Court Goes Easy on Qwest CFO

Former Qwest chief financial officer Robin Szeliga is not going to prison.Szeliga, who the Associated Press called the highest-ranking executive from Qwest to plead guilty in the telecom company’s accounting scandal, was sentenced to two years’ probation, six months of home detention, and a $250,...

By Stephen Taub • July 28, 2006

Political Paycheck Deductions Get Easier

As the fall election season approaches, a recent policy change by the Federal Election Commission (FEC) could ease the recordkeeping burden for payroll departments, as well as for the finance executives who are often responsible for managing their company’s political action committee (PAC).As of ...

By Helen Shaw • July 28, 2006

Backdating Flap Could Make Insurers Wary

With some eighty companies reportedly being investigated by the Securities and Exchange Commission over the possible illegal backdating of stock options, a set of related worries is cropping up among senior managements: the emergence of backdating-related shareholder lawsuits and the possible dwi...

By Jaclyn Marie • July 25, 2006

Cox: SEC Lacks Hedge Fund Power

Diffident about asking Congress to restore some of the power to regulate hedge funds that the Securities and Exchange Commission recently lost in court, SEC Chairman Christopher Cox told the Senate Banking Committee on Tuesday that he was making moves to rapidly take back at least some of the com...

By David Katz • July 25, 2006

Trade Groups: Dump Quarterly Guidance

Two trade group have called on companies and other stakeholders to end the practice of providing quarterly earnings guidance.The CFA Centre for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics issued a report calling on corporate leaders, asset managers, inves...

By Stephen Taub • July 25, 2006

Ex-HealthSouth CFO to Pay $6.9 Million

A former HealthSouth chief financial officer has agreed to pay at least $6.9 million for his role in the health care company’s $2.7 billion accounting fraud.Under the deal, Weston Smith, one of the five former HealthSouth CFOs who pleaded guilty and testified against their onetime boss, former ch...

By Stephen Taub • July 24, 2006

Morgan Stanley Chief Will Testify to SEC

Morgan Stanley chief executive officer John Mack will talk to the Securities and Exchange Commission regarding its investigation into possible insider trading at hedge fund Pequot Capital Management Inc., according to published reports.“Yesterday, the SEC contacted John Mack and asked that he be ...

By Stephen Taub • July 21, 2006

Next from Sarbox: Industry Exemptions?

Dig up evidence of document retention procedures for auditors, or work on a viable treatment for prostate cancer. Print out screen shots that support testing of general computer controls, or answer an important phone call from a high net worth client. The choice is obvious for biotech and communi...

By Jabulani Leffall • July 21, 2006

Andrew Fastow’s Sentencing Delayed

The sentencing of Andrew Fastow, the former Enron CFO, has been put off one month.Fastow was slated to learn how much time he would spend in prison on August 28. Now, he will wait until September 26, according to the Houston Chronicle.The paper noted that sentencing delays in complex criminal cas...

By Stephen Taub • July 20, 2006

A Sarbox Legacy: Alan Beller

Most CFOs won’t forget Alan Beller. He is credited with overseeing the implementation of more than 15 rule-making efforts related to the Sarbanes-Oxley Act, including those requiring certification of the accuracy of financial reports by chief executive officers and chief financial officers. As he...

By Stephen Taub • July 20, 2006

Partners in Liability?

Are a company’s business partners liable in shareholder lawsuits against the company? A recent appeals court ruling on that question may have muddied the water enough to force the Supreme Court to impose a little clarity in this already murky area.The case, Simpson v. AOL Time Warner, turns on wh...

By Rob Garver • July 19, 2006

Fed Governor: Sarbox Spurs Cash Jitters

A widespread aversion to risks spawned by corporate scandals and the Sarbanes-Oxley Act has helped push corporations to shore up whopping cash positions on their balance sheets, according to Federal Reserve Governor Kevin Warsh. In a speech Tuesday at the American EnterpriseInstitute, Warsh obse...

By Stephen Taub • July 18, 2006

Fastow to Testify Against NatWest Three

Examine our Enron archiveEnron’s former chief financial officer, Andrew Fastow, and one-time managing director, Michael Kopper, are expected to testify at the trial of the so-called NatWest Three, according to the British-based Guardian..The three former bankers, David Bermingham, Giles Darby, an...

By Stephen Taub • July 17, 2006

SEC Likes Its Own Plain English

Two years ago, the Securities and Exchange Commission began publicly releasing letters its staff writes to public companies when they have a comment — typically an objection of some kind — on the company’s public filing. A recent review of comments made about company 10Q filings suggests a consis...

By Tim Reason • July 14, 2006

How Regulation Drives up Insurance Costs

Assistant treasurers and corporate risk managers are linking up with the insurance industry to try to get Congress to strip the current insurance regulatory system of red tape. The effort, if it succeeds, could offer companies the chance to buy coverage from a federally regulated insurer rather ...

By David Katz • July 13, 2006

House Approves Rating Agency Shakeup

The U.S. House of Representatives approved a bill Wednesday — aimed squarely at Moody’s and Standard & Poor’s — that would alter the regulatory landscape for all credit-rating agencies.The “Credit Rating Agency Duopoly Relief Act of 2006” was approved by a 255-166 vote. If the bill also passe...

By Helen Shaw and Tim Reason • July 12, 2006

Insurers Seek Freedom from States

Property-casualty and life insurers should be able to take their pick between federal oversight and the current 50-state insurance regulatory system, top insurance executives told the Senate Banking Committee Tuesday.Speaking in support of the National Insurance Act of 2006, a bill sponsored by c...

By David Katz • July 11, 2006

Will COSO Small Biz Guidance Really Help?

Internal controls haven’t made executives at many small companies happy lately as they struggle to comply with Sarbanes-Oxley regulations.But you wouldn’t know that from Tuesday’s quirky introduction to new guidance intended to help those smaller companies assess their controls. “People in contro...

By Helen Shaw • July 11, 2006

SEC: More Questions than Answers on 404

Two months and one day after a contentious roundtable in which companies voiced their continuing displeasure with Section 404 of the Sarbanes Oxley Act, the Securities and Exchange Commission has responded, although primarily with more questions for public companies.The concept release, published...

By Marie Leone • July 11, 2006

“NatWest Three” Head to US for Trial

Examine our Enron archiveThree British bankers have exhausted their efforts to fight extradition to the United States, and will be flown to Texas on Thursday, July 13, to face fraud charges related to Enron, Bloomberg reports. David Bermingham, Gary Mulgrew, and Giles Darby, former executives at ...

By Tim Reason • July 10, 2006

Did News Corp. Violate Reg FD?

Did News Corp. chief executive officer Rupert Murdoch violate Reg FD when he invited only a select group of investors to a meeting in Australia last week?According to a report by Reuters, most shareholders did not learn how much revenue News Corp.’s critical Internet business MySpace.com would ge...

By Stephen Taub • July 7, 2006

Glassman: SEC Needs Lesson in Economics

Cynthia Glassman, a Republican Securities and Exchange commissioner who was appointed in 2002 and will not seek a second term, called for economically sound regulation in a speech before the National Economists Club in Washington, D.C., on Thursday. Glassman, whose term expired in June, will cont...

By Helen Shaw • July 7, 2006

SEC Ends Material Sciences Probe

Material Sciences Corp. said the Securities and Exchange Commission has concluded its review of the company’s material weaknesses reported for fiscal 2005.The company did not say what the results of the review were. Investors, apparently inferring from the announcement that the SEC had found no w...

By Stephen Taub • July 7, 2006

Feds Back Sarbox Whistle-blower

Late Thursday, the Department of Labor filed a motion to intervene in what is reportedly the first Sarbanes-Oxley whistle-blower case to go to trial. The motion, along with a 13-page memorandum in support of former Cardinal Bankshares CFO David Welch’s application for reinstatement, was released ...

By Marie Leone • July 7, 2006

Coke, Pepsi Bury Hatchet, Solve Crime

The Coke-Pepsi rivalry took a bizarre twist when several Coca-Cola employees who had reportedly tried to sell trade secrets were taken into custody by federal authorities Wednesday after Pepsi tipped Coke off to the scheme. Three suspects were charged with stealing confidential information—includ...

By Stephen Taub • July 6, 2006