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

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

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

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

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

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

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

”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

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

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

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

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

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

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

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

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

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

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

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