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

Shareholder Lawsuit Ruling a Boon?

The U.S. Supreme Court has upheld a 1995 law that established strict standards for proving corporate fraud in shareholder lawsuits. In an 8-to-1 decision handed down on Thursday, the high court said that to successfully prove that a company intentionally misled investors — and thus committed frau...

By Marie Leone • June 21, 2007

Chavez Costs AES $638 Million

The issue of political risk was underscored Thursday when AES reported its most recent quarterly results.The electric power company said it recognized a $638 million impairment charge in connection with the forced sale of its equity stake in its Venezuelan subsidiary C.A. La Electricidad de Carac...

By Stephen Taub • June 21, 2007

Ex-Enron CFO Takes SEC Plea Deal

The Securities and Exchange Commission settled aiding and abetting charges with one of Enron’s former top finance executives. The charges were linked to the infamous Nigerian barge deal with Merrill Lynch.Under the plea deal, Jeffrey McMahon, Enron’s former treasurer and chief financial officer a...

By Stephen Taub • June 21, 2007

Dell’s Third Delisting Notice Wasn’t a Charm

Nasdaq sent Dell Inc. a fourth delisting notice, indicating that the computer maker is out of compliance with exchange requirements because it is delaying its financial report for the May 4 first quarter of its fiscal 2008.Similar notices to the latest one, dated June 14, were sent after Dell del...

By Stephen Taub • June 19, 2007

Ex-CEO of Enron Broadband Sent to Prison

A former Enron executive who pled guilty and testified against former CEO Jeffrey Skilling and founder Kenneth Lay is now headed to jail for his own role in artificially boosting the company’s fortunes.Kenneth Rice, once the CEO of the Enron Broadband Services, was sentenced Monday to two years a...

By Stephen Taub • June 19, 2007

If Byrd Sings, How Will the Brocade Case Swing?

The second day of the stock-options-backdating criminal trial of former Brocade Communications CEO Gregory L. Reyes began with clear signals that the case could turn on what ex-CFO Michael J. Byrd says.On day one, defense attorney Richard Marmaro told the jury that the history of granting stock o...

By Roy Harris • June 19, 2007

Atari on Pause after Goodwill Charge

After losing nearly one-third of what it made in revenues last year, Atari Inc. says it will take a goodwill impairment charge equal to all or a substantial portion of the $54.1 million of goodwill on the company’s books. The impairment charge will increase the company’s net loss of about $17.2 m...

By Stephen Taub • June 15, 2007

Dell Delays Another Report

Questions arising from an audit-committee investigation into Dell Inc. have forced the company to delay it most recent quarterly filings. Dell officials say the company will delay quarterly reports for the first three months of fiscal 2008, which ended May 4.The Securities and Exchange Commission...

By Stephen Taub • June 15, 2007