Count ‘Em: 63 CFOs Convicted in Past Five Years

The Department of Justice, which has said that at least 53 finance chiefs have been convicted in the five-year life of the President’s Corporate Fraud Task Force, has provided CFO.com with a list of 53 people who either pleaded guilty or were found guilty. After recalculating to include other cas...

By Kate Plourd • Aug. 3, 2007

What’s Next? Investor Thoughts on Sarbox Costs

The cost of complying with the Sarbanes-Oxley Act may be tapering off, but the expense still weighs down some balance sheets, according to a new report by Foley and Lardner, a law firm specializing in corporate compliance. Investors, however, do not seem to mind.From 2005 to 2006, average Sarbox-...

By Alan Rappeport • Aug. 3, 2007

The Beazer Factor

Rumors that Beazer Homes USA Inc. was about to file for bankruptcy sent shares of the homebuilder tumbling as much as 40 percent Wednesday, while broader market averages went into another tailspin, fueling fears that the sub-prime mortgage crisis is worsening by the day.However, the company quick...

By Stephen Taub • Aug. 2, 2007

“Grand Theft Auto” Founder Eludes Prison

The first CEO convicted for his role in a stock-option backdating scheme was sentenced to five years of probation, according to Bloomberg. Former Take-Two Interactive Software Inc. chief executive Ryan Brant pleaded guilty in February to falsifying business records.Under his plea deal with Manhat...

By Stephen Taub • Aug. 2, 2007

Black’s Former Company Settles Suits

Sun-Times Media Group, Inc. has agreed to settle securities class action suits pending against it and a number of its former directors and officers. In addition, the company — formerly called Hollinger International and controlled by Conrad Black — has worked out an agreement to settle litigation...

By Tim Reason • Aug. 1, 2007

The SEC Rules

This is the second of a three-part series examining the state of accounting five years after passage of the Sarbanes-Oxley Act.If Enron made accounting sexy and the Sarbanes-Oxley Act made it lucrative, the current power struggle over rule-setting makes it both compelling and consequential. Accou...

By Kate O'Sullivan • Aug. 1, 2007

Walker’s Way

The kings of private equity are better at making money than making friends. Reviled in Europe as the spawn of Gordon Gekko and pilloried in America for paying nugatory taxes, they have an image problem to match their bank balances. Efforts to be seen in a more favourable light—such as the formati...

By Economist Staff • Aug. 1, 2007

SEC Blames Split Votes on Time Crunch

Senators criticized Securities and Exchange Commission chairman Christopher Cox for releasing two proxy-access proposals that seem to contradict each other. At a hearing on Tuesday, Sen. Jack Reed (D-R.I.) called the proposals “diametrically opposed” and an unprecedented move in the SEC’s history...

By Sarah Johnson • July 31, 2007

Five Years Under the Thumb

For the leaders of corporate America it has been five long years. The Sarbanes-Oxley Act, widely known as SOX, was signed into law on July 30th 2002 by George Bush, who called its tough new rules the “most far-reaching reforms of American business practices since Franklin Roosevelt was president”...

By Economist Staff • July 31, 2007

Former Exec Gets Five Years for Embezzlement

The third former employee to be sentenced for her role in a $36 million embezzlement scheme at construction company PBS&J will serve up to 63 months in federal prison. Maria Garcia, a former finance systems manager at the company, had pleaded guilty to charges she participated in the scheme w...

By Stephen Taub • July 30, 2007

Court Fines Mining Company for Snubbing SEC

A federal court has found International Energy and Resources Inc. in contempt of court for not complying with a Securities and Exchange Commission subpoena to produce documents.Howard Matz, U.S. district judge for the Central District of California, also ordered IER to pay a fine of $1,000 for ea...

By Stephen Taub • July 30, 2007

Marching to Different Drummers

A report by the New York Federal Reserve on hedgefunds set off alarm bells recently when the bank seemed to suggestthat funds were stockpiling too many eggs in one basket.Headlines based on the paper, by Federal Reserve economistTobias Adrian, warned that hedge funds have concentratedrisk in too ...

By Joseph McCafferty • July 30, 2007

Prison Qwest: Nacchio Is Sentenced

Former Qwest Communications chief executive Joseph Nacchio has been sentenced to six years in prison for his insider-trading conviction, according to the Associated Press. Nacchio was also ordered to forfeit $52 million in assets he gained from the illegal stock sales in the next 15 days.In addit...

By Stephen Taub • July 27, 2007

UPS Gets 195 Workers to Mail It In

UPS says it recorded a $68 million charge stemming from an early retirement program.The package-delivery company had offered 640 employees a special voluntary separation opportunity (SVSO), which was accepted by 195, or 30 percent, of the eligible employees during the first quarter. They all work...

By Stephen Taub • July 27, 2007

Coherent Unclear on Options Fix

Several months after acknowledging it is the subject of a Securities and Exchange Commission probe, Coherent Inc. admitted finding “a significant number” of stock-option grants that were incorrectly dated.However, the maker of commercial and scientific lasers has yet to determine how it will acco...

By Stephen Taub • July 27, 2007

Revenue Games at Cardinal Health

Cardinal Health will pay the Securities and Exchange Commission $35 million to settle charges that it had used improper accounting methods and filed misleading financial reports from 2000 to 2004. The SEC’s complaint against the drug and equipment distribution company included allegations that Ca...

By Sarah Johnson • July 26, 2007

The Credibility Gap

A CFO gives a reasonably good presentation to analysts but botches the question-and-answer session, or doesn’t go much beyond the P&L and cash flow statement to provide operational insight into the business, or fails to tailor information to take into account the varied needs of investors. Th...

By Eila Rana • July 26, 2007

Spousal Abuse: SEC Charges Two with Insider Trading

In its fourth so-called “pillow talk” case in two months, the Securities and Exchange Commission has charged yet another couple with illegal insider trading.In the current case, the SEC accused Shane Bashir Suman, a former employee of Toronto-based medical device maker MDS Inc., of stealing confi...

By Stephen Taub • July 24, 2007

Survey: Companies Go Long on Earnings Guidance

Companies are providing more long-term forecasting and performance measurements and focusing less on quarterly earnings-per-share guidance, according to a recent survey by the National Investor Relations Institute.Of the 752 companies that provide earnings guidance and responded to the survey, 58...

By Alan Rappeport • July 24, 2007

You Have a Right to an Attorney (on the Company’s Dime)

One week after a federal judge dropped a case against 13 former KPMG employees because prosecutors had pushed the accounting firm into not paying their legal fees, a House committee will mark up a bill that would alleviate pressure on companies to make similar agreements. On Tuesday, the Subcommi...

By Sarah Johnson • July 24, 2007

Chief Economist Spatt to Leave SEC

Securities and Exchange Commission chief economist Chester Spatt, who also serves as director of the Office of Economic Analysis (OEA), is leaving the agency after three years.At the end of this month he plans to return to Carnegie Mellon University, where he serves as Mellon Bank professor of fi...

By Stephen Taub • July 20, 2007

CFO Guilty of Ponzi Death Scam

The former chief financial officer of Mutual Benefits Corp. and two others pled guilty to charges stemming from their roles in a billion-dollar securities offering by the “viatical and life settlement” company, which was closed by federal regulators in May 2004.In a viatical or life settlement tr...

By Stephen Taub • July 19, 2007

Quick: How Many CFOs Have Been Convicted?

While Enron, WorldCom, and Tyco offer the marquee examples of CFOs brought down in the past five years of legal action against accounting abuses, a report issued by the President’s Corporate Fraud Task Force calculates that at least 53 finance chiefs have been convicted since 2002.In what is beco...

By Kate Plourd • July 18, 2007

Wells Notices Sideline Finance Execs

Insurance company Assurant placed its CEO and CFO, as well as a divisional CFO, on leave Tuesday after it became clear that the three executives are likely to face charges stemming from the Securities and Exchange Commission’s investigation into the company’s use of finite insurance.Assurant said...

By Tim Reason and Stephen Taub • July 17, 2007

Problems Broaden for Ex-Broadcom Chief

Broadcom Corp. co-founder and ex-CEO Henry T. Nicholas III may be thinking back to the good old days when his only problem was dealing with a federal probe of alleged stock-options backdating . On Friday, reports circulated widely about an ex-employee’s lawsuit claiming that the billionaire’s lea...

By Roy Harris • July 16, 2007