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

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

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

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

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

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

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

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

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

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