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

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

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

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

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

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

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

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

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

Other People’s Money

Investors often cheer when companies buy back their own shares, and sometimes it sends an even more bullish signal when directors dip into their own pockets to purchase company stock.Investec Private Bank hopes to make it easier for CFOs to buy their own companies’ shares. Two years ago, the Angl...

By Eila Rana • Dec. 10, 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

CFO Points Finger at Ex-Employer

A former finance chief for Apollo Group testified that the company kept secret a seemingly damaging report about its pay policy, Bloomberg reported. Kenda Gonzales, who in November 2006 resigned as CFO of the company best known for owning the for-profit University of Phoenix, told a jury in a se...

By Stephen Taub • Dec. 7, 2007

Hedge Fund Favors Flushing Poison Pill

A prominent hedge fund is calling on PeopleSupport Inc. to rescind its poison pill or amend it in a way that would allow more potential acquirers to make a bid for the company. IPVG Corp. and AO Capital Partners last week made an unsolicited bid to acquire PeopleSupport in an all-cash transactio...

By Stephen Taub • Dec. 6, 2007

The $468 Million Clawback

William McGuire, the former CEO of UnitedHealth Group, has agreed to pay a whopping $600 million to settle claims with federal regulators and his former employer over the company’s illegal backdating of stock options.Under Section 304 — the “clawback” provision — of the Sarbanes-Oxley Act, McGuir...

By Stephen Taub • Dec. 6, 2007

The Risks of Not Being Green

Pressure from institutional investors and state governments has compelled corporations in recent years to beef up their efforts to curb carbon emissions and fulfill disclosure requirements to share their environmental risks in their financial reports.Now, the heat is rising even faster. As deman...

By Sarah Johnson • Dec. 6, 2007

Backdating Bites Another HR Exec

A second former executive at Brocade Communications Systems was found guilty in a case involving the backdating of stock-option grants to employees.Stephanie Jensen, who was the company’s vice president of human resources, was convicted following a two-week jury trial on one count of conspiracy a...

By Stephen Taub • Dec. 6, 2007

Legal Separation for Insider-Trading Couple

A former Morgan Stanley finance executive and her husband were each sentenced to 18 months in prison for trading on insider information relating to acquisitions of three publicly traded companies. Jennifer Wang, a former Morgan Stanley finance department executive, and her husband, Rubin Chen, a...

By Stephen Taub • Dec. 5, 2007

Ex-Maxim CFO Won’t Settle

The Securities and Exchange Commission has charged Maxim Integrated Products and its former CEO and CFO with reporting false financial information to investors by improperly backdating stock-option grants. The company as well as ex-CEO John Gifford agreed to settle the charges, but the former CF...

By Stephen Taub • Dec. 5, 2007