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

Tyco Noteholders Send Warning

An ad hoc committee of Tyco noteholders is threatening to delay the company’s plan to break up into three companies, slated to happen later this month. In a letter fired off to the conglomerate’s board of directors, the group said the plan, which calls for Tyco to spin off two companies, could be...

By Stephen Taub • June 15, 2007

WorldCom Fair Fund Payout Tops $500 Million

The Securities and Exchange Commission has distributed more than $500 million to WorldCom investors as restitution for the company’s accounting fraud, it announced yesterday. Another $250 million will be distributed later this year upon a final court resolution of any contested claims, notes Rich...

By Stephen Taub • June 15, 2007

SEC’s Insider-trading Pace: Quickening?

In what seems to be a recently stepped-up focus on insider trading, the Securities and Exchange Commission announced the settlement of two such cases on Wednesday.In one of the actions, the SEC settled a case with former law firm partner who got wind of a forthcoming corporate acquisition while h...

By Stephen Taub • June 14, 2007

How to Get Super Refunds via Superfund

A multitude of corporations now have the green light to file suit to recoup some of their toxic waste clean-up costs. On Monday the Supreme Court ruled that corporations that voluntarily clean up toxic waste sites have the right to sue other responsible parties, including the federal government, ...

By Laura DeMars • June 13, 2007

Bush, SEC Differ in Fraud Liability Case

President Bush may have blocked a Securities and Exchange Commission amicus brief siding with investors in a Supreme Court scheme liability case, according to the Associated Press. The U.S. solicitor general — who files the government’s opinion on Supreme Court cases — reportedly let the deadline...

By Sarah Johnson • June 13, 2007

DoJ Stifles SEC Message to High Court

The Bush administration has decided not to file an amicus brief in support of shareholders in a Supreme Court case that could determine whether business partners of companies that commit fraud can also be held directly liable for securities violations. The Securities and Exchange Commission repor...

By Sarah Johnson • June 12, 2007

Whistle-blowers Face High Burden of Proof

When the Sarbanes-Oxley Act created legal protection for employees who point out financial fraud, corporate lawyers feared the law would open the door to frivolous suits by disgruntled workers. The law said all an employee needed to trigger whistle-blower protection was simply “a reasonable belie...

By Sarah Johnson • June 12, 2007

No Third Strike for Ex-CFO of Lason

William J. Rauwerdink, the former CFO of Lason, Inc., was sentenced to 3 years and nine months in prison for his role in the company’s accounting fraud nearly 10 years ago, according to the U.S. attorney’s officeRauwerdink pleaded guilty last November to conspiring to commit mail, wire, and bank ...

By Stephen Taub • June 11, 2007

Bookkeeper Sentenced to 4 Years for Embezzlement

Angela Buckborough Platt, who pleaded guilty to embezzling $6.9 million from her employer, has been sentenced to four years in prison, according to the Associated Press. Platt, who had earned $40,000 a year working for J&J Materials of Rehoboth, Mass., spent the money on a ranch in Vermont, ...

By Stephen Taub • June 8, 2007

Whistle-blowers Never Win

Of nearly 1,000 complaints filed under the whistle-blower provisions of the Sarbanes-Oxley Act since July 2002, not one has ultimately resulted in the whistle-blower making it past company appeals and winning the case.Section 806 of Sarbox, intended to protect employees of public companies from r...

By Stephen Taub and Tim Reason • June 8, 2007

UBS Settles with Enron Creditors

UBS AG agreed to pay $115 million to settle legal claims by Enron Creditors Recovery Corp., formerly Enron Corp., stemming from equity derivative contract payments that Enron Creditors sought to recover from the investment bank.The Swiss bank said in its own press release that it is settling the ...

By Stephen Taub • June 7, 2007

Swissair Execs Acquitted of Mismanagement

Nineteen executives and consultants have been acquitted of charges they caused the 2001 collapse of Swissair. A Zurich district court has awarded some of the managers compensation totaling $2.5 million, according to the Associated Press.Among those acquitted was Jacqualyn Fouse, who served as chi...

By Stephen Taub • June 7, 2007

Aussie CFO Gets 3-Year Prison Term

Dominic Fodera, the former chief financial officer of HIH Insurance Ltd., was sentenced to three years in prison for authorizing the release of a prospectus that omitted a material fact. The $4.5 billion collapse of HIH in 2001 is considered Australia’s biggest corporate failure.In a press releas...

By Stephen Taub • June 7, 2007

SEC’s Cox Writes Letter for Libby

Securities and Exchange Commission chairman Christopher Cox is one of many letter writers who supported I. Lewis “Scooter” Libby’s character before he was sentenced to two and a half years in prison. In an April 23 letter sent on personal stationery that does not mention his role in the SEC, Cox ...

By Sarah Johnson • June 6, 2007

Did IBM Show Analysts a Phony Chart?

International Business Machines Corp. settled Securities and Exchange Commission charges stemming from what the SEC said was misleading information provided in an April 5, 2005 IBM conference call that discussed IBM’s expensing of employee stock options.IBM neither admitted to nor denied the SEC’...

By Stephen Taub • June 5, 2007

First Sarbox Whistle-blower Loses Case

Five years after becoming the first person to win protection under the whistle-blower provision of the Sarbanes-Oxley Act, former Cardinal Bancshares CFO David Welch has lost his case. The Department of Labor’s Administrative Review Board ruled recently that it would not adopt an administrative l...

By Stephen Taub • June 5, 2007

SEC to Side with Investors in Enron Case

The Securities and Exchange Commission plans to support investors in a Supreme Court case that could determine whether business partners of fraudulent businesses can be held primarily liable for violating securities laws, according to the Washington Post.The U.S. solicitor general, who may file a...

By Sarah Johnson • June 4, 2007

Ex-Enron Broadband Exec Gets Two Years

Facing a possible five years in prison, Kevin Hannon, the former chief operating officer of Enron Broadband Services, was sentenced to two years for his role in the collapse of the one-time energy giant, according to the Associated Press.During the trial of Enron founder Kenneth Lay and former ch...

By Stephen Taub • June 4, 2007

Qwest CFO Settles Fraud Charges

Former Qwest Communications International CFO Robin R. Szeliga will pay $577,000 as part of a Securities and Exchange Commission settlement stemming from her role in the alleged accounting fraud at the telecommunications company.She consented to a judgment entered by a federal district court in D...

By Stephen Taub • June 4, 2007

Cardinal Settles Suit for $600 Million

Cardinal Health Inc. has agreed to pay $600 million to settle a class-action lawsuit regarding its financial reporting and disclosures between 2000 and 2004. The drug-distribution company had put aside that money in April in anticipation of the settlement.The settlement announcement comes one wee...

By Stephen Taub • June 1, 2007

Judge Blocks Fannie Mae Suit

A federal judge has ruled that shareholders may not pursue their derivative lawsuit against the board of directors of Fannie Mae following its $6.3 billion accounting scandal.U.S. District Judge Richard J. Leon dismissed the lawsuit because the shareholders failed to take the required initial ste...

By Stephen Taub • June 1, 2007

Did Rep. Wicker Move the Stock Market?

Rep. Roger Wicker (R-Miss.) may have moved the stock market Thursday, whether he meant to or not.Wicker issued a news release Thursday morning announcing that a company with connections to his district, International Truck and Engine Corporation, won a $623 million Defense Department contract to ...

By Nicole Duran • June 1, 2007

Fall Lineup Includes Secondary Actors

The outcome of shareholder lawsuits that placed some of the blame for Enron’s fraud on the energy giant’s business partners could hinge on an unrelated case that will be heard by the Supreme Court later this year. The case, which involves Charter Communications and its vendors, could answer the t...

By Sarah Johnson • June 1, 2007

Hedge-fund Bullies

If the Fox Network were ever to launch American Business Idol, Robert Chapman would be its Simon Cowell. The activist hedge-fund manager and founder of Chapman Capital once called the 78-year-old chairman of a target a “helpless Mr. Magoo–like figure” and referred to its CEO as “the dummy” in a 1...

By David Katz • June 1, 2007