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

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

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

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

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

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

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

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 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

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

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

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

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