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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Newest IMAX Accounting Gaffe: Real Estate

Adding to a seemingly nonstop series of accounting problems, IMAX Corp. says it will restate its financial statements for 2006 and the first two quarters of 2007 due to improper accounting of seven real estate leases. The total amount of the revision will be between $5.5 million and $6.5 million,...

By Stephen Taub • Oct. 5, 2007

SEC Balks at Split-Trial Idea in Fraud Case

The Securities and Exchange Commission has asked a judge to deny two former Qwest Communications managers’ request to have their civil charges addressed separately from that of their former bosses, ex-CEO Joseph Nacchio and ex-CFO Robert Woodruff.In a brief filed in the U.S. District Court for th...

By Sarah Johnson • Oct. 5, 2007

Pension Fund to Review Countrywide’s Books

A Delaware judge has ordered Countrywide Financial Corp. to provide detailed information about its stock options granting practices to a pension fund that filed a lawsuit claiming the company distributed executive stock rights at “unusually suspicious and lucrative times,” according to the Los A...

By Stephen Taub • Oct. 4, 2007

Ten Ways to Defuse Shareholder Activists

Today’s new breed of activist investor uses modern methods to put corporate leaders in the crosshairs: blogs on the Internet, wikis, and video that helps them create what corporate communications firm Brunswick Group calls “a wolfpack mentality.” And to help executives understand and counter the...

By Alan Rappeport • Oct. 4, 2007

Cheney Blamed CFO for Halliburton Impropriety

Vice President Dick Cheney, in sworn testimony to the Securities and Exchange Commission in 2004, blamed former Halliburton Co. finance executives for questionable accounting practices, and said he had no “specific recollection” of an alleged conversation with the defense contractor’s former CFO ...

By Stephen Taub • Oct. 3, 2007

Enron: Citigroup Muzzles Employees

Enron has accused Citigroup of preventing its former employees from testifying on what they know about the bank’s involvement with the former energy giant before it plunged into bankruptcy in late 2001.A lawyer representing Enron’s creditors filed a letter on Monday with the U.S. Bankruptcy Cour...

By Stephen Taub • Oct. 3, 2007

SEC Settles Disclosure Beef with Tidewater and Its CFO

The Securities and Exchange Commission issued a cease-and-desist order against Tidewater Inc. and chief financial officer James Lousteau over alleged inaccurate disclosures related to vessels taken out of service. The regulator said Tidewater, an operator of offshore service vessels, filed finan...

By Stephen Taub • Oct. 3, 2007