Cisco Settles Suit for $92 Million

Cisco Systems Inc. has agreed to pay nearly $92 million to settle a class- action lawsuit filed against the company and certain current and former directors and officers.Filed in 2001, the lawsuit charged that the company misled buyers of its stock. The plaintiffs also alleged that defendants nam...

By Stephen Taub • Aug. 18, 2006

Lay Innocent? No Way, Feds Say

Attorneys representing Kenneth Lay’s estate are moving toward erasing the convictions and dismissing the indictment against the former Enron Corp. chairman, who died on July 5, of heart failure. However, Federal prosecutors are determined not to let this happen.Prosecutors made it clear that the...

By Tim Reason and Stephen Taub • Aug. 17, 2006

Defending Against Backdating Suits

Some shareholder lawsuits linked to backdating stock option grants are more straightforward than others. Consider the headline-grabbing case of Kobi Alexander, the former Comverse Technology CEO. The Wall Street Journal reported that Alexander allegedly fled the country to avoid a backdating inve...

By Marie Leone • Aug. 16, 2006

New CFO Steps into the Fire at CA

When Nancy Cooper officially takes over as executive vice president and CFO of CA on Tuesday, she begins a one-month race with the clock to help the company avert fraud and obstruction of justice charges. Cooper, who formerly served as finance chief for IMS Health Inc., a provider of pharmaceutic...

By Stephen Taub • Aug. 15, 2006

Feds Want Skilling to Pay Lay’s Share

The government wants restitution from the collapse of Enron Corp. and is hoping that former CEO Jeffrey Skilling pays the tab.Skilling may have to cough up nearly $183 million if federal prosecutors are able to get their way, according to the Associated Press. In June, prosecutors asked U.S. Dist...

By Stephen Taub • Aug. 14, 2006

Former Wal-Mart Exec Avoids Prison

Wal-Mart’s former number-two executive is not going to prison after all.Thomas Coughlin was sentenced Friday in federal court to 27 months of home detention and five years of probation, according to the Associated Press. He had earlier pleaded guilty to stealing money, merchandise, and gift cards...

By Stephen Taub • Aug. 11, 2006

Nacchio Prosecutor Withdraws from Case

The lead prosecutor in the Joseph Nacchio insider-trading case, Bill Leone, has withdrawn because he is returning to private practice.Leone, the acting U.S. Attorney for Colorado, said he will stay to help with the transition, according to the Associated Press. He is the second prosecutor to leav...

By Stephen Taub • Aug. 11, 2006

CFO Resigns, Company Settles Suit

Willbros Group announced on Thursday that Warren Williams resigned as senior vice president and chief financial officer.In a separate announcement, the independent energy contractor said it agreed to settle a class-action lawsuit accusing the company and three present and former officers and dire...

By Marie Leone • Aug. 10, 2006

SEC Extends Small-Company 404 Deadlines

The Securities and Exchange Commission on Wednesday granted smaller public companies, including many foreign private issuers, extensions for complying with Section 404 of the Sarbanes-Oxley Act.Further, the SEC has proposed that newly public companies not be required to meet Section 404 requireme...

By Stephen Taub • Aug. 9, 2006

Martha Stewart Settles with the SEC

Martha Stewart agreed to pay $195,000 to settle civil insider trading with the Securities and Exchange Commission stemming from her sale of ImClone Systems stock in December 2001.The sum represents disgorgement of losses she avoided, and the maximum penalty of three times the losses she avoided.S...

By Stephen Taub • Aug. 7, 2006

Former Apparel CFO Sentenced to Prison

The former chief financial officer for an Alabama-based apparel maker was sentenced Friday to more than three years in prison and ordered to pay back $5.4 million for his role in a fraud, according to the Associated Press.Rudolph Terry, the former CFO of Terry Manufacturing, a family-owned busine...

By Stephen Taub • Aug. 7, 2006

Size Matters for IP Portfolios

Bad news if you’re a small tech, biotech, or media company: you’re not going to grow.That’s the blunt conclusion of a new study, which says organic growth is not an option for companies that live and die by intellectual property, but have fewer than 200 licensing agreements in their IP portfolio....

By Marie Leone • Aug. 4, 2006

Motorola Named in Adelphia Probe

Motorola Inc. said in a regulatory filing that it is involved in an ongoing investigation by the Securities and Exchange Commission regarding Adelphia Communications Corp.The company added that on June 23, Adelphia objected to Motorola’s claim for payment and asserted “causes of action including ...

By Stephen Taub • Aug. 4, 2006

Senate to Vote on Credit Rating Agency Bill

Legislative efforts to radically alter the competitive landscape for credit rating agencies continue to wend their way through Congress with few modifications. On Tuesday, the Senate Banking Committee passed a markup of the Credit Rating Agency Reform Act bill. This follows the movement of a simi...

By Tim Reason and Marie Leone • Aug. 3, 2006

Sullivan’s Wife to Keep $2.2 Million

Under settlement proposed by the Securities and Exchange Commission, Carla Sullivan, wife of former Worldcom CFO Scott Sullivan, will be able to keep $2.2 million, according to Bloomberg.Last week, CFO.com reported that the SEC recommended waiving $13.5 million in disgorgement and civil penaltie...

By Stephen Taub • Aug. 3, 2006

Toward a Global Regulator?

With the United States and Europe moving toward converging financial reporting standards globally, regulators worldwide are scrambling to harmonize their efforts, too.Like Robert Herz and Sir David Tweedie, of the Financial Accounting Standards Board and the International Accounting Standards Boa...

By Stephen Taub • Aug. 2, 2006

El Paso Settles Lawsuits

Officials at El Paso Corp. announced that they settled a shareholder class action and a derivative lawsuit that alleged that the energy company disseminated false and misleading financial information.Under the terms of the shareholder class action settlement, El Paso and its insurers will pay a t...

By Stephen Taub • Aug. 2, 2006

Paulson: Regs Went Too Far

Treasury secretary Henry Paulson is the latest among a growing number of government and corporate leaders to suggest that the Sarbanes-Oxley Act and other regulatory changes passed in recent years have gone too far.In a speech Tuesday at Columbia University, the former head of Goldman Sachs, who ...

By Stephen Taub • Aug. 1, 2006

SEC Sues Five for Financial Fraud

The Securities and Exchange Commission has filed financial fraud charges against five former executives of office products and computer supply distributor Daisytek International.The SEC alleges that the former officers—James Powell, CEO and president; Ralph Mitchell, CFO; Mark Corjay, controller;...

By Stephen Taub • Aug. 1, 2006

Time And Time Again

If there’s one Delaware Court of Chancery decision that Chancellor William Chandler second-guesses, it is the 16-year-old case of Paramount Communications v. Time, which upheld Time Inc.’s business judgment in rejecting a large acquisition offer in favor of pursuing its own merger plans.His feeli...

By Roy Harris • Aug. 1, 2006

Disney’s Deeper Meaning

If Walt Disney Co. was the one facing a judge in Georgetown, Delaware, the court itself was also on trial in a way. In Chancellor William Chandler’s view, it acquitted itself quite well. Over several months of 2004 and into 2005, the marathon case served “to demonstrate the Delaware Court of Chan...

By Roy Harris • Aug. 1, 2006

Legal Levity

Even during a deadly serious derivative-suit debate, humor seems to find a place in the courtroom of Delaware Vice Chancellor Leo Strine.His love for one-liners — even lame ones — can make hearings in his 12th-floor court in downtown Wilmington resemble open-mike night at the Improv. To explain h...

By Roy Harris • Aug. 1, 2006

Regulators Probe Biovail’s Melnyk

Officials at Canadian pharmaceutical maker Biovail said the staff of the Ontario Securities Commission (OSC) has made allegations against company Chairman Eugene Melnyk and a former director, among others.The OSC, which regulates securities in the province of Ontario, charges that Melnyk violated...

By Stephen Taub • July 31, 2006

Happy Birthday, Sarbox!

When the Sarbanes-Oxley Act came squalling into existence on July 30, 2002, it was widely viewed as an unruly baby, spawning humongous costs and heavy compliance burdens for Corporate America. Now, on its fourth birthday, the law is being viewed in some circles as an amiable child — still difficu...

By David Katz • July 28, 2006

Ebbers Loses Appeal: Faces 25 Years

It looks like Bernie Ebbers is headed to prison.A federal appeals court upheld the former WorldCom chief executive’s conviction on charges stemming from the telecom company’s massive accounting fraud, according to the Associated Press.The decision sets the stage for Ebbers to begin serving a 25-y...

By Stephen Taub • July 28, 2006