San Diego Settles SEC Pension Charges

The city of San Diego settled charges with the Securities and Exchange Commission for failing to disclose to investors important information about its pension and retiree health care obligations when it sold municipal bonds in 2002 and 2003. Under the settlement, the city agreed to cease and desi...

By Stephen Taub • Nov. 14, 2006

Ex-Enron Finance Exec May Get Reprieve

The former chief financial officer of Enron’s shuttered broadband unit will probably spend a lot less time in prison than he had originally anticipated. The government has recommended to toss aside four of five federal convictions against Kevin Howard because it doesn’t believe the charges will s...

By Stephen Taub • Nov. 14, 2006

Please Don’t Feed the Politicians

Next election cycle, when an employee makes a personal political contribution,beware: it could harm a company’s ability to win government contracts.Many municipalities and some states are passing so-called pay-to-play rules that aredesigned to discourage contractors, and in some cases their execu...

By Helen Shaw • Nov. 14, 2006

On the Record: ABN Amro’s Former CFO

Tom De Swaan considers himself lucky. Back in the late 1990s, when he left his job at the Dutch Central Bank to become CFO of ABN Amro, he says investor relations in continental Europe was still in the early stages of development. “I was fortunate that I could learn on the job,” he says. He recko...

By Janet Kersnar • Nov. 13, 2006

A Triple Play in IP Valuation

Branding products may not be his forte. But Rick Nathan seems to have a pretty good handle on valuing brands—and other intellectual property. Nathan, a senior managing director with Trenwith Valuation, has come up with relatively new methodology for valuing IP assets, but he doesn’t have a name f...

By Marie Leone • Nov. 13, 2006

Fastow Heads to Louisiana

Andrew Fastow, the former CFO of Enron, will spend the next six years in a Louisiana federal prison 200 miles northeast of Houston, reports the Associated Press. Fastow, who was assigned to the facility on Thursday, was hoping to serve his time at a federal prison in Bastrop, Texas, about 30 mile...

By Stephen Taub • Nov. 10, 2006

Martha Stewart to Pay $5M to Settle Suit

Martha Stewart is prepared to pay $5 million of her own money to settle a $30 million class action suit that accused her of lying about her sale of stock in ImClone Systems Inc. in 2001, according to a regulatory filing by Martha Stewart Living Omnimedia (MSO).About $15 million is expected to be ...

By Stephen Green • Nov. 9, 2006

Former Ahold Exec May Face Life in Jail

Mark Kaiser, the former marketing chief of Royal Ahold NV’s U.S. unit, was convicted of conspiracy, securities fraud, and four counts of making false financial filings after a four-week trial in New York federal court, according to Bloomberg.The conviction could spawn one of the stiffest sentence...

By Stephen Taub • Nov. 9, 2006

SEC Settles With Five NextCard Execs

Five former executives of a failed dotcom company NextCard, including two former finance executives, have agreed to pay a total of about $1.4 million to settle civil charges that they engaged in alleged financial reporting fraud to conceal the deteriorating health of the company.According to the ...

By Stephen Taub • Nov. 9, 2006

Two Steps over the Line?

Corporations have long complained about the methods federal prosecutors use to gain cooperation in white-collar investigations. Now those complaints have been voiced both on the federal bench and in Congress.In September, a Senate Judiciary Committee held hearings on certain provisions of the Dep...

By Joseph McCafferty • Nov. 9, 2006

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

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

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

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

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

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

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