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

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

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

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

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

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

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