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

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

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

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

DoL Sues Agway Directors on 401(k)

The U.S. Department of Labor is suing the fiduciaries of a liquidated company, accusing 47 directors of “imprudently” investing $50 million of its 401(k) plan in the company’s securities. That investment allegedly overvalued the stock and gave employees misleading information.In a suit filed with...

By Sarah Johnson • Oct. 16, 2006

SEC Charges Six with Inflating Revenue

The Securities and Exchange Commission filed a complaint against five former officers — included two finance executives — and one former employee of Riverstone Networks, Inc., a telecom equipment company, accusing them of fraudulently inflating revenues.The suit was filed in U.S. District Court f...

By Stephen Taub • Oct. 16, 2006

SEC Settles Bribery Charges with Statoil

The Securities and Exchange Commission announced it has settled charges that Norway-based Statoil ASA, a multinational oil company listed on the New York Stock Exchange, violated the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign government officials. The Commission’s or...

By Stephen Taub • Oct. 16, 2006

SEC Charges Three Enron Executives

The Securities and Exchange Commission has charged a former Enron accountant/executive and two former executives with fraud and aiding and abetting Enron’s violations of the reporting, record-keeping, and internal controls provisions of securities laws. The three ex-officials, former accountant a...

By Sarah Johnson • Oct. 16, 2006

Homestore Founder Wolff Gets 15 Years

Stuart Wolff, the founder and former chief executive of Homestore Inc., was sentenced Thursday to 15 years in prison and ordered to pay $8.64 million in restitution and a $5 million fine for his role in a scheme to defraud investors.As CFO.com reported this summer, Homestore’s fraud became the su...

By Stephen Taub and Rob Garver • Oct. 13, 2006

Prosecutors May Appeal Fastow’s Term

Prosecutors may appeal the six-year prison sentence recently handed to former Enron CFO Andrew Fastow, according to The Houston Chronicle.The brevity of the term reportedly stunned former Enron employees. Fastow had previously agreed to a 10-year sentence under a plea deal.The shorter sentence ap...

By Stephen Taub • Oct. 13, 2006

Execs Still Waiting for 404 Help

Four years after the passage of the Sarbanes-Oxley Act, corporate managers are still seeking guidance on compliance with Section 404, the provision of the law that requires management and auditor assessments of the effectiveness of internal controls over financial reporting.To be sure, the Securi...

By Helen Shaw • Oct. 13, 2006

U.S. Companies Spending a Fortune in Court

A survey of corporate counsel finds that U.S. companies face a staggering average of 305 lawsuits at any given time. It also notes that government inquiries — particularly from the Securities and Exchange Commission and the Occupational Safety & Health Administration — and internal investigat...

By Tim Reason • Oct. 12, 2006