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

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

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

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

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

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

Fraud by the Numbers

This year marks not only the five-year anniversary of the Sarbanes-Oxley Act but the same milestone for the President’s Corporate Fraud Task Force. Announced in July 2002, the task force is chaired by Deputy Attorney General Paul J. McNulty and includes senior Department of Justice officials and ...

By Kate Plourd • Sept. 1, 2007

FOIA Bombs Backlog the SEC

The Securities and Exchange Commission constantly promotes transparency, but one critic says the regulator has failed to practice what it preaches.To be sure, that critic — John Gavin, president of research firm SEC Insight — has an axe to grind. Gavin earns a living by mining SEC correspondence....

By Alan Rappeport • Aug. 31, 2007

Internal Probe Stalls Children’s Place Filings

The Children’s Place Retail Stores has missed another regulatory-filing deadline as it probes violations of its company policies by two executives. The company had originally said it would release a number of delinquent financial reports on Friday.The missed filings include its annual report for ...

By Stephen Taub • Aug. 31, 2007

Judge: SEC Can Keep Financial Probes Secret

A federal judge has decided not to sanction the Securities and Exchange Commission for denying Freedom of Information Act requests by an investment research firm for details of commission investigations of a number of probes. Even though U.S. District Judge Paul Magnuson said the SEC’s behavior i...

By Sarah Johnson • Aug. 30, 2007

Backdating: Are the Lawyers to Blame?

Since the backdating scandal began unfolding nearly two years ago, regulators and outsiders have been wondering why so many public companies — many of them in the technology industry — began issuing undisclosed, misdated stock options grants around the same time. Was it spread through word of mou...

By Sarah Johnson • Aug. 28, 2007

Ex-Enterasys Execs Sing, Face Sentencing

Prosecutors are asking a judge to go lightly on Wednesday when he sentences three former executives of Enterasys Networks who testified against the former CFO and the former senior vice president of finance, as well as two other employees, in a criminal securities fraud case.According to the New ...

By Stephen Taub • Aug. 28, 2007

Rambus Settles Most Backdating Claims

Rambus Inc. said it has settled claims against all but one former officer stemming from a review of past stock option grants. In a press release, the Los Altos, Calif.-based chip maker added that the settlements are conditioned on the dismissal of the claims asserted against them in derivative ac...

By Stephen Taub • Aug. 28, 2007

No Double Jeopardy for Ex-Symbol Execs

A federal appeals court ruled that a former Symbol Technologies finance executive and another former executive cannot be retried on charges stemming from the company’s accounting scandal.A three-judge panel of the 2nd Circuit Court of Appeals said retrying former senior vice president of finance ...

By Tim Reason • Aug. 27, 2007

Cutting the Fat: Z Trim May Restate

Officials at Z Trim Holdings are contemplating whether they should restate company financials following a probe into its stock-option practices. The news comes at the end of a week filled with bad news for the Illinois company, which makes a gel used to reduce fat in foods.Earlier this week, Z Tr...

By Sarah Johnson • Aug. 24, 2007

Boards Behaving Badly: A Delaware Primer

In a Delaware Court of Chancery case that he wrote “tests the boundaries of the business judgment rule,” Chancellor William B. Chandler III dealt infoUSA Inc. a setback, and drew guidelines for director conflicts of interest, and for board disclosures of internal investigations.His opinion, hande...

By Roy Harris • Aug. 23, 2007

Refco Suit Hits Grant Thornton, PwC, E&Y

In a 158-page lawsuit seeking more than $2 billion in damages, trustees representing the failed commodities brokerage Refco Inc. have charged the company’s accounting, financial, and legal advisers with knowingly aiding a group of Refco insiders to plunder millions of dollars in company assets. ...

By Kate Plourd • Aug. 22, 2007

The Game Is Up

The old-fashioned financial system was like Old Maid, a parlour game once beloved of small children. The banks were like players, dealt hands from a pack of cards, which they swapped among each other. At the end, one player was left holding a lonely queen—a bad debt, if you will—and lost. Over th...

By Economist Staff • Aug. 21, 2007

SEC Case against Amex ex-CEO Thrown Out

A Securities and Exchange Commission administrative law judge has decided that the SEC can’t censure former American Stock Exchange chairman and chief executive Salvatore Sodano for a past failure to enforce exchange rules. In his ruling, Judge Robert Mahony dismissed the case brought against So...

By Kate Plourd • Aug. 21, 2007

SEC: Sentinel Used Credit Crisis to Hide Losses

The Securities and Exchange Commission has charged Sentinel Management Group with misleading investors and using the credit crisis to hide losses and imprudent operations, according to the Associated Press. In a civil suit filed in U.S. District Court in Chicago, the SEC charged Sentinel with “fr...

By Marie Leone • Aug. 21, 2007

Tyson Stung in Spring-loading Case

Tyson Foods Inc. got another chance for Delaware’s Court of Chancery to throw out claims that the company improperly spring-loaded stock-option grants, dating options ahead of favorable company news so the value would likely rise. But the judge slapped the Tyson board down with harsh suggestions ...

By Roy Harris • Aug. 20, 2007

The CFO Stands Alone

The chief financial officer of Taiwan-based microchip maker Himax Technologies was named as the sole defendant in a class action securities lawsuit alleging that he violated securities laws, breached his fiduciary duties, and made false or misleading statements in connection with the company’s pu...

By Kate Plourd • Aug. 20, 2007

Former McKesson VP Settles SEC Charges

A former McKesson Corp. executive has settled charges that he helped to inflate revenue and net income at a software vendor that later merged with the pharmaceutical giant. Michael Smeraski has agreed to pay $50,000 and put an end to the six-year-old civil fraud charges filed against him by the S...

By Sarah Johnson • Aug. 17, 2007