Ex-CFO Snubbed in Whistle-blower Case

The CFO who became the first person to win protection under Sarbanes-Oxley’s whistle-blower provision suffered yet another setback in his rocky battle to win back his job.A three-judge panel of the 4th Circuit Court of Appeals refused to reinstate David Welch as chief financial officer of Cardina...

By Stephen Taub • Aug. 6, 2008

Ex-Controller Guilty of Credit Card Embezzlement

The former controller of Emmis Communications Corp. pled guilty to embezzling more than $70,000 from the media company — money she allegedly transferred in unauthorized payments to her corporate credit card account.Sylvia York, whose pleas were to wire fraud charges, agreed to pay back the money,...

By Stephen Taub • Aug. 6, 2008

Pru Settles “Sham” Finite Insurance Case

Prudential Financial Inc. settled Securities and Exchange Commission civil charges that Prudential improperly reported over $200 million in income as the result of “sham” finite reinsurance contracts. Without admitting or denying the commission’s allegations, Prudential agreed to settle the charg...

By Stephen Taub • Aug. 6, 2008

D&O Insurance Rates Dip, after Plunge

Premiums for directors’ and officers’ insurance fell moderately in the second quarter, after dropping sharply the quarter before, according to a new industry survey.The slide in premium has come despite a rise in claims related to the subprime mortgage crisis. The claims, however, remained largel...

By Alan Rappeport • Aug. 5, 2008

U. of Phoenix Case Rises from Loss

Apollo Group Inc., best known for its University of Phoenix subsidiary, said a judge overturned an earlier verdict that had found the company fraudulently misled investors about its student recruitment policies.It had been ordered to pay shareholders about $280 million.Shareholders had claimed th...

By Stephen Taub • Aug. 5, 2008

“Mr. John” Pleads Guilty in Tishman Toilet Scam

A former project accountant at Tishman Construction Corp. pleaded guilty to stealing $2.8 million from the company in a phony invoicing scheme involving portable toilets, for which he sometimes signed checks “Mr. John.”John Hoeffner pleaded guilty to counts of grand larceny in the first degree an...

By Stephen Taub • Aug. 5, 2008

SEC at Full Strength

Expect Securities and Exchange Commission Chairman Christopher Cox to make faster progress in key areas, like the move toward international financial reporting standards, now that the regulator is once again at full strength. Last week, the SEC filled the last of two empty commissioner seats.Offi...

By Sarah Johnson • Aug. 4, 2008

Ex-NBC Finance Exec Pleads Guilty in Embezzlement Case

A former finance executive at NBC Universal has pleaded guilty to charges of scheming to steal over $800,000 from the company. James Walsh, the former treasury manager of NBC Universal, was charged with one count of conspiracy to commit wire fraud and one count of wire fraud, according to Michael...

By Stephen Taub • Aug. 4, 2008

What a CFO Doesn’t Say Can Hurt

That carefully crafted oral presentation you put in play at your last earnings conference call might actually have delivered some messages other than those you intended.Maybe you had some misgivings about the company’s performance outlook that you aimed to keep to yourself. But according to a new...

By David McCann • Aug. 1, 2008

Did Reg FD Really Level the Playing Field?

Hoping to inject some fair play into the system, the Securities and Exchange Commission also may have given investors less to work with, according to a new study. Indeed, researchers found that the SEC’s Regulation Fair Disclosure rule has curtailed the amount of information that companies disclo...

By Kate Plourd • July 31, 2008

SEC Advice Ahead for Web-posting Results

Recognizing how eight years of advances in internet technology have changed things, the Securities and Exchange Commission unanimously voted to provide companies with a new set of guidelines covering how to disseminate investor information on the company Web site.The last time the SEC issued guid...

By Kate Plourd • July 30, 2008

SEC Slaps CPA Firms for Not Registering

The Securities and Exchange Commission took action against several small accounting firms and their principals, saying they audited public companies without having registered with the Public Company Accounting Oversight Board.Each of the firms and individuals consented to the issuance of the SEC ...

By Stephen Taub • July 30, 2008

SEC and Labor Tie Up to Help Workers

The Securities and Exchange Commission and Department of Labor announced a formal arrangement for the two to share information on retirement and investments on a permanent basis.They said the memorandum of understanding (MOU) between them strengthens the cooperation with which they deal together...

By Stephen Taub • July 29, 2008

Enron De-energized: Exec Comes to Terms

The former chairman and CEO of Enron Energy Services agreed to pay $31.5 million to settle civil insider trading charges. Lou L. Pai, who had spent 15 years with Enron Corp., also agreed to be barred from serving as an officer or director of a public company for five years as part of a consent de...

By Stephen Taub • July 29, 2008

Double Whammy: Sued More, Settling Less

For the second straight half, the number of class-action securities lawsuits nearly doubled year-earlier levels, with many of the cases driven by the subprime mortgage issues and the credit crunch, according to a new study from Cornerstone Research in cooperation with Stanford Law School’s Securi...

By Stephen Taub and Roy Harris • July 29, 2008

Black Box Blues

After watching bank shares drop by almost a third this year, most European investors probably consider the idea of buying insurance stocks a sick joke. Banks’ balance-sheets may be difficult to understand but insurers can be mind-bogglingly complex too.Insurers also have a track record of fouling...

By Economist Staff • July 28, 2008

Nursing-home Verdict Against PwC Upheld

A $10 million verdict was upheld against PricewaterhouseCoopers, which earlier had been found liable for negligent misrepresentation in a series of financial audits of a Georgia nursing home conglomerate.According to a report on law.com about the upholding of the verdict, PwC had petitioned a Geo...

By Stephen Taub • July 28, 2008

Buyback Binge Aimed at Hiking Share Prices

As the stock market tries to battle back amid huge volatility, a number of large companies have pledged to repurchase shares in the past few days with the hope of boosting share price.Bank of America says it plans to spend $3.75 billion to buy back up to 75 million shares of common stock during t...

By Stephen Taub • July 25, 2008

Tea Party over as Accountant Admits Theft

An accountant has pleaded guilty to stealing $1.16 million from the Long Island company that employed him.Steven Rubenoff, who worked for Lake Success, New York–based DV Capital LP, maker of Arizona Iced Tea, admitted to funneling the money through his daughter’s college fund to finance drug usag...

By Stephen Taub • July 25, 2008

Abercrombie Stock Nosedives over CFO Exit

On Thursday Abercrombie & Fitch Co. said CFO Michael Kramer will leave the company on August 18 to take a similar post with Kellwood Co. On Friday shares of the trendy fashion retailer tanked, closing down nearly 8 percent on a day the overall stock market rose.Thus investors judged Abercromb...

By Stephen Taub • July 25, 2008

The CFO Duality: Mixing Business with Integrity

Ben Heineman got an eyeful of the C-suite during his 18 years as general counsel for General Electric Co. until his retirement in 2005. A book by Heineman published in June, High Performance with High Integrity, argues that a chief financial officer can and should act as guardian and protector of...

By David McCann • July 24, 2008

Southwest Hedges Curb Rising Fuel Costs

As a result of its ability to hedge against rising fuel costs, Southwest Airlines is making money while virtually all of its competitors are racking up huge losses.Southwest’s reported net income for the second quarter was $321 million, up 15 percent, from $278 million, for the same period a year...

By Stephen Taub • July 24, 2008

Razing the Bar

Most CEOs and CFOs trying to clear up fraud charges with the Securities and Exchange Commission these days face a difficult dilemma: roll the dice at a jury trial, where the odds of winning are low, or agree to a settlement that includes a bar on holding an executive position at a public company ...

By Alix Stuart • July 23, 2008

Ousted CFO Whistleblower Sues Bank

The latest informant attempting to break the whistleblower curse has filed a lawsuit this month in a United States district court in Tennessee, legal documents reveal. The whistleblower is George Fort, the former CFO of Tennessee Commerce Bancorp, who was ousted in May the day after he told the F...

By Alan Rappeport • July 23, 2008

Report: Financial Fraud a Challenge Despite Sarbox

Editor’s note: As the result of an editor’s error, the original headline of this story incorrectly stated that Sarbanes-Oxley controls caused higher fraud losses. The story itself correctly stated that Sarbanes-Oxley controls are associated with a substantial reduction in fraud losses, although, ...

By Alan Rappeport • July 22, 2008