Frank Slams SEC Terror Tool

Rep. Barney Frank (D-Mass.), chairman of the House Committee on Financial Services, is the latest critic of the Securities and Exchange Commission’s new terrorism tool.On Friday Frank’s office released a letter to SEC chairman Christopher Cox criticizing the tool for listing companies that no lon...

By Alan Rappeport • July 13, 2007

Conrad Black Convicted of Fraud

Conrad Black, the former chairman and chief executive of Hollinger International Inc., was found guilty by a federal jury on Friday of three counts of mail fraud and one count of obstruction of justice and acquitted of nine other counts, including racketeering and misuse of corporate perquisites,...

By David Katz • July 13, 2007

Like Father, Like Son: SEC Charges Two with Backdating

By approving misdated stock option grants, the ex-CEO of Engineered Support Systems profited by $8.9 million with the full support of a compensation-committee member — who also happened to be his son — according to the Securities and Exchange Commission. On Thursday, the SEC charged ESSI founder ...

By Sarah Johnson • July 12, 2007

Refco Examiner Cites Grant Thornton, E&Y

The examiner appointed in the scandal-plagued 2005 bankruptcy of Refco Inc. named Grant Thornton LLP, Ernst & Young LLP, and the law firm of Mayer, Brown, Rowe & Maw as those most likely to face claims from Refco’s debtors.Refco, a financial-services firm, swiftly collapsed in bankruptcy ...

By Roy Harris • July 12, 2007

DOL Sees Through X-Ray Company’s Scheme

A federal judge has ordered a Miami company to pay nearly $1.2 million in restitution for allegedly using its employees’ retirement funds to pay company expenses. The Department of Labor sued X-Ray Equipment Co. (XEC) and its president, Colen Carter, in February, charging that the private company...

By Sarah Johnson • July 11, 2007

Ganging Up on the Lawyers

If the plaintiffs’ bar is being undercut by the criminal investigation of Milberg Weiss, it is only the latest blow to what seems to be a declining historical interest in class-action suits.The Stanford Law School Securities Class Action Clearinghouse, working with Cornerstone Research, recorded ...

By Roy Harris • July 11, 2007

Bershad’s Confession: Death Knell for Plaintiffs’ Bar?

When David Bershad agreed to talk about the scheme his former firm, Milberg Weiss, cooked up to provide attorneys with a steady supply of paid class-action plaintiffs, it was music to the ears of corporate tort reformers everywhere.That’s because tarnishing Milberg Weiss, one of the biggest and m...

By David Katz • July 10, 2007

Ensign Gets Finance Committee Seat

The Senate GOP Conference on Tuesday gave National Republican Senatorial Committee Chairman John Ensign (Nev.) the Finance Committee seat that became vacant when Wyoming Sen. Craig Thomas passed away in early June.Though there was some talk within GOP circles of giving the Finance seat to another...

By Erin P. Billings • July 10, 2007

Is the Brocade CEO’s Backdating Trial Unraveling?

The federal judge in the government’s first stock-options backdating criminal case — against Brocade Communications Systems ex-CEO Greg Reyes — said he would rule next Thursday on whether to grant a defense motion to end the trial without sending it to the jury.Prosecutors finished their case lat...

By Roy Harris • July 10, 2007

Bigger Bang

Shareholder friendly. Tax efficient. Value enhancing. Executives describe share buybacks in many ways, usually glowing. But not all buybacks are created equal, according to new research. When it comes to buying back shares, it pays to think big. Two recent reports — one from Morgan Stanley, the o...

By Jason Karaian • July 10, 2007

Execs May Face Finite-risk Charges

Officials at Assurant Inc. said two company executives may face civil charges related to finite insurance products. Michael Steinman, senior vice president and chief actuary, and Dan Folse, vice president-risk management, both of the company’s Assurant Solutions/Assurant Specialty Property unit, ...

By Stephen Taub • July 5, 2007

Five Years and Accounting

This story is Part 1 in a three-part series on how corporate finance has changed since the Sarbanes-Oxley Act was passed.In July of 2002, President Bush traveled to New York and spoke to a rapt audience just a stone’s throw from Ground Zero. Pledging to punish those wrongdoers whose misdeeds and ...

By Scott Leibs • July 1, 2007

This Land Is Your Land

Imagine a world in which AMB Property Corp., which owns more than 100 million square feet of real estate, appears to lose all of the property on its balance sheet overnight. Or where Walgreen Co., the giant drugstore chain, suddenly sees $26 billion in operating leases weighing down its ledger.Th...

By Alan Rappeport • July 1, 2007

Drowning in Data

Months later and you’re still recovering from proxy season? No worries: you’re not alone. The fact is, anyone who had anything to do with filing a corporate proxy statement this year — the first year under new Securities and Exchange Commission rules designed to improve compensation disclosure — ...

By Michelle Leder • July 1, 2007

Scrushy Avoids Maximum Sentence

Richard Scrushy is headed to prison, but for far fewer years than the maximum sentence. On Thursday, U.S. District Judge Mark Fuller ordered the founder and former CEO of HealthSouth to prison for six years and 10 months and former Alabama Gov. Don Siegelman to seven years and 4 months for the ro...

By Stephen Taub • June 29, 2007

A Surge in Credit-Rating Firms?

Seven credit-rating firms previously identified as nationally recognized statistical rating organizations (NRSRO) have formally registered with the Securities and Exchange Commission to comply with congressional reforms, and at least one more firm is in the process of registering. The registering...

By Alan Rappeport • June 28, 2007

Family Bonding: Adelphia’s Rigases Going to Prison

Former Adelphia Communications CFO Timothy Rigas and his father, Adelphia founder John Rigas, are headed for prison. The men were ordered today to begin their terms on Aug. 13, nearly three years after they were convicted in one of the signature corporate frauds of the new millennium. Father and ...

By Stephen Taub • June 27, 2007

KeyBank Sheds Money-Laundering Edicts

The Comptroller of the Currency has removed an October 2005 consent order against KeyBank National Association requiring the bank to patch up its money-laundering defenses required under the Bank Secrecy Act.Further, the Federal Reserve Bank of Cleveland has ended a Memorandum of Understanding c...

By Stephen Taub • June 27, 2007

SEC’s Cox Tells Congress: Let the Decision Stand

Making a strong case for rule by precedent, Securities and Exchange Commission Chairman Christopher Cox told the House Financial Services Committee that SEC interpretations of laws shouldn’t depend on who’s in charge at any one time. In their vote in favor of a shareholder brief arguing that “sec...

By Sarah Johnson • June 27, 2007

SEC Defends Unanimous Votes to Frank

Testifying on Tuesday before the House Financial Services Committee, the members of the Securities and Exchange Commission defended their habit of continually voting the same way for the past two years. During Christopher Cox’s reign as chairman of the SEC since 2005, critics have questioned his...

By Sarah Johnson • June 26, 2007

Supreme Court Delays Enron Case

The Supreme Court justices have put off hearing a case that could determine whether banks should be held directly liable for helping Enron with its accounting fraud. In the waning days of their 2006 term, the justices have set Regents of the University of California v. Merrill Lynch aside. A some...

By Sarah Johnson • June 26, 2007

Scrushy to Be Sentenced Tuesday

After being acquitted in 2005 on all charges related to the massive accounting fraud at HealthSouth, former CEO Richard Scrushy may be heading to prison after all.Scrushy faces sentencing Tuesday in a separate case in which he and former Alabama governor Don Siegelman were convicted of bribery an...

By Stephen Taub • June 25, 2007

Research in Commotion

If there has been one lasting casualty of the collapse of the dotcom bubble, it has been sell-side research — the securities analysis undertaken by investment banks. Regulators have restricted it and investors have ignored it. RCM, a fund-management group, estimates that research budgets fell by ...

By Economist Staff • June 25, 2007

Cardinal Bancshares Changes CFOs

Cardinal Bankshares Corp., the small Floyd, Va.-based bank holding company that emerged victorious after a long, unsuccessful whistle-blower complaint brought by a former chief financial officer, has named a new CFO.In a regulatory filing, Cardinal said its appointment of Alan Dickerson as vice ...

By Stephen Taub • June 25, 2007

The Numbers in Safety

Even as Congress was preparing to hold hearings on theagency’s effectiveness, the Occupational Safety and Health Administration sentout its annual warning letters to companies with higher-than-average injuryand illness rates. More than 14,000 companies received the letters, each havingreported 5....

By Laura DeMars • June 25, 2007