SEC Charges Two for Enron’s Brazil Deal

The Securities and Exchange Commission has charged two former Enron lawyers for their role in the sale of a Brazilian power project to one of the company’s infamous partnerships.The SEC alleged that Jordan H. Mintz, former vice president and general counsel of Enron’s global finance group, and Re...

By Dave Cook and Stephen Taub • March 28, 2007

MedQuist Settles Shareholder Suit

MedQuist disclosed that it has agreed to pay $7.75 million to settle a shareholder class-action lawsuit filed against the company and several former officers.The provider of medical transcription and health information management services, which trades on the Pink Sheets, added that neither the c...

By Stephen Taub • March 28, 2007

High Court to Weigh “Scheme Liability”

The Supreme Court has agreed to rule on whether a company’s shareholders can sue its suppliers, or other “secondary actors” that do business with it, when the company is alleged to have committed securities fraud.The case at hand involves StoneRidge Investment Partners and its stake in cable tele...

By Dave Cook and Stephen Taub • March 27, 2007

Will SEC’s Budget Focus Spell Corporate Relief?

The Securities and Exchange Commission will use this year’s relatively modest budget increase to focus on high-tech and down-home issues, rather than the corporate giant-slaying it has tackled in past years.In testimony before Congress on Tuesday, SEC Chairman Christopher Cox formally requested t...

By Alan Rappeport • March 27, 2007

SEC Unit Eyes Swifter Fraud Payouts

The Securities and Exchange Commission is creating a new office dedicated to disbursing money to investors harmed in securities-fraud cases. Under the Sarbanes-Oxley Act of 2002, the SEC became the fund holder for the disgorgement and fines it collects in such cases. While the regulator has done ...

By Sarah Johnson • March 27, 2007

Fly Right, PBGC Tells Northwest

Northwest Airlines, which will retain “billions of dollars” in pension liabilities under a bankruptcy reorganization plan, must clarify its financial position for creditors, the Pension Benefit Guaranty Corp. reportedly stated in a court filing.According to the Associated Press, the PBGC added th...

By Stephen Taub • March 26, 2007

SEC Censures AMEX for Lax Controls

The Securities and Exchange Commission has censured the American Stock Exchange for failing to enforce compliance with securities laws and rules, as well as failing to comply with its record-keeping obligations. In addition, the SEC instituted administrative proceedings against Salvatore F. Sodan...

By Stephen Taub • March 23, 2007

PCAOB Drums Up Support in Asia

The group that oversees the accounting profession has reached out to its counterparts in Asia to discuss cooperation on auditor oversight. Mark Olson, chairman of the Public Company Accounting Oversight Board (PCAOB) and board member Charles Niemeier participated in a meeting of the International...

By Stephen Taub • March 23, 2007

Class Action Settlements Past Their Peak

The size of securities class action settlements mushroomed in 2006, according to a new study from Cornerstone Research.Excluding last year’s $6.6 billion partial settlement of the Enron litigation (and the prior year’s $6.2 billion WorldCom settlement fund), the total value of settled cases grew ...

By Stephen Taub • March 22, 2007

Judge Throws Out Suit Challenging PCAOB

In a major blow to the burgeoning efforts to chip away at the Sarbanes-Oxley Act, a U.S. District Court judge on Wednesday dismissed a lawsuit challenging the constitutionality of Sarbox’s creation of a separate body to oversee the accounting industry, according to press reports. Judge James Robe...

By Stephen Taub • March 22, 2007

Applebee’s Urges Limited Director ‘Menu’

Applebee’s International has taken the offensive in its proxy fight with Breeden Capital, the activist hedge fund headed by former Securities and Exchange Commission chairman Richard Breeden.Even as it makes changes seemingly aimed at appeasing Wall Street, Applebee’s asked shareholders not to vo...

By Stephen Taub • March 22, 2007

Express Checkout for Foreign Issuers

The Securities and Exchange Commission voted Wednesday to make it easier for foreign companies to delist from U.S. stock markets and deregister with the SEC.The newly approved regulation — which will take effect before the June Sarbanes-Oxley audit deadline — allows a company to deregister if its...

By Alan Rappeport • March 21, 2007

Corrupt or Careless?

On January 19, the managers of seven multinational corporations operating in China received some bad news: the Shanghai police had announced the arrest of 22 of their employees on suspicion of bribery. The police gave few details about the investigation, which involved McKinsey, McDonald’s, and A...

By Don Durfee • March 20, 2007

Ponzificating

Charles Ponzi was a likeable man. That helped him persuade American investors in 1920 that he could deliver returns of 50 percent in just 45 days by exploiting a loophole in the pricing of international postal coupons. In a way, he was advertising an early version of an arbitrage fund.In reality,...

By Economist Staff • March 20, 2007

Will the SEC Demand “Green” Disclosures?

A diverse group of 65 institutional investors, government treasurers and controllers, and corporations is calling for federal legislation — and some clarification from the Securities and Exchange Commission — to help curb the pollution causing global climate change.Organized by shareholder enviro...

By Dave Cook and Stephen Taub • March 20, 2007

Class Dismissed, Enron Trial on Hold

A federal appeals court has ruled that former Enron shareholders cannot combine their litigation against a number of major investment banks into a class action lawsuit.According to the Associated Press, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit stated that “class cert...

By Dave Cook and Stephen Taub • March 20, 2007

”We’re Looking at Subprime”: SEC

The Securities and Exchange Commission is investigating a number of companies that operate in the shaky market for mortgage loans to individuals with poor credit, according to the Associated Press.“We’re looking at subprime,” SEC Director of Enforcement Linda Thomsen told reporters following an a...

By Stephen Taub • March 20, 2007

Radler to Pay $28.7M in Hollinger Deal

The Securities and Exchange Commission has reached a settlement with David Radler, once the publisher of the Chicago Sun-Times and a former business partner of Conrad Black, for his role in a scheme to loot money from Hollinger International.Without admitting or denying the SEC charges, Radler ag...

By Stephen Taub and Dave Cook • March 19, 2007

Sarbox May Extend to Child Pornography

A Connecticut lawyer has become enmeshed in the snares of the Sarbanes-Oxley Act, even though his alleged crime has nothing to do with such core missions of the law as stamping out securities fraud, ensuring auditor independence, or boosting investor confidence. Rather, his alleged violation was ...

By Sarah Johnson • March 16, 2007

Not All Filers Are Accelerated Equal

Large accelerated filers — U.S. companies with a market capitalization of at least $700 million — have struggled to meet a new Securities and Exchange Commission filing deadline, according to institutional research firm Glass, Lewis.Beginning this year, these companies must file their annual repo...

By Stephen Taub and Dave Cook • March 16, 2007

Cisco Outsmarted of $1 Million, Say Feds

Four former employees of a networking-equipment reseller have been charged with engaging in a scheme that defrauded Cisco Systems out of more than $1 million, reports the Associated Press.According to the U.S. Attorney’s Office for the Northern District of California, during 2001 and 2002 the def...

By Stephen Taub and Dave Cook • March 16, 2007

”Real Deal” Was Going in Circles: SEC

The Securities and Exchange Commission has settled charges against three people for an alleged financial fraud regarding “circular” real estate sales.The three — Robert A. Ness Jr., former controller of Spokane-based Metropolitan Mortgage & Securities; a former vice president, Thomas R. Maste...

By Stephen Taub and Dave Cook • March 16, 2007

Regulation Costing Attorneys More Time

Corporate lawyers at U.S. and international firms have been burning more midnight oil on regulatory issues in the past three years as the number of investigations — both internal and regulatory — has risen. According to a survey of company lawyers by law firm Fulbright & Jaworski, those at th...

By Helen Shaw • March 16, 2007

Time Warner, Calpers in $118M Settlement

The California Public Employees’ Retirement System announced that Time Warner has agreed to pay $117.7 million to settle a securities lawsuit regarding its former AOL unit.After opting out of a federal class action, Calpers filed its own lawsuit in 2003 against Time Warner, several current and fo...

By Stephen Taub and Dave Cook • March 15, 2007

Dunn Deal: HP Spy Charges Dropped

A California judge dropped criminal charges against former Hewlett-Packard chairwoman Patricia Dunn stemming from the company’s boardroom spying scandal, according to published reports.“This is a vindication of Patty Dunn in every sense of the word,” her lawyer, James Brosnahan, told the Associat...

By Stephen Taub • March 14, 2007