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

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

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

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

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

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

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

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

Hoping D&O Will CYA

Companies are taking more active measures to protect executives frompotential lawsuits by shareholders, as the number of inquiries andpurchases of directors and officers (D&O) insurance is on the rise,according to a new report by the Towers Perrin consultancy.Fallout from scandals during the ...

By Alan Rappeport • April 23, 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

Nacchio Found Guilty

Joseph Nacchio has been found guilty of engaging in illegal insider trading. In what is probably the last high-profile corporate case since the Enron scandal, the former Qwest Communications International chief executive was convicted on 19 counts of insider trading for selling $52 million worth ...

By Stephen Taub • April 20, 2007

Fraudster Kicks Enron While It’s Down

A former Enron executive will serve 63 months in prison without parole for submitting false invoices for consulting work — several years after the company filed for bankruptcy.Christian Deeb Rahaim, formerly a senior director of benefits in the company’s human-resources department, was also order...

By Stephen Taub • April 20, 2007

Whistle-blower Lawsuit Gets DoJ Backing

The Department of Justice has joined three whistle-blower lawsuits involving alleged kickbacks to secure technology contracts with government agencies.The suits were originally filed in U.S. District Court in Little Rock, Arkansas, by Norman Rille and Neal Roberts. They allege that three companie...

By Dave Cook and Stephen Taub • April 20, 2007

At the Risky End of Finance

Naughty or nice? The question that Father Christmas poses to every child who clamours for a present also haunts the credit-derivatives market. Are these devices a clever way to disperse risk, making the financial system safer, as their enthusiasts claim? Or are they “financial weapons of mass des...

By Economist Staff • April 19, 2007

Compliance Officer Charged as Insider

The Securities and Exchange Commission has filed civil insider trading charges against Kevin J. Heron, the former general counsel, corporate secretary — and chief insider trading compliance officer — of semiconductor outsourcer Amkor Technology. According to the SEC, Heron’s trading put him $290,...

By Dave Cook and Stephen Taub • April 19, 2007

Ken Lay’s Assets Up for Grabs

Linda Lay, the widow of former Enron chairman Kenneth Lay, is in a tug-of-war with the government over nearly $13 million of her late husband’s assets.Prosecutors maintain that the assets are tied to Enron’s massive fraud. But in a court filing, reported the Associated Press, Linda Lay has assert...

By Stephen Taub • April 18, 2007