An Ill-Suited Move

While many small companies dream of listing on the New York Stock Exchange, off-price retailer Syms Corp. recently decided that living that dream was just too expensive. A small chain with only 33 stores, low trading volume, and no analyst coverage, Syms told investors in January that it would vo...

By Kate O'Sullivan • April 1, 2008

For Shareholders, It’s Subprime Time

Already reeling from the subprime-mortgage meltdown, big banks, mortgage lenders, credit-rating agencies, and home builders are now the prime targets of shareholder activism as the 2008 proxy season begins. “The credit crunch will clearly affect the types of issues voted on this season,” says Pat...

By Alix Stuart • April 1, 2008

Trials & Errors

When it comes to class-action securities lawsuits, the operative question is usually when, not whether, to settle. Last fall, however, two companies and their executives ignored that dictum and chose a different path: they called their shareholders’ bluff and went to trial.One, JDS Uniphase, put ...

By Alix Stuart • April 1, 2008

Retired but Not Forgotten

Frank Borelli is concerned about his directors’ and officers’ liability coverage — and that’s saying something, since Borelli is a former CFO of insurance broker Marsh & McLennan Cos. Why the worry? “I’m on three boards now, and if I left one of them today and a claim is made four and a half ...

By Russ Banham • April 1, 2008

Paulson Wants a Top Cop of 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 • March 31, 2008

White House to Tap Two Dems to SEC

The Bush Administration announced late Friday afternoon that it plans to fill the two open Democratic slots on the Securities and Exchange Commission with two securities lawyers: Luis Aguilar, a partner with McKenna Long & Aldridge in Atlanta; and Elisse Walter, a senior executive vice presid...

By David Katz • March 28, 2008

Subprime Suits Blur D&O Outlook

The subprime-mortgage mess will likely tighten the coverage and cost of the insurance policies that cover executives, corporations, and corporate boards for losses and legal fees in securities lawsuits, an attorney predicts.Indeed, directors’ and officers’ liability insurance coverage could cost ...

By Sarah Johnson • March 28, 2008

Are Rating Agencies Forever Broken?

Credit rating agencies could be one of the few organizations blamed for the recent credit crisis that will escape the heavy-handed treatment now being threatened by federal regulators.The most recent report of the President’s Working Group, chaired by Treasury Secretary Henry Paulson, obliquely t...

By Tim Reason and Sarah Johnson • March 27, 2008

An End to Enron MegaClaims, as Citi Settles

Citigroup Inc. agreed to pay $1.66 billion to settle its part of what has been called the the MegaClaims litigation in the Enron bankruptcy case. In the deal, Citi also agreed to waive $4.25 billion of claims against Enron.Citi said that the settlement includes a denial of any wrongdoing, and tha...

By Stephen Taub • March 26, 2008

Hollinger Settles Asset-Diversion Charges

Hollinger Inc. has agreed to pay more than $21 million to settle a Securities and Exchange Commission complaint over its role in an alleged deceptive scheme to divert cash and assets from Hollinger International, now called Sun-Times Media Group. Under the settlement, Hollinger Inc., a Canadian ...

By Stephen Taub • March 25, 2008

SEC Charges Biovail, Four Execs with Fraud

A Canadian drug company will pay the Securities and Exchange Commission $10 million to settle claims that it improperly recognized revenue and misled analysts and investors by not being truthful in press releases and conference calls. The regulator’s charges against Biovail Corp. stem from financ...

By Sarah Johnson • March 24, 2008

Justice Department Probes Alcoa in Bribery Case

The Justice Department has launched a probe of Alcoa to find out whether it bribed officials in Bahrain, according to the Associated Press.The wire service said the investigation came to light in documents filed by federal prosecutors in U.S. District Court for the Western District of Pennsylvani...

By Stephen Taub • March 21, 2008

Emcore Battles the Bloggers

Emcore Corp. got at least a two-day stock-market respite late last week after taking the unusual step Tuesday of trying to counter a negative blog posting — not only issuing an Emcore press release but also asking securities regulators to “investigate whether improper relationships exist between ...

By Roy Harris • March 21, 2008

Melvyn Weiss Is Latest to Plead Guilty

Melvyn I. Weiss, once among the most powerful of plaintiffs’ attorneys, has agreed to plead guilty to a federal racketeering charge, and to acknowledge that he and others concealed secret payment arrangements at his famous firm Milberg Weiss.Under his plea agreement, filed on Thursday and announc...

By Stephen Taub • March 20, 2008

AB Volvo to Pay $19.6 Million in Iraqi Oil-for-Food Case

Swedish truck, bus, construction equipment company AB Volvo has agreed to pay $19.6 million to the U.S. Securities and Exchange Commission to settle charges of making improper payments to Iraq under the United Nations Oil for Food Program.The regulator filed Foreign Corrupt Practices Act books-an...

By Stephen Taub • March 20, 2008

Barney Frank: Create a “Risk” Post

Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said Thursday that the United States is in a recession and that Congress should consider a “financial services systemic risk regulator” to combat the causes of the credit crisis.Speaking before the Greater Boston Cha...

By Alan Rappeport • March 20, 2008

SEC Probes Bear Stearns’s Last Gasps

A week after Bear Stearns’s sudden meltdown, the Securities and Exchange Commission revealed that the staff has been scrutinizing the firm’s actions made before it was acquired.The speedy acquisition of the firm by JP Morgan Chase & Co. on Sunday — with the help of the Federal Reserve — just ...

By Sarah Johnson • March 19, 2008

Former Days Inn CFO Could Get More Days in Prison

Three years after receiving a one-year prison sentence for bank and mail fraud, former Days Inn CFO James Cutler could serve more time. An appeals court sided with U.S. prosecutors in its decision on Monday to reverse Cutler’s 2005 sentencing. Along with the one year in prison, the U.S. District ...

By Sarah Johnson • March 18, 2008

When CFO Talks, Will CEO Walk?

The former CFO of Qwest played a key role in a federal appeals Court’s decision on Monday to grant a new trial for Joe Nacchio, the company’s one-time chief executive. The Tenth Circuit Court of Appeals ruled that the trial judge wrongly excluded expert testimony important to Nacchio’s defense i...

By Stephen Taub • March 18, 2008

Mystery Swirls over Missing CFO of Clinton-Library Firm

The chief financial officer of the company that built the Clinton Library has been missing since late January. And as the investigation continues, questions deepen about whether business pressures might have played a role in his disappearance. Police say John Glasgow, the CFO of Little Rock-based...

By Stephen Taub and Kate Plourd • March 17, 2008

Office Pools: A Safe Bet?

Cinderella teams are hard to resist. So regardless of your alma mater, you may be tempted to pick the feisty Drake University Bulldogs for your office pool in the NCAA basketball tournament. Water-cooler chatter at offices around the country is already buzzing about the David-versus-Goliath match...

By Marie Leone • March 14, 2008

Proposed Restatement Guidelines Draw Investor Alarm

Investor advocates are wary of a regulatory proposal that could decrease the number of times companies restate their financial results.Barbara Roper, director of investor protection for the Consumer Federation of America, contends that the suggested changes to the Securities and Exchange Commissi...

By Sarah Johnson • March 14, 2008

Fund Time for Ex-Enron Workers

The Department of Labor has squeezed an extra $2 million out of Hewitt Associates, which it had accused of misallocating court-supervised settlement funds owed to former Enron employees.Hewitt, which was the fund’s administrator, and the Enron Creditors Recovery Corp. agreed to restore $11.2 mill...

By Stephen Taub • March 14, 2008

Pension Fund Pays for Alleged Insider Trading

An Alabama pension fund has agreed to pay $750,000 to former Liberty Corp. shareholders as a result of a federal insider trading probe, the Associated Press reported, citing pension officials.According to the Securities and Exchange Commission, The Retirement Systems of Alabama (RSA) purchased s...

By Stephen Taub • March 13, 2008

Holders Allege “Grand Theft” at Take-Two

Shareholders have sued Take-Two Interactive Software in Delaware Chancery Court for the company’s rejection of a takeover offer in which Electronic Arts Inc. offered a 64-percent premium, according to press reports.The suit claims that Take-Two, maker of the hit video game Grand Theft Auto, rebuf...

By Stephen Taub • March 11, 2008