Lay’s Death Clears His Record

The death of former Enron chairman Kenneth Lay will clear his record of his conviction, and even his indictment, ending Department of Justice efforts to recover Lay’s bonuses and other earnings. The legal doctrine, known as the abatement doctrine, will also likely complicate efforts by the Securi...

By Marie Leone and Tim Reason • July 5, 2006

Enron’s Lay Dies of Heart Attack

Examine our Enron archiveKenneth Lay has died of a heart attack.The 64-year-old former chairman of Enron, who was recently convicted of all six charges against him for his role in the one-time energy giant’s collapse, was scheduled to be sentenced later in the year.He had faced a prison term that...

By Stephen Taub • July 5, 2006

What Do You Know?

When one of Mobility Electronics Inc.’s major customers decided to switch to a competitor’s product five years ago, the potential defection galvanized top management. Not only would it mean up to $10 million in lost revenue annually, says executive vice president and CFO Joan Brubacher, but Mobil...

By Linda Corman • July 1, 2006

Hungry for More

Carol DiRaimo was fed up. Last February, the head of investor relations for Applebee’s International began an earnings call by urging analysts to stop hounding the restaurant chain’s franchisees for confidential information. Callers were frequently “rude and disruptive,” complained DiRaimo, even ...

By Kate O'Sullivan • July 1, 2006

Did Politics Quash an SEC Probe?

Senior SEC officials stopped a hedge fund probe because one of the subjects of the investigation “had powerful political connections…at the highest level,” according to former Securities and Exchange Commission investigator Gary Aguirre.Testifying on Wednesday before the Senate Judiciary Committe...

By David Katz • June 29, 2006

Scrushy, Former Governor Convicted

Richard Scrushy may find himself behind bars after all.On its eleventh day of deliberations, a federal jury has convicted the founder and former chief executive officer of HealthSouth on a number of charges involving former Alabama governor Don Siegelman, according to the Birmingham Press-Registe...

By Stephen Taub • June 29, 2006

Security Company, Execs Settle with SEC

The Securities and Exchange Commission has settled civil charges with PowerLinx, a small maker of security products and underwater cameras formerly known as SeaView Video Technology, and two former executives.The SEC had charged that the company, former chief executive officer George Bernardich I...

By Stephen Taub • June 29, 2006

Union Seeks to Further Humble Home Depot

Some shareholders are still upset about last month’s Home Depot annual meeting, at which chairman and chief executive officer Robert Nardelli was the only board member in attendance.Earlier this week the pension plan of the American Federation of State County and Municipal Employees sent a “deman...

By Stephen Taub • June 29, 2006

Cardinal Refuses to Reinstate CFO

In a widely watched whistleblower case, Cardinal Bankshares yesterday decided once again to refuse a Department of Labor judge’s recommended order to reinstate the bank’s former CFO, David Welch, the company’s outside attorney Laura Effel told CFO.com. Instead, the bank holding company plans to w...

By Marie Leone • June 28, 2006

Judge: Feds Forced KPMG to Abandon Employees

A federal judge admonished prosecutors for pressuring KPMG to cut off legal fees for 16 former employees charged in the tax shelter scandal, according to the Associated Press.Although KPMG chose to not pay the legal bills, US District Judge Lewis A. Kaplan blamed a Justice Department policy going...

By Stephen Taub • June 27, 2006

SEC: Morgan Stanley Lax on Insider Trading

Morgan Stanley has agreed to pay $10 million to settle Securities and Exchange Commission charges that it failed to maintain and enforce adequate written policies and procedures to prevent insider trading over a number of years.In its complaint, the investment banking giant was accused of failing...

By Stephen Taub • June 27, 2006

Enron’s UK Bankers Closer to US Trial

Examine our Enron archiveThree former Enron bankers in Britain moved closer to facing fraud charges in the US when the European Court of Human Rights refused to halt extradition proceedings Tuesday, according to the Associated Press.David Bermingham, Gary Mulgrew, and Giles Darby, former executiv...

By Stephen Taub • June 27, 2006

Probation for Former Enron Finance Exec

Examine our Enron archiveA former Enron finance employee, regarded as a bit player in the company’s massive fraud, was sentenced to two years’ probation for filing false income tax returns, according to the Houston Chronicle.In November 2002, Larry Lawyer pleaded guilty to failure to report $79,4...

By Stephen Taub • June 26, 2006

Risk Management: More Talk Than Action

A new survey of 230 financial executives says companies recognize the importance of enterprise risk management, but fall short when it comes to implementation.A majority of executives — 58 percent — reported that their company has an enterprise risk management approach and philosophy that conside...

By Stephen Taub • June 23, 2006

Brits May Face Enron Charges in U.S.

Examine our Enron archiveThree British bankers facing charges by the Enron Task Force have one final opportunity to avoid extradition to the United States.In February the extradition appeal of David Bermingham, Gary Mulgrew, and Giles Darby was rejected by the British High Court, according to the...

By Stephen Taub • June 22, 2006

Greenberg-led Company Sues AIG

A company controlled by former American International Group chairman and chief executive officer Maurice “Hank” Greenberg is taking AIG to court.Starr International, which holds a 12 percent stake in the insurance giant, is seeking a court order to force AIG to turn over notes and minutes of boar...

By Stephen Taub • June 21, 2006

Ex-CEO Pleads to Sarbox 302 Violation

Federal prosecutors have finally secured a guilty plea under Section 302 of Sarbanes-Oxley, which requires CEOs and CFOs to certify their company’s financial results, according to the Associated Press.The AP reported that Joseph Micatrotto, former chief executive officer of restaurant chain Buca ...

By Stephen Taub • June 21, 2006

House Subcommittee Hears 404 Laments

Section 404 of the Sarbanes-Oxley Act came under fire again on Monday, this time by panelists testifying in New York before the Regulatory Affairs subcommittee of the House Committee on Government Reform.“Seeing Mr. Lay and Mr. Skilling convicted has done more good [to deter fraud and protect inv...

By Marie Leone • June 19, 2006

Emerging Markets Raise Added Fraud Risk

Emerging markets may offer the greatest prospects for growth, but according to a new report, those markets also present the greatest risk of fraud.In a global fraud survey by Ernst & Young, 60 percent of respondents said they perceive a greater threat in their emerging market operations than ...

By Stephen Taub • June 19, 2006

Microsoft Mired in Global Crossing

A federal judge has reinstated Microsoft Corp. and SoftBank Corp. as defendants in a class-action lawsuit brought by investors in Global Crossing and its affiliate Asia Global Crossing, according to Reuters, citing court documents.Both companies invested with Global Crossing in Asia Global Crossi...

By Stephen Taub • June 16, 2006

The Cost of Being Public

What does it cost a company to be public? A new study estimates that companies with less than $1 billion in revenues spent $2.9 million in 2005 for the privilege of a listing, down 16 percent from the previous year, when the total added up to $3.4 million. Companies with more than $1 billion in r...

By Marie Leone • June 15, 2006

More GAAP-Tax Disclosure Recommended

Better disclosure of the reconciliation between a company’s tax figures and its financial statements was the subject of testimony on Tuesday before the Senate Finance Committee.Edward Kleinbard, an attorney with Cleary Gottlieb Steen & Hamilton, opposed mandating the public disclosure of corp...

By Helen Shaw • June 14, 2006

Did Enron Broadband Jurors Swap Votes?

Examine our Enron archiveLawyers for Kevin Howard, former vice president of finance for Enron Broadband Services, may have found an opportunity to overturn their client’s conviction.Last month, Howard was found guilty of five counts of fraud, conspiracy, and falsifying records; former senior dire...

By Stephen Taub • June 13, 2006

Williams to Pay $290 Million in Settlement

Energy company Williams agreed to pay $290 million to settle a class-action lawsuit filed by shareholders who bought stock between July 2000 and July 2002.The company will pay between $145 million and $220 million, while the balance will be funded by its insurers.The shareholder plaintiffs had al...

By Stephen Taub • June 13, 2006

Will XBRL Improve Analyst Coverage?

Monday’s Securities and Exchange Commission roundtable on interactive data provided further opportunity for Christopher Cox to support XBRL (eXtensible Business Reporting Language). This method of tagging financial data, said the SEC chairman in a speech last December, “will do for business repor...

By Marie Leone • June 13, 2006