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

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

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

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

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

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

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

Short on the Charm at Charming Shoppes

Charming Shoppes Inc. is suing two hedge funds that have launched a proxy fight against the company, alleging they have filed “materially misleading and incomplete documents” with the Securities and Exchange Commission.On Friday, the retailer that owns the Lane Bryant and Fashion Bug brands filed...

By Stephen Taub • March 10, 2008

A Shocking Day for Spitzer

Reports in the New York Times linking New York Gov. Eliot Spitzer to a federal prostitution investigation have undoubtedly stunned companies around the nation that had come to see Spitzer as a corporate crime-buster.The governor, the one-time scourge of Wall Street abuses, made a brief statement ...

By Roy Harris • March 10, 2008

SEC: Ready to Pounce on Pension Fraud

The Securities and Exchange Commission has fired a shot across the bow of public pension funds, warning the entities that poor compliance policies could sink them. On Thursday the SEC issued a report on an insider-trading investigation at Alabama’s state pension fund that highlighted the fund’s p...

By Kate Plourd • March 7, 2008

Quest Software, Two ex-CFOs Get Wells Notices

Quest Software said two of its former chief financial officers are among four individuals who may be charged by the Securities and Exchange Commission in connection with the regulator’s probe into the backdating of stock options.The company itself also may face charges, according to a regulatory ...

By Stephen Taub • March 6, 2008

Man Bites SEC

A former executive with Aeropostale Inc. has sued the Securities and Exchange Commission, claiming it violated his confidential relationship with his attorney to obtain key information while investigating why he was fired. Christopher Finazzo, the former chief merchandising officer of the clothin...

By Stephen Taub • March 6, 2008

Ignore a Whistleblower — at Your Peril

A financial scandal at biotech company Dyadic International offers a telling lesson about how whistleblower memos can come back to haunt the executives who ignore them. Dyadic’s internal dirty laundry first came to light at the company last April, when then-CFO Wayne Moor went to the company’s As...

By Sarah Johnson • March 5, 2008

Investors Push Firm for Credit-Risk Data

The ongoing credit crunch and subprime-mortgage saga has heightened investors’ demand for knowing how much risk exposure their companies face. In response to investors’ questions about Principal Financial Group’s ties to bond insurers and mortgage companies, the 401(k) services and insurance prov...

By Sarah Johnson • March 5, 2008

Ex-Telecom CFO Settles with SEC

Correction: This story has been updated to reflect that the consent decree with the Securities and Exchange Commission signed by Richard Fresia, former CFO of Expanets Inc., did not contain any accounting fraud charges. In a previous version of this article, and its headline, it was incorrectly s...

By Stephen Taub • March 5, 2008