Senate Hearing to Probe SEC-Pequot Case

Eric Ribelin, a branch chief in the Securities and Exchange Commission’s Office of Market Surveillance, will testify before a Senate Committee today regarding how the regulator handled its investigation of hedge fund Pequot Capital Management. Rebelin is the second SEC official to raise questions...

By Marie Leone • Dec. 5, 2006

Pequot Case: ‘The Plot Grows Thicker’

“The plot grows thicker,” declared Senate Judiciary Committee Chairman Arlen Specter at the conclusion of a Tuesday hearing aimed at finding out if the Securities and Exchange Commission mishandled an investigation into Pequot Capital Management and later violated the rights of a whistleblower.“I...

By Marie Leone • Dec. 5, 2006

Wal-Mart Settles Life Insurance Lawsuit

Wal-Mart Stores has settled a $5.1 million class-action lawsuit involving the proceeds of corporate-owned life insurance policies that plaintiffs claimed the retailer wrongfully received after the employees died, according to the Associated Press.The estates of 73 former Wal-Mart Stores employees...

By Stephen Taub • Dec. 5, 2006

Wal-Mart Whistle-blower Drops Lawsuit

A Wal-Mart whistle-blower has abruptly dropped a lawsuit against the world’s largest retailer. Jared Bowen, who claimed he was fired when he called attention to a fraud committed by former number-two Wal-Mart executive Tom Coughlin, decided to drop claims filed in state court that the retailer de...

By Stephen Taub • Dec. 1, 2006

HP CFO, Execs Accused of Insider Trading

The chief financial officer of Hewlett-Packard is one of five individuals accused of insider trading in an amended complaint filed earlier this week, according to The Houston Chronicle. The suit accuses CFO Bob Wayman, CEO Mark Hurd, and directors Lucille Salhany and Lawrence Babbio of participat...

By Stephen Taub • Dec. 1, 2006

Should You Buy D&O ASAP?

Just three years ago, directors’and officers’ (D&O) insurance rateswere so high that Ron Foster, thenCFO for troubled fiber-optics giant JDSUniphase, threatened to set up a self-insuredfacility with other companies ratherthan pay the prices insurance companieswere demanding.That approach woul...

By Alix Stuart • Dec. 1, 2006

The 5 Cent Empire

The long buses start rolling into the parking lot at the Grand Casino Mille Lacs long before the morning mist has lifted from the marshlands and maple trees. A steady line of white-haired warriors, armed with supersized plastic cups and beaded change purses, pile out of the buses and head straigh...

By John Goff • Dec. 1, 2006

Wells Fargo, Ameriprise Require Majority Votes

Wells Fargo and Ameriprise Financial are the latest to join the growing roster of companies—including some of the largest in the world—that are requiring their boards of directors to receive a majority of the votes cast by shareholders in uncontested director elections.Both companies said they ex...

By Stephen Taub • Nov. 30, 2006

Capital Markets Report Urges 404 Fixes

The Committee on Capital Markets Regulation today officially released its first report, which calls for a fix of section 404 of the Sarbanes-Oxley Act, the internal controls provision, before it is required for smaller companies.That was just one of the recommendations in the 135-page report by t...

By Helen Shaw • Nov. 30, 2006

Taub to Leave SEC

In a big blow to the Securities and Exchange Commission, Scott A. Taub, deputy chief accountant in the Office of the Chief Accountant, will leave the regulator later this year.Taub is credited with playing a key role in the Commission’s implementation of the accounting reforms under the Sarbanes-...

By Stephen Taub • Nov. 29, 2006

EU Fines Dow, Four Others

The European Commission fined five companies a total of $682 million for fixing the price of synthetic rubber used to make tires, including U.S.-based Dow Chemical, according to the Associated Press. The other four companies were Royal Dutch Shell plc, Eni SpA, Unipetrol AS and Trade-Stomil, acco...

By Stephen Taub • Nov. 29, 2006

How Do We Reduce Misstatements?

While you’re making lists for the holiday season, here’s one more to consider: Suggestions from corporate financial executives about how to cut down on the number of restatements. Earlier in the year, the Securities and Exchange Commission asked executives to submit ideas that would help squelch ...

By Helen Shaw • Nov. 27, 2006

Ford Sales in Syria, Sudan Are Questioned

The Securities and Exchange Commission has raised disclosure issues with regard to Ford Motor operations in several countries deemed by the U.S. to be state sponsors of terrorism. In a letter fired off on July 5—but released last Friday by the regulator—the Commission asserted that the automaker’...

By Stephen Taub • Nov. 27, 2006

Former EDS CFO Headed to Prison

Another finance executive is headed to prison. Joseph Amato, the former chief financial officer of Electronic Data Systems’ Global Securities Industry Group was sentenced to one year and one day in prison for the role he played in a scheme to defraud EDS out of millions of dollars, according to t...

By Stephen Taub • Nov. 22, 2006

Prosecutors Drop Fight to Convict Lay

Federal prosecutors have chosen to abandon their appeal of U.S. District Judge Sim Lake’s ruling last month vacating fraud and conspiracy charges against the late Kenneth Lay for his role in Enron’s collapse, according to the Associated Press.The judge said the death of Lay, the founder of the...

By Stephen Taub • Nov. 21, 2006

Former Capital One CFO to Pay $1.8 Million

A former chief financial officer of Capital One Financial agreed to pay $1.8 million to settle insider trading charges by the Securities and Exchange Commission.The regulator filed its complaint against David M. Willey in July 2004, alleging he traded securities of the bank holding company knowin...

By Stephen Taub • Nov. 21, 2006

On Message

The scene on July 31st this year was reminiscent of the face-off between Gordon Gekko and Teldar Paper executives at the stockholders meeting in the 1980s film Wall Street, with billionaire investor Nelson Peltz in the Gekko role, and Heinz CEO William Johnson leading the somewhat hapless executi...

By Tony McAuley • Nov. 20, 2006

Two More Enron Officials Sent to Prison

Two more former Enron Corp. executives, including a key assistant to former chief financial officer Andrew Fastow, were sentenced on Friday for their roles in the 2001 collapse of the onetime energy giant. However, they each received much lighter sentences than the maximum allowed.Michael Kopper,...

By Stephen Taub • Nov. 17, 2006

Rule Britannia

Sarbanes-Oxley is one American creation the British are taking pains not to import. UK Economic Secretary to the Treasury Ed Balls made that point clear when he recently proposed granting new powers to Britain’s financial regulator, the Financial Services Authority. In an effort to preserve Brita...

By Kate O'Sullivan • Nov. 17, 2006

Skilling to Start His Prison Term Next Month

Former Enron CEO Jeffrey Skilling, who has been confined to his Houston home since his sentencing last month, is scheduled to begin his prison term of 24 years and four months in mid-December. On Wednesday, U.S. District Judge Simeon Lake ordered Skilling to surrender to a federal prison in Wasec...

By Sarah Johnson • Nov. 16, 2006

Hot on the Press

The internet is generally regarded as a threat to the media industry as a whole, with newspapers as its first victims. So at first glance it looks odd that, on October 23rd, at least three private-equity firms reportedly made initial bids to buy the Tribune Group, a conglomerate with a market cap...

By Economist Staff • Nov. 16, 2006

Dell Faces Formal SEC Probe

Dell said the Securities and Exchange Commission’s informal probe into certain accounting and financial reporting matters has been turned into a formal investigation. The computer maker did not elaborate and did not identify the accounting matter.However, Dell spokesman Jess Blackburn told CFO.co...

By Stephen Taub • Nov. 16, 2006

Ex-Enron Accounting Exec Gets 5 Years

The last of the alleged key architects of Enron’s massive accounting scandal is headed to prison for his role in the scandal. Richard Causey, the company’s former chief accounting officer, was sentenced to five-and-a-half years in prison, according to the Associated Press. This is six fewer month...

By Stephen Taub • Nov. 15, 2006

New 10-K Deadline Pressures Firms

The new, shorter quarterly filing deadline that looms for large companies with a public float of at least $700 million will bring yet another challenge for finance departments—and could cause more companies to request filing extensions.The Securities and Exchange Commission’s Form 10-K deadline f...

By Helen Shaw • Nov. 15, 2006

Under The Microscope

First it was hedge funds, now private-equity firms. From the executive suites of Europe’s biggest companies to the bureaucratic cubicles of Washington, DC, there are growing calls for stricter oversight of buy-out firms, which lately have marched from one big takeover to another. The most recent ...

By Economist Staff • Nov. 14, 2006