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

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

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

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

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

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

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

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

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

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

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

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

Audit-rate Spurt Tempers Sarbox Savings

Corporate spending on compliance with the Sarbanes-Oxley Act’s Section 404 fell sharply again last year, and so did overall auditor costs. But a 5-percent spurt in average audit fees cut deep into the savings, according to a new survey from Financial Executives International.The average cost for ...

By Stephen Taub • April 30, 2008

Ex-Monster Controller Faces Backdating Charges

The Securities and Exchange Commission charged the former controller and the former president of Monster Worldwide Inc. for their alleged roles in a multiyear scheme to secretly backdate stock options for thousands of Monster officers, directors, and employees. The SEC complaint alleges that form...

By Stephen Taub • April 30, 2008

What’s Wrong with this Pixar?

The former chief financial officer of Pixar Animation Studios is likely to be charged by the Securities and Exchange Commission stemming from her role in a stock-option backdating scandal.Pixar, based in Emeryville, Calif., was acquired by Walt Disney Co. for $7.4 billion in 2006.Last week Ann Ma...

By Stephen Taub • April 29, 2008

Weathering the Storm?

Among all the other havoc that global climate change is expected to wreak, it also could take a toll on corporations’ business models. At least, that is the finding of a survey conducted by Storm Exchange, a firm that makes money helping companies cope with weather-related risk, and CME Group, a...

By Stephen Taub • April 29, 2008

Siemens Study Finds Rampant Abuses

A prominent international law firm hired by scandal-plagued Siemens AG to investigate bribery and corruption charges dating back to the late 1990s found evidence of violations of domestic and foreign compliance regulations.Debevoise & Plimpton LLP’s report says many of the violations were due...

By Stephen Taub • April 29, 2008

Whole Foods “Blogging” Probe Dropped by SEC

Whole Foods Market said the Securities and Exchange Commission has ended its inquiry into financial message-board postings by CEO John Mackey, and that the commission recommended no enforcement action against the company or any individual.In July 2007 the natural-foods retailing chain disclosed t...

By Stephen Taub • April 28, 2008

At BlueRay, Ex-CFO Sues to Make Finances Public

A former BlueRay Technologies Inc. finance chief, fired last year in part for not disclosing prior legal problems, is suing the company to make it disclose financial records, BlueRay said in court papers filed last week. The former finance official, Yelena Simonyan, is suing as a shareholder, acc...

By Stephen Taub • April 28, 2008