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

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