SEC Commissioner Glassman to Step Down

Securities and Exchange Commissioner Cynthia Glassman announced that she plans to leave the SEC after her current five-year term ends on June 5. But Glassman, who joined the commission in January 20, did not set a specific date for her departure.SEC officials pointed out that commissioners typica...

By Stephen Taub • May 15, 2006

Morgan Stanley E-mail Penalty: $15 Million

Morgan Stanley agreed Wednesday to pay $15 million to settle civil charges by the Securities and Exchange Commission that it failed to produce tens of thousands of E-mails dating back to December 2000.The commission had sought the documents in connection with its investigations into initial publi...

By Stephen Taub • May 11, 2006

Credit Suisse Settles Enron ‘MegaClaim’

Credit Suisse Securities is the latest company to settle “MegaClaim” litigation stemming from the Enron bankruptcy.Under the settlement, the former Credit Suisse First Boston agreed to pay Enron $90 million and forgo about $337 million in claims against the Enron estate. The agreement must still ...

By Stephen Taub • May 11, 2006

Union Lawyer, Midcap CFO Clash on 404

See our special report on “The 404 Debate.”The May 10 roundtable on second-year experiences with Sarbox 404 compliance ended with a bang, as a representative of organized labor clashed with a CFO arguing the case for small companies. The issue: whether the internal-controls requirements should be...

By David Katz • May 10, 2006

Revise 404 for the Market, Panelists Say

See our special report on “The 404 Debate.”While Section 404 of the Sarbanes-Oxley Act has helped boost investor confidence in the U.S. capital markets, there could be improvements in disclosure and in the internal-controls assessment and reporting regime, panelists stated during the fourth panel...

By Helen Shaw • May 10, 2006

More 404 Guidance, Please

See our special report on “The 404 Debate.”Speakers at the first panel of the Securities and Exchange Commission/Public Company Accounting Oversight Board roundtable on Section 404 requested management-specific guidance for the internal-controls assessment process and raised the hope that such gu...

By Helen Shaw • May 10, 2006

Cry of Pain from Small Companies

See our special report on “The 404 Debate.”Noting that he was “the only officer of a small public company on any of the panels,” Dr. Stephen Sherwin, CEO of Cell Genesys, launched a soft-spoken but biting complaint about the impact of Section 404 of the Sarbanes-Oxley Act.Speaking during the seco...

By Tim Reason • May 10, 2006

Material Weakness at the Roundtable

See our special report on “The 404 Debate.”Regulators were asked to go back to the drawing board by panelists speaking out about second-year experiences related to Section 404 of the Sarbanes-Oxley Act. Many panelists — including corporate-governance gurus Barbara Hackman Franklin and Mary K. Bus...

By Marie Leone • May 10, 2006

SEC Contemplates Auditorless World

See our special report on “The 404 Debate.”What if there weren’t any auditors?The question, asked by Scott Taub, the acting chief accountant of the Securities and Exchange Commission, might have been purely hypothetical. But participants at a May 10 panel on management’s role in assessing and eva...

By David Katz • May 10, 2006

Section 404, Year Three: Ready for IT?

See our special report on “The 404 Debate.”At CBS, managers are satisfied with the media giant’s progress in developing and refining business processes to comply with Section 404 of the Sarbanes-Oxley Act. But before the information-technology systems used in the controls process attain a similar...

By Marie Leone • May 10, 2006

Panel: Don’t Audit Low-level Risks

See our special report on “The 404 Debate.”“Don’t sweat the low-risk accounts” was the message from companies to regulators during a roundtable on the second-year experiences of Section 404 implementation. Panel participants said they would like to see more qualitative factors considered during 4...

By Marie Leone • May 10, 2006

404 Makes an IPO: Mission Impossible

As a backdrop for Tom Cruise in Mission: Impossible III, satellite images of “enemy surveillance” and “global reconnaissance” are scattered about a dimly-lit, futuristic control room. The set may be a Hollywood fantasy, but the software generating the clandestine images is real, and supplied by d...

By Marie Leone • May 9, 2006

Gemstar Ex-CEO Ordered to Pay $22 Million

A federal judge has ordered Henry Yuen, former chief executive officer of Gemstar-TV Guide International, to pay $22 million to settle civil charges stemming from his role in the company’s accounting scandal, according to published reports.The sum includes penalties, interest and a return of ill-...

By Stephen Taub • May 9, 2006

Ex-CFO of HealthSouth Faces Resentencing

A federal appeals court ruling may send Malcolm McVay to prison after all, according to the Daily Business Review, a South Florida-based legal and business newspaper.McVay — one of five former chief financial officers charged in connection with the $2.7 billion accounting scandal at HealthSouth ...

By Stephen Taub • May 8, 2006

Enron Defense Rests

Examine our Enron archive“I’m sure on January 31, you thought this day would not arrive,” Judge Sim Lake told jurors Monday at the trial of Kenneth Lay and Jeffrey Skilling, reported the Houston Chronicle.The 53-day trial has been adjourned until May 15, when closing arguments are scheduled to be...

By Stephen Taub • May 8, 2006

Flirting with Disaster Recovery

Mention business continuity to CFOs and see how long it takes them to change the subject. Yes, it’s a risk issue, and they’ll readily agree it demands attention. Just not theirs. Typically, business continuity, which includes contingencies for business interruptions ranging from telecom outages t...

By Elaine Appleton Grant • May 8, 2006

Spitzer Sues Liberty Mutual

New York State Attorney General Eliot Spitzer announced Friday that he is suing another insurer for participating in what he describes as a widespread bid-rigging scheme.On Friday he filed a civil complaint against Liberty Mutual, alleging the property-casualty insurer made payoffs to insurance b...

By Stephen Taub • May 5, 2006

CFO, Chairman Leave amid Options Probe

Power Integrations Inc. came out with two big announcements on Friday: the resignation of its CFO and chairman, and initial findings from an internal investigation that cited discrepancies between actual and recorded stock-option grant dates.CFO John Cobb and chairman Howard Earhart resigned from...

By Stephen Taub • May 5, 2006

Shareholders Abandon Qwest Settlement

The life may be draining out of the Qwest Communications class-action settlement. According to company regulatory filings, many shareholders have backed out of the proposed $400 million settlement, which could mean Qwest is on the hook for a lot more money than it anticipated when it agreed to se...

By Stephen Taub • May 5, 2006

House Committee Chair Wants 404 Reform

The Chairman of the House Committee on Small Business is calling on the Securities and Exchange Commission to exempt small public companies from the Sarbox 404 reporting because the cost of compliance with the provision’s rules outweighs the benefits.At a hearing on Wednesday, Committee Chairman ...

By Marie Leone • May 5, 2006

Accounting Expert Endorses Enron Moves

Examine our Enron archiveAn accounting expert in the Enron trial defended the company’s decision to shift part of one business unit to another, which the prosecution claims was done to hide losses, according to the Associated Press.Testifying for a second day, Walter Rush, a consultant and former...

By Stephen Taub • May 4, 2006

Shareholder Suits Drop to Nine-year Low

Are shareholders becoming less litigious? That may be one explanation for the recent drop in the number of lawsuits filed. According to a new report from PricewaterhouseCoopers, for example, the number of private securities cases filed in the United States plunged to its lowest level in nine yea...

By Stephen Taub • May 4, 2006

The Official 404 Roundtable Agenda

9:00 a.m. Opening Remarks Chairman Christopher Cox, U.S. Securities and Exchange Commission (SEC) Acting Chairman Bill Gradison, Public Company Accounting Oversight Board (PCAOB)9:15 a.m. Introduction and Panel One — Overview of the Second Year Lead Moderator: John W...

By Securities and Exchange Commission • May 4, 2006

SEC Chief Accountant Defends 404

The Securities and Exchange Commission’s acting chief accountant, Scott Taub, defended the SEC’s implementation of Sarbanes-Oxley 404 today, suggesting soaring costs were due to overly detailed controls testing. Taub also threw more cold water on industry hopes that 404 might be modified for smal...

By Ronald Fink • May 4, 2006

The Second Time Around

The Securities and Exchange Commission and the Public Company Accounting Oversight Board have set the stage for another donnybrook between corporate executives and their independent auditors on matters concerning internal controls over financial reporting. The agenda for the regulators’ May 10 ro...

By David Katz • May 4, 2006