Former Qwest CFO Reaches Deal with SEC

Former Qwest Communications chief financial officer Robin Szeliga has reached a settlement in principle of a civil fraud lawsuit brought by the Securities and Exchange Commission, reported the Rocky Mountain News.Filed on Friday, the one-page court document disclosed few details, according to th...

By Stephen Taub • Jan. 8, 2007

NYC Pensions Seek Vote on Pay

The New York City Employees’ Retirement System (NYCERS) is calling on Home Depot, Blockbuster Inc., and Par Pharmaceutical Cos. to allow shareholders to approve the compensation of senior executives. “Institutional investors are fed up with the unbridled excesses of executive compensation in the ...

By Stephen Taub • Jan. 3, 2007

Class-Action Settlement Size Is Surging

Two studies published this week—>one from Stanford Law School, the other from NERA Economic Consulting—found that the number of shareholder class action suits were down dramatically in 2006. Even so, the size of settlements of existing cases soared past last year’s record levels, according to ...

By Stephen Taub • Jan. 3, 2007

Securities Class-Action Suits Sharply Decline

Shareholders filed fewer lawsuits last year. The number of securities fraud class actions filed in 2006 plunged by 38 percent, to a total of 110 filings, from 178 the prior year, according to an annual review by the Stanford Law School Securities Class Action Clearinghouse, a joint project betwee...

By Stephen Taub • Jan. 2, 2007

MetLife Settles with Spitzer for $19 Million

MetLife has agreed to pay $19 million to settle allegations by outgoing Attorney General Eliot Spitzer that the insurance giant paid brokers who steered clients to purchase insurance from the company.The largest life insurer in the United States also agreed to adopt a new compensation structure t...

By Stephen Taub • Jan. 2, 2007

Best of 2006: Law and Order

Stories of corporate crime — and punishment — ran the gamut this year, from the chilling 24-year sentence of Enron’s Jeffrey Skilling and Ken Lay’s sudden death after being convicted to Scott Sullivan’s empty pockets and the sale of Dennis Kozlowski’s multi-million-dollar mansion to pay his debts...

By CFO Editorial Staff • Dec. 29, 2006

Political Spending Disclosures Increase

Verizon Communications, Monsanto, and General Dynamics are the three latest large companies to agree to disclose some or all political spending made with corporate funds, according to a joint announcement last week from a number of shareholder activist groups. In addition, Monsanto and General Dy...

By Stephen Taub • Dec. 27, 2006

SEC Doles Out $83 Million from Gemstar Case

The Securities and Exchange Commission said shareholders who were harmed by fraudulent accounting and disclosure practices at Gemstar-TV Guide International will begin receiving about $83 million in cash and stock under the “Fair Funds” provision of the Sarbanes-Oxley Act.The funds include $22.3 ...

By Stephen Taub • Dec. 26, 2006

Best of 2006: Risks and Benefits

Risk management, you’d think, isn’t the best topic to ponder during the holiday season. Terrorism, toxic waste, political and governance perils — they don’t sit well under the tree. But maybe finance chiefs can take solace in the fact that terrorism hasn’t hit these shores since 9/11 and that mos...

By CFO Editorial Staff • Dec. 26, 2006

Hard Landings?

Not everyone is flying high about lower oil prices.The cooling in jet-fuel costs since last summer sounds like good news, but it caught some airline-hedging programs off guard. Indeed, Alaska Air Group recorded a third-quarter loss of $17.4 million in October, partly due to losses tied to fuel-he...

By Lori Calabro • Dec. 26, 2006

SEC Opens Probe of a Fake News Release

The Securities and Exchange Commission has launched an investigation into a seemingly bogus press release that led to a rapid surge in a small outsourcing company’s stock price, according to the Associated Press.Early Wednesday, United Business Media’s PR Newswire distributed a news release stati...

By Stephen Taub • Dec. 22, 2006

How Risk-Shifting Affects Earnings

With the Financial Accounting Standards Board looking to tighten risk-transfer rules, risk managers need to be on the alert for how their companies are accounting for insurance policies that may have significant loan provisions.Up until now, FASB zeroed in on insurers and had little to say about ...

By David Katz • Dec. 22, 2006

Ex-Bakery Finance Exec Settles with SEC

The former finance chief of the maker of Twinkies and Wonder bread has settled civil charges with the Securities and Exchange Commission that he overstated earnings due to the way he accounted for workers’ compensation expenses. The company—Interstate Bakeries—also settled the same charges with t...

By Stephen Taub • Dec. 21, 2006

Four Former Enterasys Execs Convicted

Four former executives of Enterasys, including three former finance executives, were convicted by a federal jury on securities fraud and conspiracy charges stemming from a revenue recognition scheme, according to the Associated Press. The jury was unable to reach a verdict on five charges against...

By Stephen Taub • Dec. 20, 2006

CFOs: No Risk of Crisis Looming

Many chief financial officers and managing directors at multinational companies don’t think their companies will experience a major crisis for the next three years. That a good thing. Because many more within that same group don’t believe their companies are prepared to handle a catastrophe.Indee...

By Stephen Taub • Dec. 19, 2006

Guilty Plea in New Enron Scandal

In a case unconnected to the initial fraud that brought down the company, a former member of Enron Corp.’s human resources department pleaded guilty to defrauding the company of about $3 million, according to the Associated Press.Christian Deeb Rahaim, formerly senior director of benefits, admitt...

By Stephen Taub • Dec. 18, 2006

Apple, Dell Delay Filings

Two of the world’s best-known technology companies are delaying the filing of their latest financial reports because of problems with options backdating.Apple Computer says it is unable to file its annual report for the fiscal year ended September 30 because it needs to restate prior financial st...

By Stephen Taub • Dec. 15, 2006

Accountant Gets Death Penalty

A Chinese high court allowed the death penalty to stand for an accountant who was involved in defrauding bank customers out of hundreds of millions of dollars, reported the Associated Press. Earlier this week, accountant Liu Yibing, and Zhou Limin, the former head of the China Construction Bank b...

By Stephen Taub • Dec. 14, 2006

Skilling Ordered to Prison

Former Enron CEO Jeffrey Skilling has been ordered by a federal appellate judge to start his prison sentence immediately, according to the Associated Press. Skilling’s request to remain free during his appeal was turned down on Tuesday by Judge Patrick Higginbotham of the 5th U.S. Circuit Court o...

By Marie Leone • Dec. 13, 2006

Former Ahold CFO Avoids Prison

The former chief financial officer of Royal Ahold NV’s U.S. Foodservice Inc. unit will avoid spending time in prison for his role in the Dutch food giant’s massive fraud in 2003. Michael Resnick was sentenced to six months of home detention and three years’ probation, according to the Associated ...

By Stephen Taub • Dec. 12, 2006

Shrinking World

Are European shareholders closing the gap in terms of legal redress against wayward management, or is the US firming up its status as a kind of “global court” for class actions? For Ralph Stone, partner in Shalov, Stone & Bonner, the scales are tipping towards Europe. “There is an erosion of ...

By Tony McAuley and Jason Sumner • Dec. 12, 2006

Skilling’s Prison Term is Delayed

Jeffrey Skilling will remain outside of prison for a little bit longer. The 5th U.S. Circuit Court of Appeals agreed to delay his report to prison so that the court can have more time to consider a request for bail while the former Enron chief executive officer appeals his conviction, according t...

By Stephen Taub • Dec. 12, 2006

McNulty Revises Thompson Memo

U.S. deputy attorney general Paul McNulty has revised the controversial guidelines that federal prosecutors have been using for more than three years to measure the cooperativeness of companies whose employees are accused of corporate crime. These provisions, collectively called the McNulty Memor...

By Sarah Johnson • Dec. 12, 2006

Down to the Wire: Thompson Memo Revised?

Sen. Arlen Specter has made good on his threat to introduce legislation that aims to protect attorney-client confidentiality in corporate criminal cases. The measure, the Attorney-Client Privilege Protection Act, is a last-minute effort by the Republican lawmaker from Pennsylvania to get the issu...

By Sarah Johnson • Dec. 8, 2006

FASB Seeks New Derivatives Disclosures

The Financial Accounting Standards Board wants companies to disclose more details about the effects of derivatives and hedging on their financial statements.Under a proposal issued Friday, FASB would require companies to discuss their objectives and strategies for using derivatives in terms of un...

By David Katz • Dec. 8, 2006