Small-business 404 Waiver Unlikely: Cox

Christopher Cox, chairman of the Securities and Exchange Commission, said Monday that small companies should not necessarily expect an exemption from the internal-controls provisions of Sarbanes-Oxley, according to Bloomberg.Speaking to reporters in Washington, D.C. following his presentation to ...

By Stephen Taub • April 4, 2006

Enron Defense Steps Up to the Plate

Examine our Enron archiveAfter a long weekend recess, defense attorneys got things started slowly on Monday as they began their case on behalf of Kenneth Lay and Jeffrey Skilling.They began without Lay’s lead attorney, Mike Ramsey, who was absent following outpatient treatment for a stent that ha...

By Stephen Taub • April 3, 2006

Enron Sets Portland General Free

Examine our Enron archiveThey’re celebrating in Portland. As part of a regular financial distribution to its creditors, Enron today handed out some 27 million shares of Portland General Electric. In doing so, the fallen energy trading giant relinquished control of PGE, making the utility a stand-...

By Stephen Taub and Tim Reason • April 3, 2006

Coming Clean about Bribery

Spurred by the Sarbanes-Oxley Act and the increasing likelihood of being caught bribing foreign officials, managers at increasing numbers of U.S. companies are voluntarily disclosing breaches of the Foreign Corrupt Practices Act, a Department of Justice official says.Since the beginning of March...

By Marie Leone • April 3, 2006

Thinking Inside the Sarbox

There’s little doubt that software vendors see plenty of opportunity in offering products that ease the pain of Sarbanes-Oxley requirements — or that claim to, anyway. A recent Internet search on “Sarbanes-Oxley software” garnered almost 80,000 hits, while a search on the broader “compliance soft...

By Esther Shein • April 1, 2006

Coming Distractions

Like most CFOs, Paul Reilly is not prone to exaggeration. The finance chief at Melville, New York–based Arrow Electronics Inc., Reilly is by nature a pragmatist — a level-headed, by-the-numbers pragmatist. So when he tells you flat out that, “It’s a growing problem; people are not focused on it,”...

By John Goff • April 1, 2006

Social vs. Fiduciary: The Responsibility Debate

An activist shareholder claims executives at Goldman Sachs and General Electric Co. are shirking their fiduciary responsibilities to shareholders by appeasing environmental activists. Free Enterprise Action Fund (FEAF), a year-old mutual fund with $5.7-million under management, submitted sharehol...

By Marie Leone • March 29, 2006

Enron Prosecution Rests

Examine our Enron archiveProsecutors rested their case in the ninth week of the trial of former Enron Corp. executives Kenneth Lay and Jeffrey Skilling.“By authority granted to me, I declare spring break,” Judge Sim Lake told the jury, according to the Houston Chronicle.The defense will begin its...

By Stephen Taub • March 28, 2006

Enron Sideshow: Two Settle Fraud Charges

Examine our Enron archiveTwo former Enron Corp. employees, accountant David T. Leboe and attorney Dale G. Rasmussen, have agreed to settle Securities and Exchange Commission allegations that they manipulated earnings.The charges were filed in federal court in Houston, where prosecutors are windin...

By Stephen Taub • March 28, 2006

Zurich Settles with Spitzer

Zurich Financial Services agreed to pay $153 million and adopt a series of sweeping reforms to settle charges of bid-rigging and improper “finite reinsurance” transactions brought by New York, Connecticut, and Illinois, according to a joint announcement by New York State Attorney General Eliot Sp...

By Stephen Taub • March 28, 2006

Glisan: Enron Had Sufficient Cash

Examine our Enron archiveDuring continued cross-examination on Monday, defense attorneys threw doubt on the testimony of former Enron Corp. treasurer Ben Glisan, who last week said he warned Kenneth Lay about the company’s failing financial health.During questioning by Lay attorney Bruce Collins,...

By Stephen Taub • March 27, 2006

No End to Finite-risk Troubles

Max Re Capital Ltd. disclosed that its audit and risk management committee has launched a review of the company’s accounting for three finite-risk retrocessional contracts written in 2001 and 2003.The Bermuda-based reinsurer stated that as a result of the investigation, it may need to restate its...

By Stephen Taub • March 27, 2006

Deferring that Day in Court

Last August, when KPMG entered into a deferred prosecution agreement with the Justice Department, representatives of both parties might well have had the specter of Arthur Andersen on their minds.For their part, prosecutors were wary of pursuing a full conviction of the firm for selling fraudulen...

By Helen Shaw • March 24, 2006

Glisan: No Notes from Skilling Meetings

Examine our Enron archiveUnder a sometimes biting cross-examination by defense attorneys Thursday, Enron treasurer Ben Glisan defended his contention that Enron executives Kenneth Lay and Jeffrey Skilling knew about and approved Enron fraudulent reporting schemes, according to trial coverage by t...

By Tim Reason • March 23, 2006

Glisan: Lay Giggled “in Delight” over Raptors

Examine our Enron archiveDuring all-day testimony Wednesday, former Enron treasurer Ben Glisan backed earlier statements by former CFO Andrew Fastow that ex-CEO Kenneth Lay misled employees about losses on international assets. He also suggested that Lay was intimately involved in efforts to conc...

By Tim Reason • March 22, 2006

Legal Briefs: Fruit of the Loom Settles

Another scandal from the 1990s has finally been resolved.Two class-action settlements totaling $42 million against Fruit of the Loom Inc. have been approved by a federal judge, according to the Associated Press.The lawsuits had been filed in 1998 and 2000 in U.S. District Court in Bowling Green, ...

By Stephen Taub • March 22, 2006

Enron’s Funky Financing

Examine our Enron archiveJurors in the Enron trial were treated to an inside look at the souring relationship between the energy trading company and credit analysts on Tuesday, when Standard & Poor’s analyst Ron Barone took the stand.Barone described his astonishment when he learned in Octobe...

By Tim Reason and Stephen Taub • March 21, 2006

”Goodwill Games” at Enron?

Examine our Enron archiveJurors at the trial of Kenneth Lay and Jeffrey Skilling finally heard from witnesses who served at Arthur Andersen, the former Big Five accounting firm that Enron took down with it.John Sult, who oversaw Andersen’s audit of Wessex Water, testified that Lay misled investor...

By Stephen Taub • March 20, 2006

Compliance Costs ”Easing,” Says Survey

The costs of complying with the Sarbanes-Oxley Act “appear to be easing,” according to the Business Roundtable. The association of large-company CEOs, which received survey responses from 105 of its members, observed that only 6 percent expect compliance costs to rise in 2006; 42 percent believe ...

By Stephen Taub • March 20, 2006

In China, You Better Watch Out

Think it’s easy to stay out of jail? John MacLellan doesn’t. He is the regional finance director of Microsoft for Asia, and responsible for ensuring watertight compliance with the U.S. Foreign Corrupt Practices Act (FCPA) in China, a law that exacts strict penalties for giving or taking bribes in...

By Tom Leander • March 20, 2006

The Last Quarter of the Guidance Game

The recent news that Pfizer is considering walking away from issuing quarterly earnings guidance is only the latest evidence of what may become a sizable exodus. Indeed, the trend of abandoning frequent guidance has been gaining momentum. Just this year, Motorola, Citigroup, and Idexx Laboratorie...

By Helen Shaw • March 17, 2006

A Small Uproar over 404

For at least two years, CFOs have been complaining about the costs and labors of complying with Section 404 of the Sarbanes-Oxley Act. To date, however, only two have voiced their concerns in the form public comments related to the upcoming Securities and Exchange Commission roundtable on Sarbox...

By Marie Leone • March 17, 2006

What’s in Your Wallet?

In the next few months, the Securities and Exchange Commission will finalize new rules about what companies must reveal about executive pay. If the SEC hews to its January proposal, companies will have to add both more numbers and prose to their proxies starting in 2007. CFOs will have no secrets...

By Alix Stuart • March 17, 2006

The End of Guidance?

Pfizer Inc. may soon stop issuing quarterly earnings per share guidance, a move that would make the pharmaceutical giant part of a growing trend. Companies such as General Motors and Google are mum on earnings and many companies have decided to limit the guidance they issue.According to a recent...

By Helen Shaw • March 16, 2006

Watkins: Lay Lied

Examine our Enron archiveCelebrated Enron Corp. whistleblower Sherron Watkins didn’t disappoint onlookers when she took the stand in the trial of former Enron executives Kenneth Lay and Jeffrey Skilling, dropping bombshell after bombshell.It was Watkins who wrote the now-famous memo to Lay on Aug...

By Stephen Taub • March 15, 2006