Accountant Guilty of Helping CEO Commit Fraud

A former financial executive has admitted her role in a fraud that resulted in the bankruptcy of a now-defunct bottled-drinks maker.Tammy Andreycak, who was director of accounting for Le-Nature’s Inc., pleaded guilty in federal court in Pittsburgh to charges of bank fraud, wire fraud, conspiracy,...

By CFO Editorial Staff • April 25, 2008

Jail after All for Ex-HealthSouth Finance Exec?

A former HealthSouth assistant controller whose original sentence had spared him prison time may be headed there after all.A federal appeals court once again has granted a government request to vacate the earlier sentence handed down for Kenneth K. Livesay, who received house arrest and probation...

By Stephen Taub • April 24, 2008

Feds: Adelphia Fraud Victims Can Ask for Their Money Back

Michael J. Garcia, U.S. attorney for the Southern District of New York, announced that victims of the securitiesfraud committed at Adelphia Communications can ask the U.S. Attorney General to recover parts of their financial losses that were directly caused by the fraud.In July 2004, founder Joh...

By Stephen Taub • April 24, 2008

SEC Gears to Stiffen Rules for Wall Street

The collapse of Bear Stearns Cos. appears to be leading the Securities and Exchange Commission to impose higher capital requirements on investment banks.The SEC is meeting with Wall Street banks that have lost money from the mortgage crisis to discuss the possible requirement to set aside more ...

By Stephen Taub • April 24, 2008

For Creditors, Enron’s End of the Line

A U.S. Bankruptcy Court approved Enron CreditorsRecovery Corp.’s $1.66-billion MegaClaims litigation settlement withCitigroup, effectively closing the suit.The money returned to Enron creditors through this and other arrangements will bring the total of such creditor returns to $20 billion, accor...

By Stephen Taub • April 24, 2008

Frank Prods SEC to Study Auction-Rate Havoc

House Financial Services Committee Chairman Barney Frank wants to know what the Securities and Exchange Commission is doing to investigate the sale of auction rate securities and the havoc caused in that market this year. The Massachusetts Democrat and Rep. Paul Kanjorski, chairman of the Subcom...

By Sarah Johnson • April 24, 2008

The Looming Battle over Sovereign Wealth Funds

Congress continued to express concern about the future of sovereign wealth funds and their potential threat to the American economy and foreign policy. But Securities and Exchange Commission and Federal Reserve officials tried to ward off efforts to regulate the foreign government-run funds too q...

By Alan Rappeport • April 24, 2008

Fannie and Freddie Warned to Play “Fair”

The regulator that oversees Fannie Mae and Freddie Mac warned the government-chartered buyers of mortgages to be judicious in using fair-value accounting rules, according to the Washington Business Journal.The publication said that the issue focuses on Accounting Standard No. 159, Fair Value Opti...

By Stephen Taub • April 23, 2008

Cox’s Top Lawyer to Leave SEC

Michael J. Halloran, Securities and Exchange Commission chairman Christopher Cox’s go-to guy on a wide range of issues, will leave the SEC in May to return to the private sector. Halloran is one of the inner-circle officials at the SEC who has worked closely with the chairman. Serving as counselo...

By David Katz and Marie Leone • April 21, 2008

Taming the Beast

Bankers, erstwhile masters of the financial universe, are not used to being spoken down to. But just days after the industry resolved, in the words of Deutsche Bank’s Josef Ackermann, to “clear our house first and not leave it to the regulators to do it for us”, the Group of Seven finance ministe...

By Economist Staff • April 21, 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

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

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

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

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

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

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

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

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