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

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 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

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

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

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

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

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

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

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

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