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

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

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

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

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

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

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

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

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: 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

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

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

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

HIPAA e-Rule Surprises Small Businesses

U.S. law has protected the privacy of employee health data since 1996. But until last year, the appearance of that data on company computer screens was mostly protected by rules of thumb, like so-called “cleaning woman” and “shoulder surfing” policies. In both cases, company policies generally en...

By Marie Leone • April 20, 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

Skilling Defends $200 Million Asset Move

Examine our Enron archiveJeffrey Skilling challenged assertions by the prosecution that he transferred the trading portion of Enron’s retail division in the first quarter of 2001 to hide $200 million in losses, according to the Associated Press.On a third day of cross-examination by prosecutor Se...

By Stephen Taub • April 19, 2006

Prosecution Wraps Up Skilling Cross-exam

Examine our Enron archiveOn Wednesday, former Enron chief executive officer Jeffrey Skilling made it through a third day of questioning by prosecutor Sean Berkowitz, then was handed over to defense attorney Daniel Petrocelli for re-direct.Skilling, on trial with former chairman Kenneth Lay, is ex...

By Stephen Taub • April 19, 2006

Prosecutor, Skilling Spar over Earnings

Examine our Enron archiveTense exchanges between prosecutor Sean Berkowitz and former Enron CEO Jeffrey Skilling grew testier on Tuesday during cross-examination on the company’s quarterly earnings. The period in question was the second quarter of 2000. The issue: whether Skilling directed Enron ...

By Stephen Taub • April 18, 2006

Skilling Feels Pressure on Cross-exam

Examine our Enron archiveThe prosecution continues to pressure former Enron chief executive officer Jeffrey Skilling about the partnership deals known as the Raptors, and on Tuesday, the pressure began to show.On Skilling’s second day of cross-examination, prosecutor Sean Berkowitz accused him of...

By Stephen Taub • April 18, 2006

Government Puts No Stock in Skilling Story

Examine our Enron archiveProsecutor Sean Berkowitz began his cross-examination of Jeffrey Skilling on Monday by asserting that the former Enron CEO and his co-defendant, Kenneth Lay, were the “captains of the ship” and that Skilling has his “hand firmly on the wheel,” reported the Houston Chronic...

By Stephen Taub • April 17, 2006

What Enron Analysts Knew, and When

Examine our Enron archiveProsecutor Sean Berkowitz and former Enron CEO Jeffrey Skilling were at odds Monday afternoon over what analysts knew about the company’s financial health, and when they knew it.During the first afternoon of cross-examination, Berkowitz scoffed at Skilling’s assertion tha...

By Stephen Taub • April 17, 2006

Skilling Rails against Government’s Case

Examine our Enron archiveFormer Enron Corp. chief executive officer Jeffrey Skilling railed against prosecutors for “re-writing history” by twisting the facts surrounding the former energy giant’s collapse, according to several published reports.As his attorney Daniel Petrocelli continued going d...

By Stephen Taub • April 13, 2006