Peregrine Exec Admits Lie to FBI

A former executive of Peregrine Systems pleaded guilty to one count of lying to the FBI during an investigation into the software company’s massive accounting scandal earlier in the decade, the San Diego Union-Tribune reported. Gary Lenz is the 12th individual to plead guilty to charges related...

By Stephen Taub • Jan. 17, 2008

SEC Goes Aeropostale

Aeropostale Inc. said on Wednesday that the Securities and Exchange Commission has launched a formal investigation into the circumstances surrounding the November 2006 firing of Christopher Finazzo, who was executive vice president and chief merchandising officer.The company said at the time Fina...

By Stephen Taub • Jan. 17, 2008

First Convicted Backdater Sentenced to Prison

The former chief executive officer of Brocade Communications Systems was sentenced to 21 months and prison and ordered to pay a $15 million fine. He is the first executive to go to trial and be convicted for orchestrating a scheme to illegally backdate stock options.According to The Wall Street J...

By Stephen Taub • Jan. 16, 2008

Verdict Nicks Apollo as Plaintiffs Rebound

After being beaten down on Tuesday by the Supreme Court, investors filing civil lawsuits came out on top in a federal court case against Apollo Group Inc., the for-profit company that owns the for-profit University of Phoenix.A U.S. district court jury in Phoenix ruled that Apollo fraudulently mi...

By Roy Harris • Jan. 16, 2008

Ex-PwC Pals were Inside Traders, SEC Says

The Securities and Exchange Commission charged two former employees of PricewaterhouseCoopers with insider trading Tuesday, accusing them of using client information to buy stock prior to corporate takeovers. PwC reported the co-workers, who were friends, to the SEC.Gregory Raben, 30, formerly an...

By Alan Rappeport • Jan. 15, 2008

Plaintiffs’ Bar 0, Corporate Defendants 5

By ruling in the StoneRidge v. Scientific-Atlanta case that third parties complicit in corporate wrongdoing are not liable without themselves directly misleading investors, the Supreme Court has continued a “campaign to render the private cause of action under [the fraud law] toothless,” Justice ...

By Roy Harris • Jan. 15, 2008

Insider-Trading Conviction Scrapped

A federal appeals court has overturned the conviction of Homestore Inc. founder Stuart Wolff, who had been sentenced to 15 years in prison for insider trading, ruling that the trial judge should have recused himself because he had a financial interest in the case, the San Francisco Chronicle rep...

By Kate Plourd • Jan. 15, 2008

Supreme Court Raises Bar for Class Actions

In a closely watched decision, the U.S. Supreme Court created new barriers to investors suing companies for alleged fraud aimed at inflating stock prices.The 5-3 ruling, with the majority opinion written by Justice Anthony Kennedy, gave a measure of protection from securities suits to suppliers, ...

By Roy Harris • Jan. 15, 2008

Investors Say Vote on Delphi Exit Plan Is Rigged

A group of investors is opposing Delphi Corp.’s reorganization plan, which could further delay the auto parts company’s emergence from bankruptcy.The investor group, which is composed of senior noteholders, asserts that the plan provides an unacceptable windfall to another investor group led by ...

By Stephen Taub • Jan. 15, 2008

Ex-CA Chief Pays Final Fraud Bill

Sanjay Kumar, the jailed former chief executive of Computer Associates, has made his final $2 million payment as part of his restitution for the software company’s $2.2 billion accounting fraud, Newsday reported.The payment — made one year ahead of schedule — ends a freeze that had been placed o...

By Stephen Taub • Jan. 14, 2008

SEC Committee Tackles Second-Guessing

A committee tapped to cut complexity in financial reporting will ask the Securities and Exchange Commission to help companies defend their accounting interpretations against second-guessing by regulators and auditors.If the SEC takes up the committee’s recommendations, the regulator would weigh i...

By Sarah Johnson • Jan. 11, 2008

Parmalat Investors to Get $.06 on the Dollar from Deloitte

Deloitte & Touche has reached a settlement with a committee representing bondholders of Parmalat, the Italian food company that went bankrupt nearly four years ago. Deloitte was the auditor of Parmalat at the time it nearly collapsed in the wake of a scandal in which it misappropriated billi...

By Stephen Taub • Jan. 10, 2008

No New Trial for Reyes Despite Witness Recant

The first executive to be convicted in a trial over the backdating of stock options will not get a new day in court. U.S. District Court Judge Charles Breyer denied a motion for a new trial by former Brocade Communications Systems CEO Gregory Reyes, even though a key prosecution witness supposed...

By Stephen Taub • Jan. 10, 2008

Early Thaw Sought for Frozen Options

The former CEO of UnitedHealth Group wants some of his stock options that had been frozen by a court order now that he has agreed to a settlement with his ex-employer. William McGuire is appealing the late December ruling by U.S. District Judge James Rosenbaum that about $800 million worth of hi...

By Stephen Taub • Jan. 9, 2008

Nonprofit Destroyed by Accountant’s Love Life

A human rights group was forced to shut down after a court convicted its former finance manager of embezzling $1.8 million to support his mistress.On Tuesday a court in Vienna sentenced the 43-year-old ex-accountant of the Helsinki Federation for Human Rights to three years in jail and his girlfr...

By Stephen Taub • Jan. 9, 2008

Rhino Trading Ruled Illegal

A federal district judge has convicted a registered representative of Wachovia Securities in an insider-trading scheme — one that, like numerous cases this year, involved information passed between family members or close friends. Mark Michel illegally traded in the shares of Blue Rhino Corp. in ...

By Stephen Taub • Jan. 7, 2008

Bid-Rig Scheme Involved Marsh, Suit Claims

Insurance broker Marsh & McLennan asked Great American Insurance Group to rig a bid to a potential customer, according to a lawsuit filed by Massachusetts Attorney General Martha Coakley, though Marsh is not named as a defendant. According to the complaint, Great American, at Marsh’s request...

By David McCann and Stephen Taub • Jan. 7, 2008

Unreality TV? Comcast Accused of False Statements

A class-action lawsuit accuses Comcast Corp. of making misleading statements to investors over its growth prospects.Coughlin Stoia Geller Rudman & Robbins LLP, the law firm representing the plaintiffs, says the suit was filed on behalf of investors who owned the cable giant’s stock between Fe...

By Stephen Taub • Jan. 4, 2008

Testing the Waters

“Be fearful when others are greedy and be greedy when others are fearful.” Thus wrote Warren Buffett in the 2006 annual report of Berkshire Hathaway, his holding company. True to his maxim, in the last week of December Mr Buffett splashed out $4.5 billion for a majority stake in Marmon Holdings, ...

By Economist Staff • Jan. 3, 2008

Syms Shareholders Decry Delisting Plan

Syms stockholders apparently believe an educated investor makes the best shareholder. An investor group led by activist hedge fund Barington Capital Group and Esopus Creek Advisors sent a letter to the clothing company’s board urging it to reconsider its recent decision to deregister its common ...

By Stephen Taub • Jan. 2, 2008

One-Time Nonprofit CFO Admits Lying to Feds

The former finance chief of a not-for-profit cancer research institute pleaded guilty Wednesday to federal obstruction-of-justice charges, admitting that he repeatedly lied to government agents. Roy Victor, who had served as chief financial officer of the Valhalla, N.Y.-based Institute for Cance...

By Stephen Taub • Jan. 2, 2008

Saving Face Time

Despite the dire predictions that accompanied the introduction of Reg FD eight years ago, face time apparently hasn’t lost its value. Institutional investors say that a broker’s ability to provide access to a company’s senior management greatly affects decisions about which brokerage house to use...

By Alix Stuart • Jan. 1, 2008

Expenses Land Execs in SEC Doghouse

The Securities and Exchange Commission entered final judgments against two former finance executives whom it charged with a fraudulent scheme to hide expenses at a national restaurant chain.Greg A. Gadel, the former CFO of Buca Inc., the parent of the Buca di Beppo restaurant chain, was barred hi...

By Stephen Taub • Dec. 28, 2007

2008 Dividends Still on the Rise

S&P 500 companies paid out $246.6 billion in dividends in 2007, up 11.5 percent from $224.8 billion in 2006.Standard and Poor’s expects those numbers to increase: it predicts total cash dividend payments among the 500 companies will rise another 9.3 percent in 2008. That assessment could be h...

By Stephen Taub • Dec. 28, 2007

Maryland Takes Control of Corporate Unit

ACA Capital Holdings said that Maryland insurance regulators will oversee the activities of its bond insurance unit. In a regulatory filing, the specialty finance company said that its subsidiary, ACA Financial Guaranty, agreed not to engage in “certain material transactions” without providing pr...

By Stephen Taub • Dec. 27, 2007