Refco Reversal: Ex-CFO Will Help Prosecutors

In a tearful apology as he entered a guilty plea in a cooperation deal with federal prosecutors, former Refco Inc. CFO Robert C. Trosten emerged as a key player in the government’s securities fraud case against the commodities broker and its top executivesTrosten, who had maintained his innocence...

By Roy Harris • Feb. 21, 2008

SEC Charges ex-CFO in $1B Death-benefit Fraud

The Securities and Exchange Commission charged a former CFO with helping fraudulently raise more than $1 billion from about 30,000 investors in a company specializing in interests sold in the insurance-policy death benefits of terminally ill or elderly persons. In its complaint against the ex-CF...

By Sarah Johnson • Feb. 20, 2008

SEC May Lure Foreign Firms by Easing Disclosure

In a continuing effort to make U.S. capital markets more appealing to foreign companies, the Securities and Exchange Commission proposed a number of amendments to its disclosure standards, including eliminating all requirements for paper submissions.“The proposed amendments would bring our foreig...

By Stephen Taub • Feb. 14, 2008

Court Tosses Conviction of Ex-Enron Unit’s CFO

The conviction of a former Enron unit finance chief was thrown out by a federal appeals court.The Associated Press reported that the Fifth U.S. Circuit Court of Appeals upheld a judge’s decision to toss the conviction of Kevin Howard for falsifying records at the one-time energy giant’s broadband...

By Stephen Taub • Feb. 14, 2008

Keep a Close Eye on Sovereign Funds: Cox

Sovereign wealth funds should not be over-regulated, Securities and Exchange Commission Chairman Christopher Cox warned Thursday. But the investment groups controlled by foreign governments — hot targets this week, as Senate members seek to place blame for a faltering U.S. economy — certainly dem...

By Alan Rappeport • Feb. 14, 2008

SEC Probes Dozens of Subprime Lenders

Securities and Exchange Commission Chairman Christopher Cox said Thursday that the agency has more than three dozen subprime cases underway to determine who might be blameworthy, as regulators press to root out the causes of the mortgage mess.Details of the investigations are confidential, Cox s...

By Alan Rappeport • Feb. 14, 2008

SEC Relies on Rating Agencies, Too

The Securities and Exchange Commission is looking at ways to pull back its reliance on credit ratings. The SEC and federal regulators, as well as state and local lawmakers, have the ratings embedded in many of their rules — effectively requiring investors to trust the ratings. For the past 30 yea...

By Sarah Johnson • Feb. 14, 2008

SEC Blesses Companies that Deny Proxy Access

Shareholder activists hoping to gain wider access to corporate proxies have been dealt another setback by the Securities and Exchange Commission.The SEC told a number of companies, including Bear Stearns, JPMorgan Chase & Co., E-Trade Financial, Croghan Bancshares, and Kellwood Co., that the ...

By Stephen Taub • Feb. 12, 2008

Lerach Gets Two Years Behind Bars

Class-action lawyer William Lerach will serve two years in prison for his role in a kickback scheme at his former employer Lerach Coughlin Stoia Geller Rudman & Robbins, according to press reports. The attorney, who once led a $7 billion case against Enron, had won the ire of the corporate co...

By Sarah Johnson • Feb. 11, 2008

Faulty Forecasts on a Roll

Faulty forecasts have been the downfall of many CFOs. Last year the retirement of Motorola’s finance chief, David Devonshire, coincided with the technology company dropping its revenue projections by a billion dollars in the first quarter. At Ericsson, the telecommunications giant, the CFO depart...

By Alan Rappeport • Feb. 11, 2008

Finance Exec’s Loose Lips Sink Old Pal

You wouldn’t think finance executives need to be reminded to keep their mouths shut about the material, non-public information they normally possess. But here is yet another example that they do need reminders. The Securities and Exchange Commission has settled charges with an individual who ad...

By Stephen Taub • Feb. 11, 2008

Does Mass. Law Force Sarbox on Nonprofits?

A Massachusetts health-care workers’ union is asking board members of Beth Israel Deaconess Medical Center to apply Sarbanes-Oxley Act disclosure rules to the nonprofit hospital’s audits.The 1199 SEIU United Healthcare Workers East sent letters to 6 of Beth Israel’s 18 board members, who also ser...

By Kate Plourd • Feb. 8, 2008

City Investment Contracts Draw SEC’s Eye

The Securities and Exchange Commission is weighing whether to bring civil charges against Financial Security Assurance Holdings for bid-rigging in connection with the investments of municipalities. Financial Security, a subsidiary of Belgium-based Dexia Holdings, provides financial guaranty insu...

By Stephen Taub • Feb. 8, 2008

Restructured Products

Hounding credit-rating agencies has become the bloodsport of choice for moneymen. At a conference this week one speaker announced, to raucous laughter, that he had just received a news flash: “Moody’s has downgraded Fitch, Fitch has cut Moody’s in retaliation, and Standard & Poor’s has put it...

By Economist Staff • Feb. 8, 2008

To Catch a Country

When a federal court overturned the Securities and Exchange Commission’s plans to register hedge funds in June 2006, it seemed unlikely the regulator would ever lose a larger fight to regulate large pools of investment capital. At the time, hedge funds were estimated to control as much as $1.4 tr...

By Tim Reason • Feb. 7, 2008

SEC: And Then There Were Three

President George W. Bush rebuked the Senate on Thursday for failing to confirm more than 200 appointees to government agencies and federal courts, leaving key posts unfilled at a critical time.The deadlock has been especially draining for those responsible for handling the U.S. economy and financ...

By Alan Rappeport • Feb. 7, 2008

Donaldson Slams “Pendulum Pushers”

William Donaldson, the former Securities and Exchange Commission chairman, asserted on Wednesday that the regulatory pendulum has swung too far toward deregulation, criticizing the movement toward “vague, principles-based” financial reporting.Just as soon as the reforms instituted under the Sarba...

By David Katz • Feb. 7, 2008

How to Fix the Rating Agencies, Part II

In 2007, lawmakers waggled their fingers at the credit rating agencies for missing the mark in assessing the risks of mortgage-backed securities, a factor congressmen and senators claim partly led to the subprime-mortgage crisis. Now, nearly a year after the mortgage market meltdown, national and...

By Sarah Johnson • Feb. 7, 2008

“Sham” Licenses Cost ex-KPMG Unit Principal

The Securities and Exchange Commission has settled its three-year-old case with a former KPMG Consulting principal who was involved in Peregrine Systems’ accounting fraud. Larry Rodda has agreed to pay the SEC $80,000 to settle the charges. According to the regulator, Rodda signed four “sham” sof...

By Sarah Johnson • Feb. 6, 2008

Grant Thornton: U.K. Companies Slack on Filings

Although International Financial Reporting Standards may be simpler than America’s equivalent, that doesn’t mean they’re simple.They’re anything but, according to a recent survey by Grant Thornton’s U.K. division. The study found that nearly 60 percent of companies on the FTSE 350 claim they’re n...

By Alan Rappeport • Feb. 5, 2008

Seagate Drives Shareholder Value

Seagate Technology is stepping up with an aggressive plan to boost shareholder value.The disc-drive giant said it will increase its quarterly dividend by 25 percent, from $0.10 to $0.12 per share.At the same time, Seagate’s board of directors has authorized the repurchase of up to an additional $...

By Stephen Taub • Feb. 5, 2008

Running the SEC on the Cheap

The Bush administration is seeking a budget of $914 million for the Securities and Exchange Commission for fiscal 2009, an increase of less than 1 percent over projected spending this year of $907 million.The puny increase for the new Sept. 30 fiscal year, reported by Reuters, comes despite the S...

By Stephen Taub • Feb. 4, 2008

Step Change

In the low-lying coastal region of England’s East Anglia, climate change is already afoot. At Anglian Water, the £919m (€1.2 billion) utility that serves the region, more than 85% of the incidents that its wastewater emergency team was called on to address in the last fiscal year were weather-rel...

By Jason Karaian • Feb. 4, 2008

Sarbanes in Switzerland?

When it comes to administration, the Swiss are famous for their efficiency and attention to detail. It is somewhat surprising, then, that a number of changes to company audit law are only now coming into effect. Most notably, from January 1st 2008 auditors must verify internal control systems at ...

By Jason Karaian • Feb. 4, 2008

Welcome Aboard

In 1985, Norway’s government introduced a target of 40% female representation on public committees, a quota not met until 1997. The country’s listed companies were given less time to meet a similar quota. Under a law introduced in 2006, at least 40% of corporate board member posts were required t...

By Jason Karaian • Feb. 4, 2008