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

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

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

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

Rambus Settles Options-Driven Class Action

Rambus Inc. has agreed to pay $18 million to settle a class-action suit that had questioned the company’s accounting for stock-option grants. The settlement would lead to a dismissal of all claims against all defendants in the litigation. The settlement is subject to final documentation as well a...

By Stephen Taub • Sept. 10, 2007

Skilling Files Appeal

Former Enron CEO Jeffrey Skilling has appealed his conviction for his role in the former energy giant’s demise. Daniel Petrocelli, Skilling’s attorney, filed the motion in the U.S. Court of Appeals for the Fifth Circuit in New Orleans on Friday morning, nearly a year after Skilling was sentenced ...

By Sarah Johnson • Sept. 7, 2007

Finite-risk Probe Halts Assurant Buyback

Assurant, Inc. abruptly halted its stock buyback program as a result of the Securities and Exchange Commission’s probe into its use of finite insurance.The decision takes off the table some $261 million the company had already slated for buybacks, and Assurant said it does not plan to start a new...

By Stephen Taub • Sept. 6, 2007

Do You Know Where Your State Treasurer Is?

While one might well wonder if they attended the same parties, they weren’t members of the same party. Two former state treasurers, one a South Carolina Republican and the other a New Mexico Democrat, admitted to cocaine and kickback charges, respectively, the Associated Press reported on Thursda...

By Stephen Taub • Sept. 6, 2007

Pressure Tightens on Rating Agencies

Nearly a year after passing a law intended to address a lack of oversight over credit rating agencies and conflicts of interest, congressmen are wondering if they should have tucked more language into their legislation. Their regret comes as they consider whether to make changes to ensure this su...

By Sarah Johnson • Sept. 5, 2007

SEC Clears CNet

Just one month after a Securities and Exchange Commission investigation into its stock option practices appeared to grow more serious, CNet Networks Inc. announced Wednesday that it is now in the clear. According to the company, the SEC has ended its investigation into the company’s historical st...

By Stephen Taub • Sept. 5, 2007

One for Three

The Sarbanes-Oxley Act has long had a digital doppelgänger. Almost from the day it was announced, and certainly since its Section 404 emerged as a major corporate headache, IT companies have hawked products that promise to ease the regulatory burden. Often these have been hastily retooled version...

By Scott Leibs • Sept. 1, 2007

A Reprieve

Europe’s CFOs ought to welcome the US Supreme Court’s ruling in June, which could make shareholders think twice before pursuing class action lawsuits. In Tellabs v Makor Issues & Rights, the Supreme Court raised the bar for securities fraud suits by determining that US courts must now conside...

By Eila Rana • Sept. 1, 2007