changing the Rules

AT THE best of times, economic regulation does not lend itself to close examination in election campaigns. Regulation, like economics itself, is about trade-offs and judgment, whereas candidates need to put things in black and white.That is even more so in this election, when Barack Obama and Joh...

By Economist Staff • Oct. 6, 2008

Pay Attention

When it comes to penny-pinching, slashing dividends is a dramatic move for a listed company. But recently a string of firms — from big banks down to pub companies — have hit shareholders in the pocket by doing just that.At Redrow, a £650m (€817m) UK housebuilder, the reasons for cancelling a full...

By Tim Burke • Oct. 6, 2008

Eight Years Later, Ex-CFO Sentenced

The former CFO of Network Associates Inc. — now called McAfee Inc. — was sentenced to a year and a day in federal prison for his role in a scheme to falsify financial statements, The San Francisco Chronicle reported. Prabhat Goyal must also pay a $200,000 fine, according to the paper.In December ...

By Stephen Taub • Oct. 3, 2008

AIG Tries to Hang on to Corporate Insurance Buyers

AIG, which by September 30 had drawn down $61 billion of the $85 billion credit facility provided by the U.S. Federal Reserve two weeks earlier, is seeking to strengthen itself by selling off some of its subsidiaries. The company intends to make itself look good enough to avoid a flight by corpor...

By David Katz • Oct. 3, 2008

SEC Extends Buyback Safe Harbor

When the Securities and Exchange Commission issued restrictions on short selling on September 18, it also modified rules related to stock repurchases, something that affects corporate issuers directly. However, at the time, the short-selling announcement grabbed the headlines, and the buyback pro...

By Stephen Taub • Oct. 2, 2008

The Jury’s Out

Last January, Apollo Group, owner of the University of Phoenix, learned a hard lesson about the risk of going to trial when a jury ordered it to pay shareholders up to $278 million in a securities class-action case. But the company enjoyed a reversal of fortune in August, when the judge who overs...

By Alix Stuart • Oct. 1, 2008

No Money-Saver

Last year was the first in which companies could legally dispense with printing and mailing proxies to their shareholders and put everything online, potentially saving millions of dollars in time and money. Did that option live up to its promise? First the good news: shareholders raised minimal f...

By Alix Stuart • Oct. 1, 2008

White House Works to Pass Senate Bill

The White House expressed its full support today for the Senate financial bailout bill to be voted on tonight, asserting that support in Congress for the plan is growing amid changes to the legislation and constituents’ complaints about the House’s failure to approve the plan.White House Deputy P...

By Roll Call Staff • Oct. 1, 2008

Europe Eyes Sweeping Bank Regulation Changes

In response to “the current meltdown of the financial system,” the European Commission proposed a series of rules to tighten the regulation of banks within the European Union today. Most notably, the commission wants sellers of securitised products to retain a material stake in these creations, w...

By Jason Karaian • Oct. 1, 2008

Reid: Senate Will Vote on Bailout

One day after the House voted down the financial rescue plan, Senate Majority Leader Harry Reid (D-Nev.) pledged to have a vote on a bailout proposal in the near future. Reid on Tuesday did not say when the Senate would move to the bailout bill or what it might look like in order to attract more ...

By Roll Call Staff • Sept. 30, 2008

Into the Land of the Unknown

HOW many votes in Congress will the latest financial upheaval change? That is the calculus underway in Washington, D.C., after the House of Representatives defeated the proposed $700 billion mortgage-rescue plan by 228 to 205 on Monday September 29th. Democrats backed it by 140 votes to 95, while...

By Economist Staff • Sept. 30, 2008

Studies: Bailout Backers Got More Bank Donations

In the wake of the defeat handed the Bush administration’s $700 billion financial rescue plan by the House on Monday, two groups issued reports suggesting that the receipt of corporate political contributions may have influenced lawmakers’ votes.The reports from two nonpartisan organizations that...

By Kate Plourd • Sept. 30, 2008

Securities Group Gets Off the Sidelines

Wall Street lobbyists have been largely silent this week as Congressional leaders huddled behind closed doors to hammer out the historic bailout package. Now, with the House vote on the measure about an hour away, one of the financial service industry’s heaviest-hitting groups is asking its membe...

By Roll Call Staff • Sept. 29, 2008