Novellus Investors Drop Backdating Suit

Plaintiffs in a shareholder derivative lawsuit alleging the improper dating of stock options grants at Novellus Systems have decided to drop their case. Last week, investors submitted a voluntary dismissal notice to the U.S. District Court for the Northern District of California to close the book...

By Sarah Johnson • May 10, 2007

Investors Ask SEC to Back Enron Bank Lawsuit

Union officials, state regulators, and people who lost money when Enron collapsed are calling on the Securities and Exchange Commission to support their effort to sue Wall Street banks for damages, according to the Associated Press.Investors who lost their retirement savings made their plea to th...

By Stephen Taub • May 10, 2007

Judge Frees Goldman from Fannie Suit

A federal judge ruled that Fannie Mae shareholders cannot include Goldman Sachs in their lawsuit stemming from the mortgage giant’s accounting scandal, according to the Associated Press.Investors who lost money they spent on Fannie Mae shares had asserted that Goldman constructed deals that enabl...

By Stephen Taub • May 9, 2007

Ex-Dow CFO Sues Company

J. Pedro Reinhard — the onetime chief financial officer fired last month by Dow Chemical — has sued his former employer for libel and breach of contract.The complaint, filed in U.S. District Court for the Southern District of New York, also names chairman and chief executive officer Andrew Liveri...

By Stephen Taub • May 8, 2007

Judge Certifies Omnicom Class Action

A judge has certified a class action against Omnicom Group regarding the company’s accounting for losses in Internet-related investments, reported the New York Law Journal.The plaintiffs reportedly alleged that certain investments had suffered “serious, non-temporary impairment” but that the loss...

By Dave Cook and Stephen Taub • May 8, 2007

SEC Mulls Shareholder Catch-22

For investors in a troubled business, it’s a Catch-22: They might want a shareholder meeting to set straight a company that has fallen out of compliance, but because the company has fallen out of compliance, regulators won’t allow a shareholder meeting.The inability to meet — owing to the strictu...

By Roy Harris • May 7, 2007

Court Nixes HealthSouth Tax Refund

The Alabama Supreme Court ruled that HealthSouth cannot receive a refund on property taxes paid on bogus assets, reported the Associated Press.The company had been seeking refunds on property taxes it overpaid in 2001 and 2002, the years prior to the uncovering of its massive accounting fraud, ac...

By Stephen Taub • May 7, 2007

Verizon Pay Proposal Too Close to Call

Verizon may become the first company where shareholders approve a measure requiring an advisory vote on executive compensation.Results of the resolution, which was put to a vote at Verizon’s annual meeting on Thursday, were “too close to determine” the outcome, according to a company statement. A...

By Stephen Taub and Dave Cook • May 4, 2007

Armor Probe Followed by Firings

Armor Holdings disclosed that certain employees, agents, and distributors were fired or have resigned after an internal investigation into alleged improper payments at its Armor Products International subsidiary.In January, the company — formerly American Body Armor & Equipment — received a w...

By Stephen Taub and Dave Cook • May 3, 2007

Fed Warns of Hedge Fund Threat

The New York Federal Reserve has warned that hedge funds pose the greatest risk since the meltdown of Long-Term Capital Management in 1998.In a paper published Wednesday, Fed capital markets economist Tobias Adrian blamed the recent high correlations among hedge-fund returns, which suggest concen...

By Stephen Taub • May 2, 2007

The Long View

Warren Buffett may be the most celebrated stock picker of our time, but many investors ignore his advice. Instead of taking long-term positions in undervalued businesses, they fixate on short-term performance and clobber companies that miss quarterly earnings forecasts. That goes double for the a...

By Joseph McCafferty • May 1, 2007

Retrial for Westar Pair

Three is not much of a charm for two former Westar Energy Inc. executives. On Monday, a federal prosecutor said the pair will be tried for a third time on charges that they tried to loot the Topeka, Kansas utility, according to the Associated Press.Former Chief Executive David Wittig will face on...

By Stephen Taub • May 1, 2007

Bookkeeper, Embezzler, Felon

Linda Corra, for 12 years the bookkeeper of the Center for Hematology-Oncology in Boca Raton, Florida, has been sentenced to three years in prison for embezzling about $6 million.According to the South Florida Sun-Sentinel, Corra deposited checks drawn from the clinic’s account into her personal ...

By Stephen Taub • April 30, 2007

Subprime ERISA Practices Lead to Lawsuit

Subprime lender Fremont General is being sued by its employees under the Employee Retirement Income Security Act.The ERISA lawsuit, filed in U.S. District Court for the Southern District of California, reportedly claims that board members authorized the purchase of Fremont stock for company pensi...

By Stephen Taub and Dave Cook • April 27, 2007

Baker Hughes Greased Palms in Oil Deal

Baker Hughes Inc. has agreed to pay a total of $44 million to settle criminal and civil charges that it violated the Foreign Corrupt Practices Act (FCPA). The charges and fines were levied on both the parent company and a subsidiary.Baker Hughes Services International (BHSI), a wholly owned subsi...

By Stephen Taub • April 27, 2007

Failure to Excel

“We use a lot of spreadsheets,” says Evelyn Dryer, energy settlements director for southern Arizona utility Tucson Electric Power. “Companies have all these fancy financial applications, but a lot of stuff is still going into spreadsheets because they’re so flexible.”But although she considers sp...

By John Edwards • April 27, 2007

SEC, Ex-execs of NorthWestern Settle

The Securities and Exchange Commission settled charges against four former officers, including two former finance executives, of NorthWestern Corp. for actions that the SEC says ultimately resulted in the company’s bankruptcy in 2003.The SEC alleged that Merle D. Lewis, NorthWestern’s former chie...

By Stephen Taub • April 26, 2007

Insuring Terror

The cost of terrorism can be a terrible thing to assess. Indeed, even experts astute at calculating risk seem at a loss — both at predicting future attacks and at estimating their price. Insurers, who bear much of the financial burden when catastrophe hits, once again have begun to push the feder...

By Alan Rappeport • April 26, 2007

Pfizer Unit Settles Kickback Charges

A Pfizer subsidiary will pay a $19.68 million fine after pleading guilty in federal court to offering a kickback to a pharmacy benefit manager in exchange for getting a higher ranking on a list of pharmaceutical recommendations. As part of its sentencing announced on Wednesday, the Pfizer unit, P...

By Stephen Taub • April 26, 2007

Ex-Cendant Controller Settles with SEC

The Securities and Exchange Commission settled its fraud case against the ex-controller of Cendant on Wednesday.Anne Pember, formerly controller with CUC International, which merged with HFS Inc. to form Cendant in December 1997, will have to pay $100,000 and is prohibited from serving as an offi...

By Alan Rappeport • April 25, 2007

Comverse to Allow ”Proxy Access”

Comverse Technology announced Wednesday that under a new by-law amendment, major shareholders will now be entitled to nominate potential board members and have those candidates included on the company’s ballot.The announcement of limited “proxy access” came one day after the Securities and Exchan...

By Stephen Taub • April 25, 2007

Options Probes Moving ”Quickly”: Cox

Securities and Exchange Commission chairman Christopher Cox said the regulator will probably wrap up many of its stock-option backdating cases during the next few weeks, according to Reuters.“We are working on procedures to move many of the cases very quickly,” he told the wire service. Reuters a...

By Stephen Taub • April 25, 2007

Familiar Tune: SEC Alleges Backdating

Former Apple chief financial officer Fred Anderson has agreed to pay $3.5 million to settle Securities and Exchange Commission charges regarding backdated stock option grants, according to published accounts. He will also pay a $150,000 fine to settle SEC charges that he filed false financial rep...

By Stephen Taub • April 24, 2007

Familiar Tune: Backdating at Apple

It’s official: Former Apple chief financial officer Fred D. Anderson has agreed to pay more than $3.6 million to settle charges with the Securities and Exchange Commission stemming from his role in the company’s options backdating scandal.The SEC also filed charges against former general counsel ...

By Dave Cook and Stephen Taub • April 24, 2007

Scrushy Settles with SEC for $81 Million

Former HealthSouth founder and chairman Richard Scrushy agreed to pay $81 million to settle fraud charges with the Securities and Exchange Commission stemming from one of the largest accounting restatements in American corporate history.Under the deal, Scrushy also agreed to a permanent bar from ...

By Stephen Taub • April 23, 2007