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

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

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

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

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

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

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

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

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

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