Ex-Refco President Guilty of Securities Fraud

The former president of Refco Inc. was convicted in a Manhattan federal court on Thursday on charges relating to a massive $2.4 billion scheme to defraud investors.Tone Grant was found guilty of conspiring to commit securities fraud, wire fraud, bank fraud, and money laundering. He was also convi...

By Stephen Taub • April 18, 2008

Ex-Fannie Execs Settle Scandal Charges

Three former Fannie Mae leaders, two of them top finance executives, have agreed to pay a combined $31 million to settle enforcement actions relating to the mortgage lender’s accounting scandal.The Office of Federal Housing Enterprise Oversight (OFHEO) alleged that Fannie’s ex-chairman and chief ...

By Stephen Taub • April 18, 2008

CFO Leaves, Feds Open Probe

A shipping company announced, two weeks after its CFO resigned, that it has been served with search warrants and a grand jury subpoena related to an investigation of pricing practices of ocean carriers operating in Puerto Rico. Authorities took computers and boxes from the headquarters of Horizo...

By Stephen Taub • April 18, 2008

Brother, Can You Spare a Tip?

A day trader who traded on information about Ryan’s Restaurant Group — information allegedly obtained illegally from his brother-in-law — settled civil insider trading charges by the Securities and Exchange Commission.The brother-in-law, according to the SEC, was a director of the private equity...

By Stephen Taub • April 17, 2008

Court Rules Against Funds in Telos Case

A Maryland court dismissed all claims made by a pair of activist hedge funds against defense contractor Telos Corp. for alleged breach of fiduciary responsibility.Telos said that the Circuit Court for Baltimore dismissed with prejudice all claims made by Boston-based Costa Brava Partnership III, ...

By Stephen Taub • April 17, 2008

The Art of the Steal, Bilbao-Style

The chief financial officer of one of Spain’s greatest modern tourist attractions, the Guggenheim Museum Bilbao, was fired for allegedly embezzling nearly $800,000.The museum has now launched legal proceedings against Roberto Cearsolo Barrenetxea, according to the Associated Press.He had been fin...

By Stephen Taub • April 17, 2008

SEC Inches Toward More Authority over Munis

The Securities and Exchange Commission’s announcement last week that the regulator had charged five former San Diego officials with fraud read like all its other enforcement-related press releases.But the case — stemming from municipal securities offered in 2002 and 2003 that were sold with “fals...

By Sarah Johnson • April 16, 2008

SEC to Vote on Data Tagging

The Securities and Exchange Commission has scheduled an open meeting for next Monday to vote on a proposal that could mandate the use of data-tagging XBRL for publicly traded companies. Also known as extensible business reporting language, the XBRL technology could be a boon to information-hungry...

By Sarah Johnson • April 16, 2008

Cox Seeks $1B Boost from Congress

Securities and Exchange Commission chairman Christopher Cox asked Congress to approve his nearly $1 billion budget request for fiscal year 2009. If lawmakers agree the SEC needs its first budget increase in three years, the commission will have realized a roughly 4 percent increase and be able to...

By Sarah Johnson • April 16, 2008

Judge Orders Citi to Trial in Parmalat Case

Citigroup Inc. will stand trial after all for its alleged role in the collapse of Parmalat SpA.New Jersey state Judge Jonathan Harris, of Bergen County Superior Court, ruled on Tuesday that a jury trial should begin on May 5. However, he did dismiss some of the claims raised by Parmalat CEO Enric...

By Stephen Taub • April 15, 2008

ISS: Throw Them Citi Bums Out

Citigroup has become perhaps the highest-profile target for activist investors seeking to throw out directors at upcoming annual meetings — and it can partly blame its CFO for the attention.Proxy-advisory firm Institutional Shareholder Services is calling on shareholders to vote against the reele...

By Stephen Taub • April 11, 2008

What It Is Ain’t Eggs-actly Clear

Cal-Maine Foods said it is establishing an unusual, variable rate dividend policy, meaning that the dividend will rise or fall according to the company’s quarterly income.The egg producer will start by paying out one-third of its earnings for the third fiscal quarter ended March. That works out ...

By Stephen Taub • April 10, 2008

Shrinking Sun-Times Faces Delisting

Sun-Times Media Group, publisher of some of the country’s largest newspapers including the venerable Chicago Sun-Times, has dwindled in value to the point where it is in danger of being delisted from the New York Stock Exchange. The company has fallen out of compliance with New York Stock Exchan...

By Stephen Taub • April 10, 2008

Severance Severed for ex-Gemstar Chief

The Securities and Exchange Commission on Wednesday announced a court ruling in its favor that stops a $29.5 million severance package to the former CEO of Gemstar-TV Guide International, Henry Yuen, who committed securities fraud before leaving the company.The funds were previously set aside in...

By David McCann • April 9, 2008

How Long Should It Take to Restate?

Sometimes after announcing they need to restate their financials, companies go into shutdown mode. For up to two years, investors won’t see a regulatory filing or hear a significant financial peep while a company tidies up its past. The Securities and Exchange Commission’s Advisory Committee on I...

By Sarah Johnson • April 9, 2008

Survey: D&O Premiums Dove 19 Percent in First Quarter

Despite the mounting threat of shareholder lawsuits tied to the subprime crisis, the average directors’ and officers’ liability premium fell 19 percent in the first quarter, according to a survey of about 150 corporate risk managers.Further, although the D&O price decrease was the biggest rec...

By David Katz • April 8, 2008

United Rentals’s ex-CFO Indicted

The former CFO and president of United Rentals has been indicted for conspiracy, securities fraud, insider trading, and making false filings with the Securities and Exchange Commission. The executive, John Milne, worked to artificially increase the company’s stock price; conceal its true financia...

By Stephen Taub • April 7, 2008

Solvent Survivors

When Swiss insurer Helvetia announced in March that it would buy Italy’s Padana Assicurazioni, a small company providing private insurance policies for employees of energy group ENI, formerly its parent, the deal must have been a relief to management and investors alike. Last year, chief executiv...

By Tim Burke • April 7, 2008

Cut-Price Ideas

Innovation is about to get cheaper. From May, companies seeking patent protection in Europe will no longer need to translate their application into the official language of every country in which they apply for protection. The European Patent Office reckons the changes could cut the cost of an ap...

By Eila Rana • April 7, 2008

Cover Me

When a former employee of Cohort — a small-cap technical and advisory services provider for defence and security firms — cashed in nearly 20,000 share options on his departure, the firm’s stock price dropped 7%. “It’s just ridiculous,” says Simon Walther, finance director of the £34m (€43m) UK co...

By Eila Rana • April 7, 2008

Skilling’s Lawyer: He Had Only the Company in Mind

Lawyers for, Jeffrey Skilling, the former chief executive of Enron now serving a more than 24-year prison sentence are reportedly arguing in their appeal of his conviction that although he took risks when he ran the company, they were always with the intention to benefit the company. Skilling’s c...

By Stephen Taub • April 3, 2008

Cox on I-Banks: There Oughta Be a Law

In testimony Thursday, Securities and Exchange Commission Chairman Christopher Cox said there is no way to know for certain whether or not the Federal Reserve’s rescue of Bear Stearns was the right move, but said Congress should act to improve oversight of investment bank liquidity.Testifying Thu...

By Tim Reason • April 3, 2008

Union Head Targets WaMu over Bonus Decision

The chairman of a major Washington Mutual union, the American Federation of State County and Municipal Employees (AFSCME), is calling for WaMu shareholders to withhold support for the members of the company’s Human Resources Committee. The opposition is based on, as the union put it, the company’...

By Stephen Taub • April 1, 2008

Enron Creditors Get Another $1 Billion

Enron is distributing more than $1 billion to creditors and affiliated debt companies — the twenty-first distribution being made by Enron Creditors Recovery Corp.The latest payment consists of about $980 million in cash and Portland General Electric Co. common stock, equivalent to about $37.4 mil...

By Stephen Taub • April 1, 2008

Remorseful CFO Gets Jail for Embezzlement

The former CFO of a small provider of products for the photonics industry was sentenced to 46 months in federal prison for embezzling more than $800,000.William Miraglia was ordered to pay $796,621 in restitution to his former employer, Northvale, N.J.-based Photonic Products Group Inc. and an in...

By Stephen Taub • April 1, 2008