E&Y Ex-Partner Indicted for Insider Trades on Deals

A former Ernst & Young partner and an investment banker were indicted for participating in a scheme to trade on inside information about seven separate, potential merger-and-acquisition transactions involving clients of the Big Four accounting firm.James Gansman, the former E&Y partner, a...

By Stephen Taub • May 29, 2008

Welcome Back, Guidance

Earnings guidance may be back in vogue.Two-thirds of investor relations professionals responding to a recent National Investor Relations Institute survey reported they were providing earnings guidance, reversing a trend away from the practice over several years.In 2007, just 51 percent of NIRI re...

By Stephen Taub • May 28, 2008

Haggling on the Hill

There was lofty talk of bipartisanship in Washington, DC, this week as a bill to rescue struggling homeowners cleared a key Senate committee, the biggest hurdle it is likely to face. But the noise in the background was the unmistakable sound of horses being traded.Democrats got their expansion of...

By Economist Staff • May 23, 2008

Today’s Tip: Stay Away from the SEC

It goes without saying that free-wheeling auditors prefer to keep their distance from the Securities and Exchange Commission. But now a new study suggests that the benefit of staying away from the SEC may be literal as well as figurative.Auditors located farther away from the SEC’s 11 regional of...

By Alan Rappeport • May 22, 2008

Can’t Pay SEC Penalty? Don’t Bother

The Securities and Exchange Commission has settled civil fraud charges against the ex-CFO of Royal Ahold’s one-time U.S. subsidiary relating to the company’s massive accounting scandal. Michael Resnick, the former finance chief of U.S. Foodservice, consented to the judgment without admitting or ...

By Stephen Taub • May 21, 2008

Ex-Finance Exec Settles Insider Trading Charges

A former finance executive for Provide Commerce has settled insider trading charges with the Securities and Exchange Commission. Gordon C. Bigler, director of corporate finance and investor relations for the e-commerce company that sells fresh flowers and fruit, has consented, without admitting o...

By Stephen Taub • May 21, 2008

Patient with Pups, but Tough on Troubled Treasurers

The former treasurer of the American Spaniel Club, after pleading guilty to stealing $120,000 by writing checks to herself to support a gambling habit, received 15 years probation as her sentence. She was also ordered to pay $500 monthly until June 2009, and $1,000 thereafter, according to the Ta...

By Stephen Taub and Roy Harris • May 19, 2008

Settling for Less? A Study in Backdating

The improper backdating of stock options apparently has not generated the number or size of shareholder class-action suits that some observers expected.Of nearly 250 companies identified as being potentially involved in backdating, only 37 have actually been the target of related federal sharehol...

By Stephen Taub • May 15, 2008

Another Problem Parent

Mortgage craters, ropy disclosure, bloated costs, a newish boss desperately trying to stop the haemorrhaging amid calls for radical surgery, even a break-up. Citigroup? Aptly though this describes America’s biggest bank, it could just as easily apply to its biggest insurer, American International...

By Economist Staff • May 15, 2008

Startling Strategy: Sue the Shareholder

Vaalco Energy is trying an unsual tactic to stave off a proxy fight: suing its shareholders.The independent oil producer filed an action against New York City-based hedge fund Nanes Delorme Partners I L.P., and Pilatus Energy SA, of Zug, Switzerland, in federal court, alleging they violated secur...

By Stephen Taub • May 15, 2008

SEC Charges Ex-Broadcom CFO, Three Others

The Securities and Exchange Commission charged a former CFO of Broadcom Corp. and three other of its current or former officers with participating in a five-year scheme to secretly backdate stock options granted to virtually all Broadcom officers and employees.The SEC’s complaint alleged that fro...

By Stephen Taub • May 14, 2008

JPMorgan May Be Charged over Muni Bonds

JPMorgan Chase & Co. said the Securities and Exchange Commission may bring civil charges against the bank related to the bidding of financial instruments tied to municipal bonds.The banking giant said in a regulatory filing that the Philadelphia regional office of the SEC sent the bank a Well...

By Stephen Taub • May 14, 2008

How Ahold Unit Fooled the Auditors

The Securities and Exchange Commission settled a civil fraud action against a former executive of Royal Ahold’s then-U.S. unit stemming from the company’s massive accounting fraud earlier this decade.Brian Spears, a former vice president of purchasing at U.S. Foodservice, then a subsidiary of Dut...

By Stephen Taub • May 14, 2008

Greenberg Group Sues AIG

A foundation headed by former American International Group chief executive Maurice Greenberg has accused the insurance company’s current CEO and CFO of misrepresenting multibillion-dollar losses in AIG’s portfolio of credit-default swaps. The alleged deception caused significant losses for the fo...

By Stephen Taub • May 8, 2008

Congress Probes SEC’s Role in Credit Crisis

The Securities and Exchange Commission has been forced to play defense in the wake of the Bear Stearns implosion — and the credit crisis overall. Indeed, its supervision of five investment banks and oversight of the credit rating agencies have been repeatedly scrutinized by Congress during the pa...

By Sarah Johnson • May 7, 2008

White House Picks Paredes for SEC

The Bush administration will nominate Troy Paredes, a Washington University law professor, to be a Republican commissioner of the Securities and Exchange Commission, a senior administration official told CFO.com on Tuesday.The decision comes a day after Paul Atkins announced that he would not see...

By Alan Rappeport • May 6, 2008

Who’s Seeking Merrill’s Auction-Rate Data?

Merrill Lynch said it has received requests for information from various governmental agencies regarding auction-rate securities, including the recent failure of auctions.The banking giant did not provide further details, and didn’t note which governmental agencies were seeking the data. In a reg...

By Stephen Taub • May 6, 2008

After Six Years, SEC Goes on Atkins Diet

Securities and Exchange Commissioner Paul Atkins, after nearly six years in office, said Monday that he will leave the agency this summer.Atkins has worked for the SEC for a decade, serving in various positions under three different chairmen. First appointed as a commissioner in 2002, he is now i...

By Alan Rappeport • May 5, 2008

On the Hill, Trying to Put Plaintiffs’ Bar on the Defensive

With class-action attorney William Lerach almost set to start his two-year prison sentence, some Republican lawmakers in Washington are giving Corporate America more to celebrate as they seek to turn up the heat on the conduct of class action lawyers across the country. Last Friday, House minorit...

By Kate Plourd • May 5, 2008

Apollo Takes Aim at Backdating Settlements

Apollo Group Inc. received preliminary approval for a settlement of two derivative lawsuits filed stemming from the backdating of stock options.The for-profit education company that operates the University of Phoenix system said in a regulatory filing that on April 18 and on April 28 a federal Di...

By Stephen Taub • May 5, 2008

Parmalat Investor Recovery Hits $90 Million

Parmalat SpA has announced that it settled a securities class action with investors stemming from its stunning collapse in 2003. Under the deal, the Italian dairy giant will distribute 10.5 million shares of stock. That works out to a little less than $40 million, based on Parmalat’s Thursday clo...

By Stephen Taub • May 2, 2008

A New Top Cop for Corporate Finance?

Tucked away among the five new regulators called for in U.S. Treasury Secretary Henry Paulson’s blue-sky blueprint for reforming the financial-services industry is an authority of special interest to CFOs: a corporate finance regulator.Under the long-range provisions of the U.S. Treasury’s Bluepr...

By David Katz • May 1, 2008

SEC Joins Mounties in Tangled Nortel Case

Three former Nortel Networks Corp. finance executives settled Securities and Exchange Commission fraud charges stemming from their alleged involvement in Nortel’s earnings management fraud during 2002 and 2003.Craig A. Johnson, James B. Kinney, and Kenneth R.W. Taylor, who were the vice presiden...

By Stephen Taub • May 1, 2008

All in the Families

Pssst…Looking for a stock tip? So are federal investigators, and their efforts may have ramifications for CFOs. A recently reinvigorated Securities and Exchange Commission task force, having brought charges against 11 Wall Street insiders and three hedge funds a year ago, is now paying close atte...

By Alix Stuart • May 1, 2008

Patents under Pressure

Anyone who has ever made a purchase on Amazon.com using its “1-Click” checkout option can’t help but be impressed by the convenience. Register your personal, credit, and delivery information once and all subsequent purchases require only a single mouse-click. The concept is simple, ingenious — an...

By Marie Leone • May 1, 2008