The Spitzer Backlash

At least once a week, Pennsylvania Attorney General Tom Corbett gets an E-mail asking him to join his fellow attorneys general in signing letters to Congress, announcing joint positions — or, frequently, suing companies.He reads the invitations carefully — and also checks to see who has signed on...

By Tim Reason • March 15, 2006

Serenity Now!

You could see this one coming.On May 3, 2005, management at Cray Inc. notified the Securities and Exchange Commission that it had uncovered material deficiencies in eight of its internal controls over key financial systems. In the disclosure (an amendment to the company’s 10-K), Cray also indicat...

By Anne Stuart • March 15, 2006

Commanding Data

Ask Lee Dittmar to describe legislators and regulators’ newfound interest in data security, and he responds without missing a beat. “It’s a sleeping giant.”Dittmar is not some idle speculator, either. A principal at New York–based Deloitte Consulting, Dittmar has been advising on information tech...

By John Edwards • March 15, 2006

A Tough Act to Follow

Last November, a small group of Unica Corp.’s senior executives, lawyers, and auditors gathered over dinner in downtown Boston to celebrate the launch of the company’s initial public offering. Overall, they were pleased; the August IPO had raised more than $55 million in a tough market. But over ...

By David Katz • March 15, 2006

Enron Risk Manager Recalls LJM Warning

Examine our Enron archiveA former executive who had questioned the LJM partnerships took the stand Tuesday at the trial of Kenneth Lay and Jeffrey Skilling.Vince Kaminski, who was in charge of Enron’s risk management team, testified that when he learned about the proposal to create LJM in June 19...

By Stephen Taub • March 14, 2006

Pay-disclosure Policies Slow to Change

Only 48 percent of companies intend to change their compensation disclosure this year, and only 9 percent plan changes in the compensation program itself, according to a survey by Watson Wyatt Worldwide.The consultancy polled 112 large-company compensation and human-resources executives last mont...

By Stephen Taub • March 14, 2006

Defense Finishes Fastow Cross-Exam

Examine our Enron archiveThe defense wrapped up its cross-examination of Andrew Fastow on Monday at the trial of Kenneth Lay and Jeffrey Skilling.Lay’s lead attorney, Mike Ramsey, picked up where Skilling attorney Daniel Petrocelli left off last week — attacking Fastow’s honesty and integrity.“Yo...

By Stephen Taub • March 13, 2006

Bird Flu: Profitable or Problematic?

At a business luncheon in Boston earlier this year, Dell Inc. chief executive officer Kevin Rollins ruffled a few feathers when he commented that a bird flu epidemic might actually stimulate profits for the computer maker. He observed that during the 2003 SARS (Severe Acute Respiratory Syndrome) ...

By John Edwards • March 13, 2006

Freddie Mac Delays Reports by Two Months

Officials at Freddie Mac announced that the company would delay filing its 2005 financials by two months, until May. However, in a press release, the second-largest U.S. mortgage-funding company said it needed the extra time to implement a significant improvement in its method for determining the...

By Stephen Taub • March 10, 2006

Fastow: No Proof Linking CEO to Fraud

Examine our Enron archiveIn his third day on the witness stand, former Enron Corp. Chief Financial Officer Andrew Fastow once again spent a fair amount of time telling jurors how former chief executive Jeffrey Skilling was aware of sham deals with off-balance-sheet partnerships designed to boost ...

By Stephen Taub • March 9, 2006

Fastow: Lay Misled Investors, Employees

Examine our Enron archiveAndrew Fastow pointed the finger at Enron Corp.’s former chairman — and began what are expected to be many days of brutal cross-examination by defense attorneys — as the trial of Kenneth Lay and Jeffrey Skilling played to an overflow crowd on Wednesday.Even HealthSouth Co...

By Stephen Taub • March 8, 2006

Under Patriot Act, Feds Could Bug Boards

When President Bush signs the Patriot Act amendments into law later this week, the civil liberties of people targeted in terrorism investigations will be strengthened. That’s not the case, however, for corporate executives and directors under investigation for antitrust crimes. For them, the amen...

By Marie Leone • March 8, 2006

Fastow Tells How He Sweetened Earnings

Examine our Enron archiveFormer Enron Corp. chief financial officer Andrew Fastow finally took the witness stand at the trial of Kenneth Lay and Jeffrey Skilling.Under direct examination by prosecutor John Hueston, Fastow testified that Skilling approved the use of two off-balance-sheet partnersh...

By Dave Cook • March 7, 2006

Daimler Discloses Improper Payments

DaimlerChrysler AG disclosed that it has dismissed or suspended several employees after the company determined that “improper payments” were made in a number of jurisdictions, primarily in Africa, Asia, and Eastern Europe, according to published accounts.In a regulatory filing, the automaker stat...

By Stephen Taub • March 7, 2006

The Sweet Smell of Success

Here’s a public relations challenge: You want your company to list on the prestigious London Stock Exchange, as a blue chip stock in the FTSE 100 index, no less. But your tax haven-based company is in the online gambling business; your founders, a Californian husband-and-wife team, made their rep...

By Tony McAuley • March 7, 2006

Fastow on Deck at Enron Trial

Examine our Enron archiveDefense attorneys continued their efforts to undermine the credibility of prosecution witnesses as the trial of Kenneth Lay and Jeffrey Skilling resumed on Monday. Andrew Fastow made a brief appearance in the courthouse, although the former finance chief and his attorney,...

By Stephen Taub • March 6, 2006

Alleged Skilling Quote Shocks Courtroom

Examine our Enron archiveIn what could wind up being the turning point in the trial of former Enron chiefs Ken Lay and Jeff Skilling, a former top executive stunned the courtroom during the last ten minutes of testimony on Thursday when he testified that Skilling told other top executives ”they’r...

By Stephen Taub • March 3, 2006

Chipmaker Charged with Price-Fixing

Four executives of a South Korean supplier of memory chips agreed to plead guilty to price fixing and serve prison time in the United States, according to published reports, citing federal prosecutors.The settlement with the executives of Hynix Semiconductor, the second-largest maker of computer ...

By Stephen Taub • March 2, 2006

High Court Seen Easing up on Antitrust

A Supreme Court ruling issued on Wednesday could hurt small companies as well as further erode some of the 60-year old anti-trust rules, experts say. The case involves the Trident unit of Illinois Tool Works. Although the unit has a patent for printheads—the part of a printer that spreads ink ont...

By Stephen Taub • March 2, 2006

At Enron, a Lie Is a Lie Is a Lie

Examine our Enron archiveWednesday was cross-examination day at the trial of Kenneth Lay and Jeffrey Skilling.In the morning session, Lay attorney Mike Ramsey spent his efforts on the plea deal of Timothy Belden, the former chief trader for Enron Corp. division Enron North America. “You’ve made a...

By Stephen Taub • March 1, 2006

SEC Plan Could Blur Compensation Reports

To the confusion of shareholders, strange rises and dips in the reported compensation of companies’ highest-paid executives could be among the results of the new Securities and Exchange Commission pay-disclosure proposals.In other words, say corporate compensation advisers, an executive could app...

By Helen Shaw • March 1, 2006

SOP at Enron: ”Fast and Loose”

Examine our Enron archiveThree former executives of Enron Corp. division Enron North America — chief accounting officer Wanda Curry, chief trader Timothy Belden, and CEO David Delainey — took the witness stand Tuesday at the trial of Kenneth Lay and Jeffrey Skilling.Curry concluded her testimony ...

By Dave Cook and Stephen Taub • Feb. 28, 2006

SEC Seeks Wider Role in ”Sweep” Exams

Paul Atkins expects that he and his fellow SEC commissioners will be getting more involved in “sweep examinations” that are conducted by the Office of Compliance Inspections and Examinations (OCIE), according to Reuters.Atkins, who made the remarks during a speech to investment advisers, noted th...

By Stephen Taub • Feb. 28, 2006

Securities Firms Bemoan Compliance Costs

Compliance costs on Wall Street have nearly doubled in the past three years, to more than $25 billion in 2005 from $13 billion in 2002, according to a study by the Securities Industry Association.This increase is equivalent to nearly 5 percent of the industry’s average annual revenues, according ...

By Stephen Taub • Feb. 28, 2006

Software Squeeze: Patently Wrong?

Is a computer program an invention or an idea? The difference may sound subtle, but for top software publishers it is literally a billion-dollar question. Inventions may be patented, which gives the patent holder legal rights to the core concept of an innovation, while ideas are entitled only to ...

By John Edwards • Feb. 28, 2006