Backdating Fallout: D&O Coverage

The wave of scandals involving stock-option backdating threatens to push directors’and officers’ insurance premiums higher in anticipation of a surge in class-action suits.So far, restatements related to backdating have led to 19 shareholder suits, with many moreexpected over the next year. (At r...

By Laura DeMars • Nov. 8, 2006

Cox Blogs on Reg FD Web Use

Securities and Exchange Commission Chairman Christopher Cox has embraced blogging. And in what was reportedly his first communiqué via a weblog, he opened the door to discussion of the possibility of using the Web to widely disseminate information according to the dictates of Regulation Fair Disc...

By Stephen Taub • Nov. 7, 2006

A Tale of Two Insurance Markets

A tamer than expected hurricane season means no, or at least puny, rate hikes for property insurance, provided your company doesn’t operate in an area prone to disasters. According to the latest RIMS Benchmark Survey, commercial insurance premiums fell slightly in the third quarter, a continuatio...

By Stephen Taub • Nov. 7, 2006

Citigroup Settles Old WorldCom Suits

Citigroup said it settled 26 lawsuits brought by individuals who opted out of the WorldCom securities class action settlement in 2004. The world’s largest bank said in a brief announcement in its latest regulatory filing that it will be able to dip into existing reserves to cover the settlement, ...

By Stephen Taub • Nov. 6, 2006

Barclays Settles with Enron for $144 Million

Barclays has agreed to pay Enron $144 million to settle litigation stemming from the energy company’s 2001 bankruptcy. Under the agreement, Enron will allow Barclays claims filed in the bankruptcy, totaling $310 million.Barclays explained on Friday that it agreed to the settlement “because this i...

By Stephen Taub • Nov. 3, 2006

SEC Enforcement Declines 8.9 Percent

Is the Securities and Exchange Commission becoming more lax? The latest numbers would seem to say so: the SEC brought 574 enforcement actions in fiscal year 2006, the fewest amount since 2001. At the same time, budget constraints and lower staffing levels may have slowed the SEC down, according t...

By Sarah Johnson • Nov. 3, 2006

A Sarbox 404 for Political Embezzlement?

While many companies have focused on internal controls over financial reporting, few have considered implementing controls over their political action committees (PACs). That may change soon.The Federal Election Commission has proposed an embezzlement-controls policy that creates a safe harbor fo...

By Helen Shaw • Nov. 3, 2006

Water Cooler ex-CFO Found Guilty of Lies

The former finance chief of a small water cooler company pleaded guilty to lying to his auditors about the company’s 2001 initial public offering. Gary Wolff, ex-CFO of AquaCell Technologies and a founder of the company, pled guilty to one count of making false and misleading statements on Tuesda...

By Stephen Taub • Nov. 1, 2006

Enron Could Recoup Lay Insurance Payment

Enron Corp. has agreed to a deal to collect $250,000 on a life insurance policy covering Ken Lay, who died several weeks after he was convicted of fraud charges, according to the Houston Chronicle. That is a fraction of the coverage limit on an $11 million death benefit owed under Transamerica O...

By Stephen Taub • Nov. 1, 2006

Krispy Kreme Files 10-K, Settles Lawsuit

Embattled Krispy Kreme Doughnuts, its chief executive happy to even be able to even file a 2006 10-K, reported a net loss of $136 million that included non-cash impairment charges of $54 million and a non-cash charge of $36 million tied to the settlement of litigation. Separately, the company ann...

By Stephen Taub • Nov. 1, 2006

A Supreme Court Case to Haunt Execs

A Supreme Court case being heard on Halloween seems sure to haunt companies for some time to come. At issue: whether the High Court will agree with earlier decisions that punitive damages awarded in civil cases should remain uncapped, thereby giving juries the choice of awarding plaintiffs multi-...

By Marie Leone • Oct. 31, 2006

Sony a Target of DOJ Probe

Sony Corp. announced on Tuesday that its U.S. subsidiary, Sony Electronics Inc., has received a subpoena from the U.S. Department of Justice Antitrust Division seeking information about its static random access memory (SRAM) business. The embattled technology giant did not provide any more detail...

By Stephen Taub • Oct. 31, 2006

Burn Prevention for Creditors

The bankruptcy law that went into effect last year is beginning to deliver benefits to creditors, especially small businesses.The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) changed the so-called “preference” provisions of the bankruptcy code. That, in turn, is making...

By Helen Shaw • Oct. 31, 2006

Max Re Chairman Resigns

Remember the finite insurance scandal? It has become all but forgotten amid the options backdating troubles that have grabbed the corporate wrongdoing spotlight.On Sunday, however, Max Re Capital announced that Robert J. Cooney has resigned as chairman and chief executive officer. In the same pre...

By Stephen Taub • Oct. 30, 2006

GAO to Probe SEC

The Securities and Exchange Commission has just become the target of a broad investigation.The Government Accountability Office last week agreed to investigate the regulator’s management and methods for policing the financial markets, according to Bloomberg. The securities regulator has been unde...

By Stephen Taub • Oct. 26, 2006

Fearful of Feds, Companies Investigate Themselves

A majority of companies have hired outside counsel to help with an internal investigation in the past year – a sign that companies are concerned about how their handling of problems will be perceived by regulators and the public.About 63 percent of over 400 U.S. and international companies survey...

By Helen Shaw • Oct. 26, 2006

SEC Clears Perle in Hollinger Probe

Richard Perle is off the hook. The Securities and Exchange Commission told the former defense department official that he will not be face civil charges for his actions as a director of Hollinger International, according to the Associated Press.Perle was dragged into the case in November 2004 whe...

By Stephen Taub • Oct. 24, 2006

Skilling is Sentenced to 24 Years in Prison

Former Enron Chief Executive Officer Jeffrey Skilling was sentenced to 24 years, four months in prison for his role in the collapse of the one-time energy giant, which has come to symbolize the era of corporate fraud cases at the beginning of the millennium. Skilling was ordered to home confineme...

By Stephen Taub and Marie Leone • Oct. 23, 2006

Biopharm Company Receives Wells Notices

The Securities and Exchange Commission staff plans to recommend that the regulator bring a civil action against Inspire Pharmaceuticals, a smaller public company with $213 million in market capitalization.The Durham, North Carolina, company made the announcement on Monday after receiving three We...

By Sarah Johnson • Oct. 23, 2006

WorldCom Investors to Receive $150 Million

Investors in WorldCom who were victimized by the former telecom giant’s massive fraud are about to recover some of their lost money.Securities and Exchange Commission Chairman Christopher Cox announced late Friday that regulator “will begin immediately” distributing up to $150 million from its “F...

By Stephen Taub • Oct. 23, 2006

What Skilling’s Sentencing Means

Nearly five years have passed since Enron’s shocking and spectacular demise from the seventh largest company in the United States to a bankrupt, hollow shell of an organization. At the time, amid financial fraud fallouts at WorldCom, Tyco, and Adelphia, there was talk of long prison terms for tho...

By Sarah Johnson • Oct. 20, 2006

SEC Probing Private Equity, Hedge Funds

Illegal insider trading is apparently a growing concern at the Securities and Exchange Commission. In fiscal 2006 ended in September, 20 percent of all SEC probes opened dealt with insider trading, up from 18 percent the prior year and 17 percent in fiscal 2004, according to Reuters. SEC Chairman...

By Stephen Taub • Oct. 19, 2006

Derivatives Spur Odyssey Re Restatement

To correct the way it accounted for its investments in convertible bonds and derivatives, Odyssey Re Holdings Corp. filed an amended 10-K that restated the property-casualty reinsurer’s results for the five years ended 2005. The result: a net increase in shareholders’ equity of $16 million as of ...

By Stephen Taub • Oct. 18, 2006

Ken Lay’s Record Cleared of Convictions

Former Enron chairman Kenneth Lay’s conviction for criminal charges related to the company’s spectacular collapse was vacated by a federal judge in Houston Tuesday.Lay died on July 5th of a heart attack, six weeks after being found guilty of 10 criminal counts. On that day, CFO.com broke the news...

By Tim Reason • Oct. 17, 2006

Former i2 CFO to Pay $2.1M to SEC

The former chief financial officer of i2 Technologies has agreed to pay more than $2.1 million to settle civil charges with the Securities and Exchange Commission for his role in an alleged scheme to overstate revenues.William M. Beecher, one of three former officers of the Dallas-based software ...

By Stephen Taub • Oct. 17, 2006