Alcatel-Lucent Settles Its Own “Travel-Gate”

Alcatel-Lucent has agreed to pay $2.5 million to settle bribery charges with United States federal regulators. The French telecommunication giant will pay a $1.5 million civil penalty to the Securities and Exchange Commission and a $1 million fine as part of a non-prosecution agreement with the U...

By Stephen Taub • Dec. 26, 2007

Ex-CFO Bagged for Fraud

The former finance chief of a handbag company was arrested for defrauding his one-time employer out of more than $4 million. Martin Bonder, the ex-chief financial officer of New York City-based Victim Co., was charged with one count of wire fraud.If convicted, he faces a maximum sentence of 20 ye...

By Stephen Taub • Dec. 26, 2007

SEC Targets WaMu over Home Loans

The Securities and Exchange Commission is investigating how Washington Mutual, the nation’s largest savings and loan, handled mortgages that may have been based on inflated home appraisals, the Associated Press reported.“After spending a month and a half investigating these allegations, we can sa...

By Stephen Taub • Dec. 21, 2007

Securities Suits Spike in 2007

The lawyers must be loving it. The number of securities class-action lawsuits rose sharply in 2007, after an 18-month decline that some had called a “permanent shift” away from such litigation.A report published Friday by NERA, an economic consultancy, found that federal filings in 2007 are expec...

By Alan Rappeport • Dec. 21, 2007

SEC Issues Alert on Stock-Option Expensing

The Securities and Exchange Commission has issued a staff bulletin that allows some companies to continue using the simplified method of estimating stock-option expenses.Nearly three years ago, the SEC said publicly traded companies would have to stop valuing their share-option grants using the s...

By Sarah Johnson • Dec. 21, 2007

Ex-Brocade CEO’s Sentencing Is Put on Hold

The sentencing of former Brocade Communications Systems Inc. CEO Gregory Reyes has been postponed again — this time indefinitely, while the court hears arguments by defense lawyers seeking a new trial.According to the Associated Press, a hearing has been set for Jan. 9 on Reyes’s new-trial motion...

By Stephen Taub • Dec. 20, 2007

CA Shareholders Teased with Restitution Payments

A calculation error is forcing former CA shareholders to return some of the money they received from a restitution fund created to redress the company’s massive accounting scandal. The 88,444 ex-shareholders were overpaid by $59.2 million, Newsdayreported, citing a letter sent to the recipients a...

By Stephen Taub • Dec. 20, 2007

The Finger of Suspicion

Financial firms have already been drenched by mortgage-related losses. Now a wave of litigation threatens to assail them. According to RiskMetrics, a consulting firm, between August and October federal securities class-action lawsuits were filed in America at an annualized pace of around 270—more...

By Economist Staff • Dec. 20, 2007

Yet Another Guilty Plea in Refco Fraud

Another former executive of Refco Group, the defunct commodities brokerage, has pleaded guilty to criminal fraud charges. Santo Maggio, who was CEO of the Refco Securities subsidiary, admitted conspiring with other one-time company leaders to commit securities fraud, wire fraud, and bank fraud; l...

By Stephen Taub • Dec. 19, 2007

House Extends Terror Insurance Act

The House of Representatives decided Tuesday to extend the Terrorism Risk Insurance Act, or TRIA, for seven more years by a vote of 360 to 53. It now goes to the president, who is expected to sign the extension into law. The act serves as a federal financial backstop in the event of a catastrophi...

By Alan Rappeport • Dec. 19, 2007

Deutsche Bank Settles with Enron

Deutsche Bank AG agreed to pay $25 million as part of its settlement in the so-called MegaClaims litigation, in which creditors of Enron sued numerous banks for contributing to the company’s demise.In addition, Deutsche Bank entities will receive about $35 million for their remaining interests in...

By Stephen Taub • Dec. 19, 2007

Book Is Thrown at Lawyer for Refco

Both criminal and civil charges have been filed against a partner at law firm Mayer Brown for allegedly participating in the fraud several years ago by Refco Group, the one-time commodities brokerage giant.Joseph Collins criminally conspired with several former Refco executives, including CEO Ph...

By Stephen Taub • Dec. 18, 2007

SEC Commissioner Rails Against PCAOB Salary Hikes

The Securities and Exchange Commission on Tuesday approved the Public Company Accounting Oversight Board’s request for a 6 percent budget increase. But the thumbs-up for the $144.6 million budget for 2008 came with reservations, particularly from commissioner Paul Atkins, who voted against it. At...

By Sarah Johnson • Dec. 18, 2007

Enron Payout Sparks Plaintiff Tug-of-war

How do you divide $7.8 billion among 1.5 million people who hold claims to the cache? That’s the dilemma facing U.S. District Judge Melinda Harmon, who must decide how to distribute the sum recouped for shareholders of Enron that were part of a class-action lawsuit.Lawyers for the lead plaintiffs...

By Stephen Taub • Dec. 17, 2007

Subprime Lending with Criminal Intent?

Fallout from the subprime-mortgage mess has spread from corporate balance sheets and civil actions by regulators into the criminal arena.Countrywide Financial Corp., the nation’s number-one mortgage lender, is being investigated by the attorneys general of Illinois and California for its past len...

By Stephen Taub • Dec. 14, 2007

Bookkeeper Gets Shockingly Long Prison Term

A former bookkeeper for a Florida accounting firm was sentenced to 15 years in prison after admitting to stealing more than $600,000 from a client, The Palm Beach Post reported.Glenda Mancil tearfully told Judge Dwight Geiger she was addicted to taking up to $20,000 at a time and was afraid her b...

By Stephen Taub • Dec. 14, 2007

School’s Out Forever

The chief financial officer of a Georgia university abruptly retired amid a state probe into the possible misuse of a state credit card. James Brignati, vice president for business and finance at Armstrong Atlantic State University in Savannah, allegedly charged thousands of dollars for plane ti...

By Stephen Taub • Dec. 13, 2007

Ex-CFO Admits Faking SEC Filings

A former CFO of United Rentals pleaded guilty to making false filings with the Securities and Exchange Commission and could get up to 10 years in prison and a $22 million fine. The ex-executive, Michael Nolan, also must pay restitution of about $11 million. Despite his guilty plea in the criminal...

By Stephen Taub • Dec. 13, 2007

Shareholders Win Huge Settlement from Sprint

A Kansas state judge gave final approval to a $57.5 million settlement over Sprint Nextel’s combination of its tracking stocks three years ago, the Associated Press reported. “It is one of the largest payments on record in a lawsuit stemming from breach of fiduciary duty,” said law firm Grant &a...

By Stephen Taub • Dec. 13, 2007

Beazer Investors Get Their Say on Disclosure

A union activist investor has won the right to push for more disclosure by Beazer Homes USA. The Securities and Exchange Commission ruled that the embattled homebuilder must include in its 2008 proxy materials a shareholder resolution submitted by the Laborers’ International Union of North Americ...

By Stephen Taub • Dec. 12, 2007

SEC: More Disclosure on Loan Exposure

The Securities and Exchange Commission plans to urge financial services companies, including banks and insurance firms, to disclosure more information about their exposure to potentially problematic loans in light of the massive number of gargantuan write-offs caused by the sub-prime lending cri...

By Stephen Taub • Dec. 11, 2007

SEC Eyes Revision for Outdated Energy Rules

The Securities and Exchange Commission is responding to demands to update its disclosure rules for oil and gas companies. In a first step toward enabling such companies to disclose their reserves more accurately, the SEC will issue a concept release to formally gauge interest and collect advice o...

By Sarah Johnson • Dec. 11, 2007

Conrad Black Sentenced in Fraud Case

Conrad Black will be spending less time in prison than some experts had predicted. The one-time media mogul was ordered to serve 6.5 years in prison by U.S. District Judge Amy St. Eve for stealing millions of dollars from a company he had controlledThe judge had said earlier in the sentencing pro...

By Stephen Taub • Dec. 10, 2007

FBI-SEC Action Leads to Kickback Cases

Federal regulators, targeting five separate schemes that involved penny stocks and alleged kickbacks to a fictitious hedge fund, have criminally indicted six individuals and filed civil charges against 10 individuals or companies they controlled.The Securities and Exchange Commission said the sch...

By Roy Harris and Stephen Taub • Dec. 10, 2007

SEC Ends Probe of XM Satellite Radio

The Securities and Exchange Commission has finished its investigation of how XM Satellite Radio handles subscriber data, stock options, and other matters and won’t pursue enforcement actions, according to the radio company. In September 2006, XM reported that the SEC launched an informal inquiry...

By Stephen Taub • Dec. 10, 2007