Risk Manager Settles Insider Charges

The Securities and Exchange Commission has settled insider trading charges against the former executive vice president of Countrywide Financial Corp.’s Portfolio Risk Management group. The commission alleged that Quan Zhu, who worked for the financial services firm from 1998 until he was fired in...

By Stephen Taub • Oct. 30, 2007

Big Headache or Big Bang?

Attempts by Brussels to reform anything are not often greeted with shrieks of joy in the finance industry; the more usual reaction is either boredom or bitter complaints from those developing an unwanted intimacy with the compliance department. The reaction to a new law on financial markets, due ...

By Economist Staff • Oct. 29, 2007

SEC Probe of Jones Soda Fizzles

The Securities and Exchange Commission has terminated an informal investigation of Jones Soda Co. and does not intend to recommend any enforcement action. The company said the probe related to trading by some company officers and directors.The SEC advised Jones of its decision in a letter receive...

By Stephen Taub • Oct. 29, 2007

Connecticut Goes after Ratings Agencies

The Attorney General of the State of Connecticut , Richard Blumenthal, has issued subpoenas to credit-rating agencies Standard & Poor’s, Moody’s, and Fitch as part of an antitrust investigation into the industry, he confirmed Friday in a statement.“The debt rating industry is a highly concent...

By Alan Rappeport • Oct. 26, 2007

No Protection Against Massive-Fraud Charges

The Justice Department indicted two former officers of a body armor company insider trading, fraud, obstruction of justice, and taxevasion. David Brooks, former CEO of DHB Industries, and Sandra Hatfield, former chief operating officer, already had been indicted for securities fraud in August 20...

By Stephen Taub • Oct. 25, 2007

PAC Man Heads Behind Bars

A former Lockheed Martin finance employee who oversaw the company’s political action committee was sentenced to 16 months in prison for stealing $160,000 and lying to a government agency. Kenneth Phelps III, who was deputy manager and treasurer for Lockheed’s PAC, had pled guilty in July to 12 c...

By Stephen Taub • Oct. 24, 2007

Running a Close Race

Companies around the world race to close their books at the end of the year, but those in some places are having more success than others.A new study by BPM International and the Paragon Consulting Group, both British consultancies, compares the close times of firms in the United States, Britain,...

By Alan Rappeport • Oct. 19, 2007

Appraising the Roof

Despite early predictions of an unusually active season, most hurricanecoverage this year (as of press time, anyway) has been devoted to Katrinaretrospectives rather than the chronicling of fresh disasters. If history is any guide, that means that most businesses will slipinto a reflexive complac...

By Scott Leibs • Oct. 19, 2007

CFO’s 25-Year Sentence Upheld on Appeal

A federal appeals court had upheld the 25-year prison sentence of the former chief financial officer of a Texas energy company. Jonathan Dwane Nelson, who last year pled guilty to embezzling $77 million from Patterson-UTI Energy, had argued that his prison term fell outside federal sentencing gu...

By Stephen Taub • Oct. 18, 2007

A D&O Dilemma

Flashy settlements and harsh-worded rulings may rebuke corporate leaders, but they are unlikely to have an immediate impact on the price of the insurance that covers them. But continuing fallout from the subprime mortgage crisis could be another matter, experts say.High-profile decisions have tak...

By Alan Rappeport • Oct. 17, 2007

Swiss Misstep: SEC Charges 3 with Fraud

The Securities and Exchange Commission on Wednesday filed civil fraud charges against three former finance executives of a Swiss public company for allegedly misstating financial results. The three accused were Urs Kamber, former CFO of medical device maker Centerpulse Ltd.; former controller Ste...

By Stephen Taub • Oct. 17, 2007

Fees Under Fire

Even as Congress examinescurrent 401(k) plan feestructures, companies mayhave plenty of incentive torevisit the issue now ratherthan wait for any resultinglegislative changes. Thatincentive comes in the form ofclass-action lawsuitslaunched against a number oflarge companies, including Lockheed Ma...

By Kate Plourd • Oct. 16, 2007

Keeping Shareholders in Their Place

“Having told everyone in the world that there is no such thing as shareholder democracy in America, and that to change things they had to do lawsuits, I now discover I can’t even bring a lawsuit,” complains Bob Monks. Last month a judge in Massachusetts ruled that Mr Monks could not lead a class-...

By Economist Staff • Oct. 15, 2007

Theft of Options Brings Stiff Sentence

Let this be a lesson to you: If you’re going to steal something, don’t forget to pay income taxes on it. A former stock options administrator was sentenced to 46 months in prison for wire fraud and tax evasion in connection with the theft of options. Vencent Donlan, formerly with Wireless Facil...

By Stephen Taub • Oct. 15, 2007

Applebee’s Must Serve Up More Sale Info

Applebee’s International has agreed to settle a class-action lawsuit filed by a union that asserted the casual dining chain is better off independent than going through with its deal to be bought by IHOP.Under the agreement with the New Jersey Building Laborers Pension and Annuity Funds, which br...

By Stephen Taub • Oct. 15, 2007

Nortel Settles Fraud Suit with $35M

Nortel Networks announced Monday that it will pay the Securities and Exchange Commission $35 million to settle accounting fraud charges. The Canadian telecommunications equipment maker has not admitted or denied the SEC’s accusations but agreed to periodically update the commission on progress ma...

By Sarah Johnson • Oct. 15, 2007

Amicus Interruptus

If boards are in bed with management, recentDelaware Chancery Court rulings may go some way towardpulling back the sheets. Recent decisions suggest that thejudges’ patience has worn thin when it comes to stockoptiondating games, executive perks, director conflicts ofinterest, and self-serving neg...

By Roy Harris • Oct. 15, 2007

A Break for Alien Workers and Their Employers

A federal judge in San Francisco has struck down a government initiative that would make businesses criminally liable for not proving, within 90 days of receiving a “no-match” letter from the Social Security Administration, that an employee has legal authorization to work in the United States.U.S...

By Kate Plourd • Oct. 12, 2007

View from the Top

Banking crises and property crashes often go hand in hand. That is one reason why America’s housing bust has so troubled investors and policymakers recently. Commercial property, too, has a history of boom and bust that has brought havoc to the financial markets: think of the Japanese property sl...

By Economist Staff • Oct. 11, 2007

CA Told It Can’t Sue Wang and Ex-CFO

CA Inc. on Wednesday suffered a setback in its attempt to alter a 2003 shareholder settlement agreement so it could sue former top executives who were not part of the deal, including a former chief financial officer. Federal judge Thomas Platt told CA it missed its chance three years ago to alte...

By Stephen Taub • Oct. 11, 2007

Bad Play: Mattel Sued for Keeping Mum on Toy Defects

Mattel shareholders have filed a derivative lawsuit alleging that the company regularly delayed contacting federal regulators about possible defects in its toys after learning about the problems. Some of the delays date back to the 1990s, the suit claims. The lawsuit was filed in Delaware Chance...

By Stephen Taub • Oct. 10, 2007

SEC on Pay Disclosure: Less Conversation, More Analysis

The Securities and Exchange Commission has summarized its take on the first year of its compensation disclosure rules. In essence, the SEC wants more analysis of how and why companies pay their top executives but also wants the information presented in a tighter, more concise way.On Tuesday, the ...

By Sarah Johnson • Oct. 9, 2007

Investor Lawsuit Against H&R Block Is Dismissed

A federal judge has thrown out a class-action lawsuit filed by a pension fund alleging that H&R Block misled investors about its legal problems, according to published reports. The complaint, brought by several individual shareholders and the Iron Workers Local 16 Pension Fund, alleged that B...

By Stephen Taub • Oct. 9, 2007

SafeNet’s Ex-CFO Pleads Guilty to Backdating

A former chief financial officer of SafeNet Inc. has pleaded guilty to securities fraud in connection with the backdating of millions of dollars’ worth of stock option grants. Carole Argo, who left her position as president and chief operating officer of SafeNet last October, faces a maximum pena...

By Stephen Taub • Oct. 9, 2007

The StoneRidge Case: Whom Do You Trust?

On Tuesday, the Supreme Court justices will listen to arguments in a case that could have a wide effect on how companies do business with each other. What’s more, a majority opinion issued against the vendors in the case could even affect interpretations of the Sarbanes-Oxley Act, theorizes Steph...

By Sarah Johnson • Oct. 9, 2007