Accounting Experts Back Enron’s Numbers

Examine our Enron archiveAccounting experts testifying for the defense endorsed Enron Corp.’s financial statements, said the Associated Press. Jerry Arnold, an accounting professor at the University of Southern California, told jurors that third quarter 2001 financials that former Enron Chairman ...

By Stephen Taub • May 3, 2006

Lay Finishes Testimony

Examine our Enron archiveCalling the company’s collapse “the most painful thing in my life,” the former Enron Corp. chairman Kenneth Lay left the witness stand after a final testy exchange with federal prosecutor John Hueston, the Associated Press reported. Hueston reportedly scoffed at earlier s...

By Stephen Taub • May 2, 2006

Panels on 404 Skirt Small-Company Woes

The Securities and Exchange Commission and the Public Company Accounting Oversight Board have made it clear that their upcoming May 10 roundtable on financial internal controls reporting and auditing will have little to do with the experiences of small companies.That’s because the panelists at th...

By David Katz • May 2, 2006

Shareholder Settlements Leveling Off?

Shareholder class action settlements hit a new peak in 2005. Excluding the Enron and WorldCom settlements, the average settlement value was $24.3 million, surpassing the previous high of $23.7 million in 2002. Yet, settlements may be stabilizing and may fall in the next two years, according to a ...

By Helen Shaw • May 2, 2006

Prosecutors End Cross-Examination of Lay

Examine our Enron archiveProsecutors wrapped up their cross-examination of former Enron Corp. chairman Kenneth Lay after three days of testy, spirited exchanges.In his final salvo, prosecutor John Hueston accused Lay of engaging in insider trading, pointing out that in late November, just three h...

By Stephen Taub • May 1, 2006

HealthSouth May Collect from Ex-CFO

HealthSouth Corp. apparently aims to collect a $1.4 million judgment award from a former CFO who has been sentenced to five years in prison.The health care company won the award in March against one-time finance chief William Owens. HealthSouth filed the judgment with the Shelby County (Alabama) ...

By Stephen Taub • May 1, 2006

Former Patterson-UTI CFO Pleads Guilty

Jonathan Nelson, the one-time chief financial officer of oil and gas drilling company Patterson-UTI Energy Inc., pleaded guilty to defrauding his former company. Nelson’s plea agreement, reached last week, included one count of wire fraud and one count of engaging in monetary transactions derived...

By Marie Leone • May 1, 2006

Financial Firms Prep for Another 9/11

Responding to government pressure in the wake of 9/11, the Manhattan-based organizations that clear and settle the bulk of financial transactions now have data and operations centers far from their main sites, according to a report just issued by the Federal Reserve, the Comptroller of the Curren...

By David Katz • April 28, 2006

Lay’s Son Sold Enron Short

Examine our Enron archiveIn the ongoing Enron trial, former executives Kenneth Lay and Jeffrey Skilling have frequently asserted that short sellers deserve a lot of the blame for the energy giant’s demise. Indeed, Lay referred to them as “vultures” on Wednesday.So prosecutors created a stir Thurs...

By Stephen Taub • April 27, 2006

Aetna CFO, Chairman, to Retire

Aetna shareholders were spooked Thursday when its chief financial officer and chairman both announced their retirements, knocking down the insurer’s stock price by more than 21 percent.The company also announced higher-than-expected medical costs, which also seemingly contributed to the selloff.A...

By Stephen Taub • April 27, 2006

Prosecution Accuses Lay of Witness Tampering

Examine our Enron archiveProsecutor John Hueston immediately went on the attack Wednesday when his cross examination got underway, accusing former Enron chairman Kenneth Lay of tampering with witnesses, according to the Associated Press.Noting that Lay called several potential witnesses after the...

By Stephen Taub • April 27, 2006

Q&A: Harvey Pitt on 404

Perhaps the most controversial topic facing the Securities and Exchange Commission today is the issue of applying the Sarbanes-Oxley Act — and specifically Section 404 of the Act — to smaller companies. The debate has drawn sharp response from several former SEC Chairmen, including William Donald...

By Helen Shaw • April 27, 2006

Ace to Pay $80M in Settlement

Ace Ltd. has agreed to pay $80 million in restitution and penalties and reform its business practices as part of a settlement with New York, Connecticut, and Illinois to resolve charges of bid-rigging and improper finite-reinsurance transactions.“Ace has acknowledged its problems and cooperated f...

By Stephen Taub • April 26, 2006

Lay: No Recall of ”Dire Straits”

Examine our Enron archiveIn Tuesday afternoon testimony, Kenneth Lay disputed the assertion of Andrew Fastow that Lay was aware the company was in “dire straits” on August 15, 2001 — the day after Jeffrey Skilling left the company — according to the Houston Chronicle.In fact, Lay reportedly told ...

By Stephen Taub • April 25, 2006

I Would Have Challenged WSJ, Says Lay

Examine our Enron archiveOn his second day of testimony, Kenneth Lay told jurors that he wanted to respond to Wall Street Journal inquiries before the newspaper published what turned out to be a damaging story about Enron’s accounting practices, but his advisers talked him out of it.The former En...

By Stephen Taub • April 25, 2006

SEC Slow on the Uptake, Says GAO

The Securities and Exchange Commission has been slow to comply with recommendations by the Government Accountability Office regarding internal controls and accounting procedures, according to the congressional watchdog agency.The GAO reported that three material weaknesses in internal controls, w...

By Stephen Taub • April 25, 2006

Cox: “My Goal Is to Make 404 Work”

Securities and Exchange Commission Chairman Christopher Cox said today that section 404 of the Sarbanes-Oxley Act should be made to work for smaller companies without exempting them.Testifying before the Senate Banking Committee for the first time since he was confirmed as chairman of the SEC, Co...

By Tim Reason • April 25, 2006

Two Studies Give 404 Its Due

All protests aside, Section 404 seems to be working as planned.Only 2 percent of companies in their second year of compliance with Sarbanes-Oxley — and the Section 404 requirements on assessing and documenting internal controls over financial reporting — disclosed that their controls were ineffec...

By Stephen Taub • April 25, 2006

Lay Backs Skilling’s Story

Examine our Enron archiveTestifying in the afternoon of his first day on the witness stand, former Enron Chairman Kenneth Lay corroborated ex-CEO Jeffrey Skilling’s explanation for why Skilling left Enron Corp. in the summer of 2001.Lay said Skilling told him he was leaving for personal reasons, ...

By Stephen Taub • April 24, 2006

Lay: Fastow Was ”Basically Stealing”

Examine our Enron archiveFormer Enron Corp. Chairman Kenneth Lay, who took the stand today in his trial in Houston, denied he was part of a wide conspiracy to defraud, instead blaming his former chief financial officer, short sellers, negative newspaper articles, and a weak post-Sept. 11 stock ma...

By Stephen Taub • April 24, 2006

Small Biz 404 Report Heads to SEC

On Thursday, the Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies officially approved recommendations intended to ease the task of complying with key provisions of the Sarbanes-Oxley Act for thousands of small public companies. The recommendations will be submit...

By Stephen Taub and Tim Reason • April 21, 2006

Always Late

The number of companies that were late with their 2005 filings to the Securities and Exchange Commission fell 30 percent, to 203, from the year before, according to a recent report published by Glass, Lewis.The proxy-research firm also found that only 63 late filers cited incomplete internal-cont...

By Stephen Taub • April 21, 2006

Skilling Stands Down

Examine our Enron archive.Former Enron chief executive Jeffrey Skilling completed his testimony Thursday, setting the stage for his former boss, Kenneth Lay, to take the stand next week.Outside the courthouse, Skilling told reporters, “It’s been a tough six years; it’s been a really hard six year...

By Stephen Taub • April 21, 2006

Conspiracy Against 404 Exemptions?

A member of the Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies has accused former SEC chief accountant Lynn Turner of coordinating a media campaign opposing the committee’s proposals to scale down Section 404 of Sarbanes-Oxley for small companies.“We do know a...

By Helen Shaw • April 21, 2006

Sentencing Delayed for Former Qwest CFO

Former Qwest Communications International finance chief Robin Szeliga has won a slight reprieve.U.S. District Judge Walker Miller postponed her sentencing for insider trading until July 28, reported the Associated Press, but refused the government’s request to delay the matter until the end of th...

By Stephen Taub • April 20, 2006