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

SEC Begins Study of Disclosure Overhaul

The Securities and Exchange Commission — seemingly in danger of having its mandate severely diluted — made public its initiative to consider overhauling how public companies, mutual funds, brokers, and other regulated entities disclose information.The goal of the “21st Century Disclosure Initiati...

By Stephen Taub • June 24, 2008

Royal Dutch to Shell Out $120 Million

Royal Dutch Shell has agreed to pay $120 million to settle a class action lawsuit led by the Pennsylvania State Employees’ Retirement Board and the Public School Employees’ Retirement Board.The energy giant had been accused of overstating oil and natural gas reserves and artificially inflating st...

By Stephen Taub • June 23, 2008

Midlevel Insider-Trading Case Settled

A former Williams-Sonoma Inc. finance manager has settled civil charges that he traded the company’s stock ahead of its report of bad news.Adrian Di Vita, who was a financial planning and analysis manager for the specialty retailer, agreed to pay $76,932.80 in disgorgement of illegally earned gai...

By Stephen Taub • June 20, 2008

Despite Subprime Mess, D&O Still Cheap

The market for directors and officers insurance has remained soft despite a rise in litigation spurred by the subprime-mortgage crisis and tight credit environment, according to a survey by Towers Perrin, a reinsurance strategy firm.Last year, as prices for D&O insurance grew cheaper and poli...

By Alan Rappeport • June 20, 2008

Cendant Scandal Refuses to Die

Long before Enron and WorldCom, the $3.2 billion fraud by Cendant, revealed in 1998, has spawned numerous lawsuits and landed two key perpetrators in prison. In 2005, E. Kirk Shelton, the company’s former vice chairman, got 10 years; in January 2007, ex-chairman Walter Forbes was hit with more th...

By Stephen Taub • June 20, 2008

Deloitte Is Protected in “Insolvency” Ruling

A recent Pennsylvania Court ruling favoring Deloitte & Touche seems to restrict a company’s ability to win a case against an accountantcy for actions that lead to the company’s “deepening insolvency,” unless the accountant is negligent in other ways as well.The issue arose in a lawsuit that R...

By Alan Rappeport • June 19, 2008

A Hedge Too Far: Bear Ex-Managers Arrested

Former Bear Stearns hedge-fund managers Matthew Tannin and Ralph Cioffi were arrested, and are expected to be indicted on securities fraud charges after a year-long federal investigation that looked into the collapse of their subprime-mortgage-investment-heavy fund.Separately, after their arrest ...

By Stephen Taub • June 19, 2008

Regulators of the World Unite

Even as participants in U.S. capital markets wonder when American companies may be required to adopt international accounting standards, the world’s securities regulators took steps today to increase their oversight of the body responsible for setting those standards. A press release issued by th...

By Tim Reason and Sarah Johnson • June 18, 2008

Astonishing Sentence for Astonishing Scam

A former CFO who was an accused mastermind of a scam that investigators said had “astonishing scope” was sentenced to time served, which amounts to seven months in prison. The key to the soft sentence in the more than $680-million scheme, according to federal prosecutors: his cooperation in a cas...

By Stephen Taub • June 17, 2008

Parmalat Suits Target Deloitte, Grant

In another round of lawsuits stemming from the Parmalat accounting scandal, individual investors claiming losses from the Italian dairy giant’s 2003 collapse plan to sue Deloitte & Touche and Grant Thornton, along with Citigroup and Bank of America.The plaintiffs will probably demand more tha...

By Stephen Taub • June 17, 2008

Ex-Broadcom CFO: I Didn’t Do It

The former chief financial officer and the co-founder of Broadcom Inc. pleaded not guilty on Monday to committing fraud by backdating stock options. The ex-CFO, William Ruehle, denied 21 securities fraud charges in U.S. District Court in Santa Ana. Accused of filing false statements with the Secu...

By Stephen Taub • June 16, 2008

Europe Regulator Targets Rating Agencies

Credit-rating agencies will not be able to seek safe haven in Europe, according to Charlie McCreevy, European commissioner for internal markets and services, who called on Monday for “meaningful but targeted” measures to regulate the firms largely blamed for this year’s credit crisis.McCreevy’s c...

By Alan Rappeport • June 16, 2008

Outdated Oil & Gas Reporting Rules Take Heat

The Securities and Exchange Commission has moved a step closer to revising what many see as outdated rules for how oil and gas companies report their reserves.The SEC staff announced Thursday that it would recommend that the commission propose reporting rule changes. The staff didn’t specify what...

By Kate Plourd • June 13, 2008

New SEC Rules Being Drawn Up for the Ratings Game

The Securities and Exchange Commission moved on two fronts to reform the embattled credit rating agencies — aiming to fix conflicts of interest in the industry, and to distinguish between different types of asset-backed securities.Twin proposed new rules come as the rating companies have taken ma...

By Alan Rappeport • June 11, 2008

Analysts Now Turn First to the CFO, Not CEO

The CFO — no longer the CEO — is king when it comes to dealing with buy-side analysts, Greenwich Associates concludes in this year’s U.S. Corporate Investor Relations Study. The 688 Wall Street equity analysts interviewed for the annual survey, for the first time, ranked the credibility of a comp...

By Stephen Taub • June 9, 2008

Interim CFO of Mesa Air Quits

The struggling Mesa Air Group announced on Friday that it has accepted the resignation of its interim CFO, William Hoke, seven months after he replaced the company’s previous finance chief.Hoke, who became interim CFO in November 2007, resigned on May 23 “to pursue another career opportunity,” Me...

By David Katz • June 6, 2008

Scrushy at Home on the Ranch

For Richard Scrushy, the imprisoned former CEO of HealthSouth, the grass is greener on his side of the fence. That’s because his comfortable white-collar federal prison in Beaumont, Texas, does not actually have a fence.So Scrushy, who is serving time for fraud and bribery, wants to stay put in h...

By Alan Rappeport • June 6, 2008

Rating-agency Reforms Are Hammered Out

The top three credit rating agencies, as expected, signed an agreement with New York Attorney General Andrew Cuomo that reforms their business by instilling greater independence from the entities they rate — and, it is hoped, introduces greater accuracy.The agreement will change the way Moody’s ...

By Alan Rappeport • June 5, 2008

Major Reforms Near for Ratings Industry

Everybody, it seems, wants to turn the tables on the ratings agencies.On Tuesday, questions about reforming Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings were high on the agenda for senators questioning three Securities and Exchange Commission nominees. After a discussion ab...

By Roy Harris • June 4, 2008

Rating Agencies in Sights of New SEC?

The Securities and Exchange Commission, on the verge of being down to just two commissioners, may soon be back up to full strength — and using that muscle against credit rating agencies.When it came to questions about credit rating agencies, Democratic nominees Luis Aguilar and Elisse Walter, and...

By Tim Reason • June 3, 2008

Facing Backdating Claims: Pick Your Strategy

Three cases. Three different strategies for dealing with stock-option backdating allegations.While Brocade Communications Systems has said it will pay $160 million to plaintiffs to settle its class-action lawsuit, and Analog Devices Inc. and its CEO have signed seven-figure settlements in the fac...

By Stephen Taub and Roy Harris • June 3, 2008

Ex-CFO to Help Case Against His Old Firm

The former finance chief of defunct North Carolina human-resources services provider Castleton Group pleaded guilty to tax evasion, and reportedly will cooperate with prosecutors pursuing others related to Castleton. Jay McLamb, the former CFO, entered the plea as part of a negotiated settlement ...

By Stephen Taub • June 3, 2008

Dow Settles “LBO” Case Against Ex-CFO

Dow Chemical said it settled lawsuits with former CFO J. Pedro Reinhard and a former divisional executive vice president stemming from a dispute over whether the pair took part in a secret effort to take over the company.Under the deal — described in a press release purporting to be from Reinhard...

By Roy Harris and Stephen Taub • June 2, 2008

A Big Challenge for Fans of Political Disclosure: GM

With six big companies recently having decided to adopt disclosure policies for their corporate political contributions, shareholders for an even bigger one — General Motors — will put their own proposal up for a vote at GM’s Tuesday annual meeting. Were the measure — offered by shareholder Catho...

By Kate Plourd • June 2, 2008