Debating the Need for Speed

Accelerated share repurchases (ASRs) can boost a languishing stock and lead to a sustained rise in share price, but at what cost?Companies that take the ASR route buy all the shares up front from an investment bank that has borrowed them from investors; the bank then buys the shares back on the m...

By Vincent Ryan • Dec. 1, 2007

Criminal Injustice?

Critics of criminal justice in countriesranging from the United States to Korea havelong complained of a glaring imbalance:white-collar criminals typically receive fargreater leniency than other crooks. Could asimilar inconsistency exist within companies?A new study of economic crime suggeststhat...

By Don Durfee • Nov. 30, 2007

VP of HR Faces Prison for Backdating

A former vice president of human resources at Broadcom Corp. has agreed to plead guilty to obstruction of justice in connection with a government investigation of options backdating, according to the U.S. Attorney’s Office for the Central District of California.Nancy Tullos was accused of instruc...

By Stephen Taub • Nov. 30, 2007

Officers Who Conceal Backdating, Beware

Delaware Court Chancellor William B. Chandler III, in another tough opinion in the case involving alleged stock-option backdating at Maxim Integrated Products, found that a corporate officer who knows about an improper practice but doesn’t report it could be subject to the court’s jurisdiction an...

By Roy Harris • Nov. 29, 2007

Risky Business

If a major financial crisis were to hitAsia today, the chances are that globalizingcompanies in China and Japan will find themselveswoefully unprepared. That’s the finding ofa new study by IBM, which recently polled 1,230CFOs worldwide, 25 percent of them from Asia-Pacific. “Chinese enterprises (...

By Cesar Bacani • Nov. 29, 2007

JDS Uniphase Wins Rare Securities Trial

JDS Uniphase has won a securities class-action lawsuit, which rarely get decided by a jury.On Tuesday, jurors for the U.S. District Court for the Northern District of California ruled in favor of the company on all claims filed by Connecticut Retirement Plans and Trust Funds. Nearly five years ag...

By Stephen Taub • Nov. 28, 2007

SEC Snubs Proxy Access

The Securities and Exchange Commission on Wednesday specifically authorized companies to deny including in proxy statements shareholder resolutions relating to director nominations. Supporters saw the hotly debated measure, widely known as proxy access, as a way to further democratize corporate ...

By Stephen Taub • Nov. 28, 2007

Perpetrators Punished in Share-Inflation Case

A federal court has entered a final judgment against the former CFO and CEO of a penny-stock company, who were found guilty of running a scheme to boost the company’s share price. The ex-CFO, Michael Pietrzak, and the ex-CEO, Maurice Furlong, fraudulently inflated the value Hexagon Consolidated C...

By Stephen Taub • Nov. 27, 2007

Cell Doors Stay Locked for Adelphia Duo

It looks like the aged founder of Adelphia Communications and his son won’t be getting out of prison for awhile. Their bid for a new trial was rejected on Tuesday by the judge who presided over the one in which they were convicted, the Associated Press reported.Adelphia founder John Rigas and his...

By Stephen Taub • Nov. 21, 2007

SEC Fishes for Info on Mortgage Insurers

The Securities and Exchange Commission is investigating two mortgage insurers regarding their joint investment in Credit-Based Asset Servicing and Securitization (C-BASS), a troubled investor in subprime mortgages.MGIC Investment Corp. said in a regulatory filing that the SEC requested documents ...

By Stephen Taub • Nov. 21, 2007

Investor Sues AIG over Subprime Mess

There always seem to be new problems for American International Group. On Tuesday a California shareholder filed a derivative lawsuit against the insurer and its top executives and directors over its exposure to the subprime-mortgage crisis, the Associated Press reported.The lawsuit, brought by D...

By Stephen Taub • Nov. 21, 2007

Guilty Verdict in Fake Filings

A federal jury has found Brian Adley, former chairman and CEO of Chancellor Corp., guilty of securities fraud in a rare trial arising from an SEC complaint.Adley was held liable for fabricating documents and fraudulent accounting from 1998 through 2000 in a scheme to inflate Chancellor’s reported...

By Stephen Taub • Nov. 20, 2007

The Fannie Dance

Mortgage lender Fannie Mae arranged a conference call Friday to clarify two accounting issues that affected the company’s income statement. But the analysts on the call seemed more interested in focusing on a single word — “majority” — and its effect on future losses than the columns of numbers t...

By Marie Leone • Nov. 19, 2007

GAO Finds Material Weakness in SEC’s Controls

The Government Accountability Office said Monday that the Securities and Exchange Commission had a material weakness in the internal controls over its financial reporting.The GAO’s report said that data related to accounts receivable balances is processed manually at the SEC in a manner that is p...

By Stephen Taub • Nov. 19, 2007

SEC Financial-Reporting Charges Up 59 Percent

The Securities and Exchange Commission brought 59 percent more enforcement actions involving financial disclosure and reporting in fiscal year 2007 than it did last year.The 220 enforcement actions for financial-disclosure missteps is the largest number since at least 2001, far outstripping the 1...

By Sarah Johnson • Nov. 16, 2007

This Case Is Closed, Mac

Another allegation of stock-option backdating has been dismissed, this time by a judge rather than the Securities and Exchange Commission.A shareholder group led by the New York City Employees’ Retirement System had sued Apple Inc., claiming the company had diluted its stock’s value through its a...

By Stephen Taub • Nov. 16, 2007

More Backdating Cases Go Poof

VeriSign Inc. said in a regulatory filing Thursday that the Securities and Exchange Commission has dropped an investigation into the company’s historical stock option granting practices without bringing charges. It was the sixth company to make such an announcement since late October. Triquint S...

By Stephen Taub • Nov. 15, 2007

Tyco’s Dynamic Duo Staying Behind Bars

It looks like former Tyco bigwigs Dennis Kozlowski and Mark Swartz will be calling prison home for awhile.A New York State appeals court on Thursday unanimously upheld their convictions for conspiracy, grand larceny, securities fraud, and falsifying business records, according to the Associated P...

By Stephen Taub • Nov. 15, 2007

SEC Decision Draws Cheers

The Securities and Exchange Commission’s decision to drop reconciliation requirements for international companies filing financial statements in the United States using International Financial Reporting Standards (IFRS) drew immediate praise from industry groups on Thursday.The U.S. Chamber of Co...

By Alan Rappeport • Nov. 15, 2007

Chevron Next to Pay Up in Oil for Food Scheme

Chevron Corp. is the latest company to settle charges that it made illegal payoffs to the former government of Iraq in connection with the United Nations’ Oil for Food Program. To settle civil and criminal charges filed against it by a number of federal agencies, Chevron will pay $30 million, c...

By Stephen Taub • Nov. 14, 2007

The Dark Side of Global Accounting Standards

If the Securities and Exchange Commission on Thursday votes as expected and allows non-U.S. issuers here to report their financials in line with International Financial Reporting Standards without reconciling them with Generally Accepted Accounting Principles, the United States will have crossed ...

By David Katz • Nov. 14, 2007

Forgery, Theft Net 70 Months in Jail

A former finance executive at a small South Carolina company was sentenced to 70 months in prison for stealing $7 million from her former employer. Angela Timmons, who was an account manager and finance director from 1997 through 2006 at Peace Textile, also must transfer to the company personal ...

By Stephen Taub • Nov. 14, 2007

New Trial Date Set for Ex-Symbol CFO

A federal judge has set May 5 as the date for retrial of former Symbol Technologies CFO Kenneth Jaeggi for his alleged role in the company’s massive accounting scandal earlier in the decade.Jaeggi, senior vice president of finance Michael DeGennaro, and senior vice president and general manager ...

By Stephen Taub • Nov. 12, 2007

SEC Enforcement Actions Shoot Up

Increases in backdating and insider-trading cases have kept Securities and Exchange Commission enforcers busier this year. The SEC has filed 14 percent more enforcement cases in its most recent fiscal year, according to Bloomberg. The commission brought 656 cases accusing companies of violating s...

By Sarah Johnson • Nov. 12, 2007

SEC, Former Exec Settle Finite Insurance Charges

The Securities and Exchange Commission and a former senior executive of a RenaissanceRe Holdings subsidiary have settled accounting fraud charges against the executive that stemmed from the finite insurance scandal.Without admitting or denying the commission’s charges, Michael Cash, the former se...

By Stephen Taub • Nov. 8, 2007