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

Late ERISA Filers May Number 35,000

Nearly half of the companies required to file a health-benefits annual report with the federal government are out of compliance, according to a new study from insurance broker Corporate Synergies Group.Form 5500, as the report is better known, became a requirement under the Employee Retirement In...

By Marie Leone • June 12, 2006

Option Issues Raise SEC Eyebrows

Maxim Integrated Products is the latest company to be targeted by an informal Securities and Exchange Commission investigation of its prior stock-option grants. The manufacturer of analog and mixed-signal integrated circuits, which has a market capitalization of about $10 billion, stated that it ...

By Stephen Taub • June 8, 2006

Nigerian Barge Convicts Out on Appeal

Examine our Enron archiveThe U.S. Court of Appeals for the Fifth Circuit ordered the release from prison of two men involved in the infamous Nigerian barge case, reported The Wall Street Journal.Former Merrill Lynch investment bankers Daniel Bayly and Robert Furst are two of six individuals convi...

By Stephen Taub • June 8, 2006

High Court Limits Private Use of RICO

Two Supreme Court cases have limited the use of civil anti-racketeering laws by companies against their competitors, and by individuals against their employers.The Racketeer Influenced and Corrupt Organizations Act, or RICO, was enacted in 1970 to provide tough penalties when federal prosecutors ...

By Stephen Taub • June 6, 2006

Ex-CEO of Gateway Wins Dismissal

In a case that might have been argued differently if Sarbanes-Oxley came into play, a federal judge has dismissed Securities and Exchange Commission fraud charges against former Gateway chief executive officer Jeffrey Weitzen.In November 2003, the SEC had charged that for the third quarter of 200...

By David Katz • June 1, 2006

Enron Settles with Vinson & Elkins

Examine our Enron archiveEnron has reached a settlement with Vinson & Elkins, its former outside law firm, according to the Associated Press.Vinson & Elkins had been widely criticized for not blowing the whistle when it grew uneasy with some of Enron’s more controversial dealings, such as...

By Stephen Taub • June 1, 2006

Split Verdict in Enron Broadband Retrial

Examine our Enron archiveAn Enron trial that had been flying under the radar emerged today with guilty verdicts for one defendant, acquittal for the other.Kevin Howard, former vice president of finance for Enron Broadband Services, was convicted of five counts of fraud, conspiracy, and falsifying...

By Stephen Taub • May 31, 2006

Cox Hints at Retreat from Pay Disclosure

The Securities and Exchange Commission may be backing off from part of its proposal that would revamp disclosure of executive compensation, according to the Los Angeles Times.SEC chairman Christopher Cox told the newspaper that the commission’s final proposal may omit the requirement that compani...

By Stephen Taub • May 30, 2006

Lay, Skilling Guilty

Examine our Enron archiveFormer Enron Corp. chairman Kenneth Lay was convicted of all six charges against him and former Enron chief executive officer Jeffrey Skilling was found guilty of 19 counts, including conspiracy to commit securities fraud and wire fraud, the most serious of the 28 charges...

By Stephen Taub • May 25, 2006

Straight Talk on Financial Literacy

What do Green Day and Christopher Cox have in common? Both the raucous rock band and the Securities and Exchange Commission chairman see podcasting in their future.Cox, who testified Tuesday on financial literacy before the Senate Committee on Banking, Housing, and Urban Affairs, said that the co...

By Marie Leone • May 24, 2006

Fannie, Bond Lobbied on Investigation

Under scrutiny for questionable accounting practices beginning in 2004, mortgage giant Fannie Mae quietly tried to turn the tables on its federal watchdog by flexing its lobbying muscle and enlisting congressional allies to fire back at investigators, according to a report released Tuesday. In pa...

By Tory Newmyer • May 24, 2006

How to Bungle Political Risks

AES Corporation’s 1998 purchase of Telasi, the nation of Georgia’s electricity-distribution company, entailed the myriad of political risks that most international businesses deals do. But the venture resulted in one catastrophe that could not have been anticipated: the murder of AES-Telasi’s CFO...

By Helen Shaw • May 24, 2006

Judge: Insurer Must Pay Trade Center Janitor

You don’t have to be a property owner to get paid back for business losses covered by property-insurance policies, according to a recent court ruling in favor of the janitorial company that served the World Trade Center and its tenants.In his May 10 ruling in the U.S. District Court States Distri...

By David Katz • May 24, 2006

Lawyer Pleads in Milberg Probe

A West Coast lawyer has pleaded guilty to a felony tax charge for his role in the alleged kickback scheme involving law firm Milberg Weiss Bershad & Schulman, reported the Los Angeles Times.Richard Purtich, who is based in Century City, just outside Los Angeles, was reportedly accused by pros...

By Stephen Taub • May 23, 2006

Snow: SEC Should Decide on 404

Treasury Secretary John Snow has apparently aligned the Bush Administration behind the Securities and Exchange Commission and its chairman, Christopher Cox, in the ongoing debate over Section 404 of the Sarbanes-Oxley Act.Asked at the Bond Market Association’s annual meeting on Friday about effor...

By Ronald Fink and Tim Reason • May 19, 2006