AFC Beats Insurer in D&O Case

A federal court has ordered the former insurance carrier of AFC Enterprises to pay the company $24 million in a dispute involving its directors’ and officers’ liability policy, AFC says.The franchisor and operator of Popeyes Chicken & Biscuits had sued Executive Risk Indemnity, a unit of Chub...

By Stephen Taub • Sept. 28, 2007

Dell, Oracle Open Political Books

Dell and Oracle are two of the latest companies to adopt political disclosure and accountability policies as a way of giving shareholders a better picture of how much they donate to campaigns. Thirty-three corporations have adopted political-disclosure policies since 2005, according to the Center...

By Kate Plourd • Sept. 28, 2007

Insider Trading: The SEC’s Friends and Family Project

Continuing its recent crackdown, on Thursday the Securities and Exchange Commission settled two more complaints involving illegal insider-trading schemes. While former SEC complaints charged husband-and-wife teams, the current settlements involve multiple family members and close friends.In one c...

By Stephen Taub • Sept. 28, 2007

Ex–New Mexico Treasurer Sentenced to Prison

Former New Mexico treasurer Michael Montoya was sentenced to 40 months in prison and fined $25,000 for his role in a kickback scheme, the Associated Press reported. Montoya pleaded guilty almost two years ago to a federal racketeering charge as part of an agreement with federal prosecutors in a c...

By Stephen Taub • Sept. 27, 2007

Does the SEC Have the Clout to Rule the Rating Agencies?

During a Wednesday hearing, Securities and Exchange Commission chairman Christopher Cox deflected senators’ concerns that the SEC may not have the authority to intervene if a credit rating agency continually issues false assessments.He reminded the members of the U.S. Senate Committee on Banking,...

By Sarah Johnson • Sept. 27, 2007

Sprint Nextel Loses One, Wins One

Sprint Nextel Corp. said it would pay $57.5 million to settle a class-action lawsuit that stemmed from the 2004 combination of its two tracking stocks. Separately, the company won a $69.5-million patent-infringement verdict over Vonage Holdings Corp. in a Kansas City, Kans., federal-court jury tr...

By Roy Harris and Stephen Taub • Sept. 26, 2007

Fresh Start? SEC Reanoints Rating Agencies

The Securities and Exchange Commission Monday formally returned to seven major credit rating agencies their status as “nationally recognized statistical rating organizations.”That was good news for the rating agencies, still smarting from the criticism heaped on them for being slow to respond to ...

By Tim Reason • Sept. 25, 2007

Hooking Up

Investors look forward to research from Dresdner Kleinwort strategist Albert Edwards as much for its humour as its financial insight. One popular note mixed Edwards’ thoughts on asset allocation with his speed-dating experience, meeting with a group of singles for rapid-fire dates that last for o...

By Jason Karaian • Sept. 24, 2007

Signs of Life: Securities Suits Rise

When William Lerach, the class-action lawyer who won more than $7 billion for Enron investors, pleaded guilty this week to criminal conspiracy charges, plaintiffs’ attorneys everywhere felt a chill run up their spine. The investigation into his former law firm, Milberg Weiss LLP, for allegedly pa...

By Alan Rappeport • Sept. 21, 2007

Congress Defies Bush on Terror Insurance

Two days after the Bush Administration said it would veto an extension of the Terrorism Risk Insurance Act (TRIA), the U.S. House of Representatives passed a bill that would extend the program through 2022.Passed by 312 to 110 with bipartisan support, the Terrorism Risk Insurance Revision and Ext...

By Kate Plourd • Sept. 21, 2007

Apple’s Jobs Was Subpoenaed, Report Says

The Securities and Exchange Commission has subpoenaed Apple Inc. CEO Steve Jobs to give a deposition in the SEC’s stock-options backdating lawsuit against former Apple general counsel Nancy Heinen, according to a Bloomberg News report citing “two people familiar with the matter.”An SEC spokesman ...

By Roy Harris • Sept. 20, 2007

Siemens Boosts Legal, Compliance Role

Siemens AG, trying to move beyond a bribery and corruption scandal, created a new executive-board position overseeing legal and compliance matters, and increased the compliance role of chief financial officer Joe Kaeser. The naming of Peter Y. Solmssen to become general counsel of the executive b...

By Stephen Taub • Sept. 19, 2007

Delaware Court Slaps Staples on Backdating

A judge in Delaware’s Court of Chancery, extending a string of rulings that have been tough on managements and corporate boards, said that Staples Inc. must stand trial in a shareholder lawsuit targeting past stock-option-granting practices.The office-supply retailer had asked Vice Chancellor St...

By Roy Harris and Stephen Taub • Sept. 19, 2007

COSO Needs a Cookbook

At the end of May, the Securities and Exchange Commission finally weighed in with a guide to help corporations comply with Sarbanes-Oxley’s internal-controls proviso. When the SEC followed that up in July by okaying a revised dictum on how auditors should comply, those two documents seemed to be ...

By David Katz • Sept. 18, 2007

Report: SEC Enforcement Needs an Overhaul

The Securities and Exchange Commission’s enforcement methods have “significant limitations” that have “hampered” its ability to carry out investigations efficiently, according to a new report released Monday by the Government Accountability Office.The 49-page report finds that the SEC enforcement...

By Alan Rappeport • Sept. 17, 2007

SEC Charges Hedge Fund Manager over PIPEs

The Securities and Exchange Commission filed charges against hedge fund manager Robert A. Berlacher, Lancaster Investment Partners L.P. and eight related entities, alleging that Berlacher engaged in insider trading and an illegal trading scheme involving PIPEs — the acronym for a private investme...

By Stephen Taub • Sept. 17, 2007

CTRL-ALT-DELETE: Dell Frozen until Restart

Texas-based computer maker Dell Inc. has announced it will delay filing second-quarter results for fiscal year 2008 until it completes the financial-restatement process it began in mid-August. The announcement follows last month’s admission by the company that some of its employees improperly cre...

By Kate Plourd • Sept. 14, 2007

New Employer Immigration Rule on Hold

A new initiative from the Bush Administration to hold employers liable for violations of federal immigration laws, intended to kick off this week, is instead at a standstill.A U.S. district judge in San Francisco issued a temporary restraining order last month to stop the government from imposing...

By Kate Plourd • Sept. 14, 2007

Former HealthSouth CFO Back in Court

Malcolm “Tadd” McVay, who received five years’ probation for playing a role in HealthSouth’s securities fraud, was back in federal court this week in another criminal case. On Thursday he pleaded not guilty in the U.S. District Court for the Northern District of Alabama to charges he made illegal...

By Sarah Johnson • Sept. 14, 2007

Ex-Controller Settles Fraud Case with SEC

A controller who served time in prison for securities fraud has settled Securities and Exchange Commission allegations that he falsified financial records to inflate his former employer’s operating income by $5.7 million.Brian Haylor, who worked as a division controller at Ferro Corp. until three...

By Sarah Johnson • Sept. 14, 2007

Tyco Announces Double Offer to Investors

Tyco International Ltd., which spun off two business units earlier this year, has received its board’s approval to buy up to $1 billion of its common stock. It also received approval to increase its quarterly dividend to 15 cents per share for the first quarter of fiscal year 2008. The company ha...

By Sarah Johnson • Sept. 13, 2007

Why Mid-caps Can’t Fund Overseas Growth

In this era of global markets, many smaller manufacturing and distribution companies still find it difficult to expand overseas. One possible reason: their bankers don’t think they have a handle on the risks.According to research by RSM McGladrey, small and mid-size companies say that the biggest...

By Marie Leone • Sept. 13, 2007

How Will the SEC Rate the Rating Agencies?

Last September, Congress gave the Securities and Exchange Commission 270 days to figure out how it would regulate credit rating agencies under a new law. Nine months later, with 21 days to spare, the SEC released final implementation rules for the Credit Rating Agency Reform Act. But the SEC may ...

By Sarah Johnson • Sept. 12, 2007

Hornbeck Opens Books, Suit Stops

Hornbeck Offshore Services announced that lead plaintiffs in a shareholder lawsuit have voluntarily dropped their charges against the company and senior executives, including Chief Financial Officer James Harp. The lawsuit had accused the defendants, which also included company chairman, presiden...

By Stephen Taub • Sept. 12, 2007

Legal Liability Looms under New Lobbying Bill

Scene: a CFO suddenly learns that she must personally sign off on her company’s compliance with a certain law. If what she certifies isn’t true, she could go to jail or pay a whopping fine. So she insists that the company install an elaborate due-diligence procedure—at great cost—to make sure th...

By David Katz • Sept. 11, 2007