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

Freddie the Filer

Freddie Mac and EDGAR became fast friends on Friday, when the mortgage lender voluntarily registered its common stock with the Securities and Exchange Commission for the first time.Under SEC regulations, Freddie Mac — known officially as the Federal Home Loan Mortgage Corp. — is now required to f...

By Marie Leone • July 18, 2008

Talking It Over, and Over, and…

In tough times, finance executives might expect — or hope — that shareholders would understand that the executives need to concentrate on running the business. But in fact most institutional investors want more one-on-one meetings with management than ever, according to a new study by Brunswick, ...

By Kate O'Sullivan • July 15, 2008

The Great Workers’ Comp Revolt

It’s not often that a major U.S. corporation blames lower net income on workers’ compensation claim costs — and in a single state, to boot. But that’s what Costco CFO Richard Galanti did in the second quarter of fiscal 2003: despite an 8 percent increase in net sales from the previous year’s seco...

By Russ Banham • July 15, 2008

Energy Firm Settles Overstated Reserves Case

On Friday the Securities and Exchange Commission settled with El Paso Corp., its subsidiaries, and five former employees on charges they fraudulently inflated the energy company’s oil and gas reserves.The ex-president of El Paso’s Exploration and Production business, Rodney Erskine, agreed to pay...

By Kate Plourd • July 11, 2008

Enough Information?

Despite years of pressureon companies to do better, corporate transparencyis an underdeveloped art in Asia.To understand how far the region’s companiesstill have to go in improving financialreporting, consider HSBC Holdings. HSBC isa top performer in the ACCA/CFO Asia three-country“Regional Corpo...

By Tom Leander • July 11, 2008

Securities Lawyer Walter Joins SEC

Commissioner slots at the Securities and Exchange Commission are being filled — albeit slowly. On Wednesday, Democrat Elisse B. Walter was sworn in, just in time to participate in the regulator’s roundtable on fair value accounting. Walter, who joins commissioners Paul Atkins and Kathleen Casey, ...

By Marie Leone • July 10, 2008

Insider-trade Turbulence Hits Ex-Airbus CFO

Europe’s fast-expanding investigation into insider trading at Airbus owner EADS has sucked in ex-Airbus finance chief Andreas Sperl — the first current EADS executive to be detained in the probe, according to Sperl’s attorney.Since January 2007, Sperl had headed the EADS Dresden plant, according ...

By Roy Harris • July 9, 2008

Should Monolines Blame Mark-to-market?

Losses that companies record for credit default swaps, using mark-to-market accounting, may not be a true indicator of credit deterioration, a new report by Moody’s Investors Services says.MBIA and Ambac, two big bond insurers, recently have had their credit ratings downgraded by Moody’s, Standar...

By Alan Rappeport • July 9, 2008

Subprime Slam: SEC Exposes Rating Agency Faults

The Securities and Exchange Commission issued a report saying that the three major credit rating agencies have significant deficiencies in policies and procedures for rating structured products tied to subprime mortgages — including conflict-of-interest problems with their “issuers pay” fee model...

By Marie Leone • July 8, 2008

Jim Ayala, Chief Executive, Ayala Land

There’s something unexpected about Jaime “Jim” Ayala, chiefexecutive of Ayala Land, the Philippines’ largest and oldest real estate company: he’s not an Ayala. He doesn’t hail from the nation’s long-standing, leading business family (Jaime Zobel Ayala is chairman of Ayala Group). Never mind: this...

By Tom Leander • July 8, 2008

Accountant Uses Toilet Humor in Check Scam

He may be no Einstein. But a former Tishman Construction Corp. project accountant alleged to have stolen $2.8 million in a check-writing scam certainly has a gift for toilet humor.John Hoeffner was charged with stealing $2.8 million from Tishman in a phony invoicing scheme connected with a projec...

By Stephen Taub and Roy Harris • July 3, 2008

UnitedHealth Settles Backdating Suit

UnitedHealth Group will pay $895 million to settle a class action lawsuit challenging its historical stock options practices. The company said the proposed deal fully resolves claims against it, against all current officers and directors named in the lawsuit, and certain former officers and direc...

By Stephen Taub • July 2, 2008

SEC Charges Microtune’s Ex-CEO, Ex-CFO

The former chairman and CEO of Microtune Inc., along with its former CFO and general counsel, were charged by the Securities and Exchange Commission in the same stock-option backdating case that Microtune itself settled this week.Charged with civil fraud counts were Nancy Richardson, the ex-CFO, ...

By Roy Harris and Stephen Taub • July 2, 2008

Told to “Do Something” with Funds, He Stole Them

A former Oregon Department of Education accountant who stole nearly $1 million in school funds — using some of the money for his online gun and ammunition business — told the judge a peculiar story of having been confused by superiors who said he should “do something with the money.” He was sente...

By Stephen Taub • July 1, 2008

Microtune’s Tune Is a Consent Decree

Microtune Inc. agreed to settle Securities and Exchange Commission charges stemming from an investigation into the company’s historical stock option granting practices.Under the deal, the designer and marketer of radio-frequency products for the broadband communications and transportation electro...

By Stephen Taub • July 1, 2008

SEC Wonders: Who’s to Pay for Proxy Fights?

For the first time ever, the Securities and Exchange Commission has asked the Delaware Supreme Court to weigh in on an aspect of the director nominating process: whether companies or shareholders should foot the cost of a proxy fight.The regulator asked the state court to rule on which parties sh...

By Stephen Taub • July 1, 2008

Senate Bill: No More Arm-twisting

A bill introduced Thursday night would make it illegal for federal enforcement agencies — including the Securities and Exchange Commission — to demand documents that are protected by client-attorney confidentiality in exchange for lenient treatment in federal prosecutions.The Attorney-Client Priv...

By Kate Plourd • June 27, 2008

Navistar Gets Current on Financials, Relists

Navistar International has filed its quarterly reports for the first and second quarters of 2008, bringing it up-to-date after years of restatements and delinquencies. As a result, on Monday the truck and engine maker will be reinstated on the New York Stock Exchange under its original ticker sym...

By Stephen Taub • June 27, 2008

Changes Near for Oil and Gas Reporting Rules

On Thursday the Securities and Exchange Commission proposed a new set of rules that would change the way oil and gas companies report their reserves on financial statements. Following 60 days of public comment, the commission will take a final vote on adopting the changes.The new rules would requ...

By Kate Plourd • June 27, 2008

The Exxon Valdez Crashes into Fair Value Accounting

Nearly two decades after the Exxon Valdez spilled millions of gallons of oil into Alaska’s Prince William Sound, the Supreme Court ordered that punitive damages paid by the oil company should not exceed the compensatory damages it paid. That ruling cut Exxon’s punitive damages — initially set at ...

By Tim Reason • June 26, 2008

Senate Banking Committee Okays SEC Nominees

Three Securities and Exchange Commission nominees won approval from the Senate Banking Committee on Wednesday, according to press reports. Their nominations are now being sent to the full Senate, where reportedly they are likely to be confirmed. One of the nominees, Troy Paredes, was named by Pre...

By Stephen Taub • June 26, 2008

SEC: Credit Ratings Are a Crutch

The Securities and Exchange Commission on Wednesday continued its assault on the central role credit-rating agencies have played in the evaluation of securities. Two weeks after floating new rules to mitigate the agencies’ conflicts of interest and require them to distinguish among different typ...

By Kate Plourd • June 26, 2008

Angry Cox Expects SEC to Grow, Not Die

Rarely in its 74-year history has the Securities and Exchange Commission been so squarely on the griddle, with new reforms seeming to target its very existence and Chairman Christopher Cox personally being criticized as “peripheral,” in the words of a critical Monday profile on the Wall Street Jo...

By Roy Harris • June 26, 2008

Rigas Inmates Get a Shave: Three Years Off Terms

Adelphia Communications founder John Rigas and son Timothy, Adelphia’s fomer CFO, had their prison terms trimmed by three years in a resentencing that came after their convictions for roles in the company’s massive fraud. John Rigas, the 83-year-old former chairman of the cable company, along wit...

By Stephen Taub • June 25, 2008