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

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

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

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

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

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

McAfee Sues Law Firm that Defended CFO

More than a year after former McAfee CFO Prabhat Goyal was convicted of corporate fraud, the antivirus software maker is headed back to court. This time it’s suing the law firm that represented its former finance chief for over-billing the company more than $6 million. In April, McAfee filed a $1...

By Kate Plourd • 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

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

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

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

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

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

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