Enron Witness: Partnerships Were Proper

Examine our Enron archive.The former head of Enron Corp.’s broadband unit has testified that one of the off-balance-sheet transactions created by former chief financial officer Andrew Fastow was proper, reports Bloomberg.In a second day of cross-examination, Mark Holscher, a lawyer for Jeffrey Sk...

By Stephen Taub • Feb. 16, 2006

Ex Broadband Exec Boosts Defense’s Case

Examine our Enron archive.The former head of Enron’s broadband business yesterday reportedly buttressed the defense’s case that special off-the-books partnerships received the seal of approval from the company’s board of directors as well as lawyers and accountants.Testifying under cross-examinat...

By Stephen Taub • Feb. 16, 2006

Re: Emails; Morgan Agrees to $15M Fine

Morgan Stanley disclosed that it has tentatively agreed to pay $15 million to settle charges by the Securities and Exchange Commission that the firm failed to retain e-mails.This is the largest fine the regulator has levied for failure to preserve records, reported The Wall Street Journal. The ne...

By Stephen Taub • Feb. 14, 2006

Broadband Exec: Skilling a Hands-on CEO

Examine our Enron archiveThe Enron prosecution’s second witness testified on Tuesday that former chief executive officer Jeffrey Skilling justified the use of off-balance-sheet entities to help boost earnings at the company’s broadband unit.Kenneth Rice, the former chief executive officer of Enro...

By Stephen Taub • Feb. 14, 2006

Investor Group Concerned about E-proxies

The Council of Institutional Investors has asked the Securities and Exchange Commission to proceed slowly with proposed rules that would allow companies to post their proxies on the Internet, reported the Financial Times.The group, which represents pension funds with assets totaling more than $3 ...

By Stephen Taub • Feb. 14, 2006

Sarbox Takes a Constitutional

By challenging the constitutionality of the Public Company Accounting Oversight Board, plaintiffs in a lawsuit filed last week believe that they can spur the courts and Congress to undo the entire Sarbanes-Oxley Act.While many federal laws have a “severability” provision that enables Congress to ...

By David Katz • Feb. 14, 2006

Enron Defense Points Finger at Fastow

Examine our Enron archiveFormer Enron Corp. chief financial officer Andrew Fastow played a major role — at least in name — during testimony Monday at the trial of former Enron executives Kenneth Lay and Jeffrey Skilling.Fastow came up during the fifth day of cross-examination of former investor-r...

By Stephen Taub • Feb. 13, 2006

Bally, Dissidents Drop Suits

Bally Total Fitness and its two dissident shareholders have made peace.Both groups have agreed to drop pending lawsuits, ending a battle that started last year and resulted in a proxy fight at last month’s annual meeting. Company officials also announced the election of three director nominees su...

By Stephen Taub • Feb. 10, 2006

“PIPEs” Plea for Deephaven

Officials at Deephaven Capital Management LLC, the asset-management subsidiary of Knight Capital Group Inc., have submitted a settlement offer to the Securities and Exchange Commission to resolve an investigation concerning trading activity associated with certain private investments in public eq...

By Stephen Taub • Feb. 10, 2006

AIG Agrees to $1.6 Billion Settlement

As widely expected, American International Group (AIG) has agreed to pay more than $1.6 billion to settle charges of fraud, bid-rigging, and improper accounting.The agreement was announced simultaneously by the New York State Attorney General, the New York Insurance Department, the Securities and...

By Stephen Taub • Feb. 9, 2006

Enron Government Witness Gets Mad

Examine our Enron archive.Bearing down on government witness Mark Koenig, the lawyers for Jeffrey Skilling and Kenneth Lay once again pressed their case that no crimes were committed at Enron.Dan Petrocelli, Skilling’s attorney, went so far as to ask the former head of investor relations whether ...

By Stephen Taub • Feb. 9, 2006

Second Mistrial Declared in Cendant Case

For the second time in 13 months, the proceedings against former Cendant Corp. chairman Walter Forbes ended in a mistrial after jurors could not come up with a unanimous verdict after 27 days of deliberations, reported Bloomberg. Forbes faces federal charges that he led the largest accounting fra...

By Stephen Taub • Feb. 9, 2006

CFOs Seek Sarbox Triage

Since its enactment in 2002, the Sarbanes-Oxley Act has been impressing observers with its sweep. From banning executive loans and auditor conflicts of interest, to setting up financial sign-offs by top executives, to governing audit committees and whistle-blowers, Sarbox cuts a wide swath throug...

By David Katz • Feb. 9, 2006

Property Insurance’s Uneven Price Blip

Ever since Hurricane Andrew struck Florida in 1992, Scott Clark, the risk and benefits officer of the Miami-Dade County Public Schools, has found it tough to buy enough property insurance to cover the system’s physical assets.After that storm, which caused the schools a $96 million loss, Clark st...

By David Katz • Feb. 9, 2006

What to Do When the Lights Go Out

The California brownouts of 2000, the August 2003 blackout in the Northeastern United States and central Canada, and Hurricane Katrina have shown how risky long-lasting electrical power interruptions can be.Prompted by such awareness — not to mention the heightened reporting pressures under Sarba...

By Helen Shaw • Feb. 9, 2006

Enron Defense Goes to the Videotape

Examine our Enron archiveIt was matinee day at the trial of former Enron Corp. executives Kenneth Lay and Jeffrey Skilling.Daniel Petrocelli, the lead attorney representing Skilling, devoted a big part of the day to playing audiotapes of analyst conference calls as well as a videotape of an emplo...

By Stephen Taub • Feb. 8, 2006

Conservative Group Challenges Sarbox

A free-market advocacy group has filed a lawsuit that challenges the legal authority of the Public Company Accounting Oversight Board to police the accounting profession.The Free Enterprise Fund asserted in a press release that the Sarbanes-Oxley Act of 2002 — the landmark legislation that create...

By Stephen Taub • Feb. 8, 2006

Striking a Balance on the Build-Out

Thanks to a resurgence in mergers and acquisitions, 2005 was a very good year for Lane, Berry & Co. So good, in fact, that the small, scrappy investment-banking firm now faces one of the biggest challenges since its founding four years ago. Lane, Berry is racing to expand by adding 30,000 squ...

By P.B. Gray • Feb. 8, 2006

Defense Keeps Pressure on Enron’s Koenig

Examine our Enron archiveOn Tuesday, at the trial of former Enron executives Kenneth Lay and Jeffrey Skilling, defense lawyer Daniel Petrocelli resumed his cross-examination of former head of investor relations Mark Koenig, according to the Houston Chronicle.Petrocelli, the lead attorney for Skil...

By Dave Cook and Stephen Taub • Feb. 7, 2006

Record High for Class-Action Settlements

Last year was a record-breaker for securities class-action settlements, according to Cornerstone Research, which found that companies paid $9.6 billion to shareholders.Even excluding the $6.1 billion agreement by WorldCom (as well as the $7.1 billion settlement by Enron that has yet to be finaliz...

By Stephen Taub • Feb. 7, 2006

Oil Companies, SEC Differ on Metrics

When an energy company measures its “inventory,” it’s more than a simple exercise in counting.Indeed, the Securities and Exchange Commission requires these businesses to abide by disclosure rules that some consider outdated and arbitrary — and, more significantly, that understate their reserves —...

By Stephen Taub • Feb. 7, 2006

Enron’s Koenig under Cross-examination

Examine our Enron archiveDaniel Petrocelli, the attorney for former Enron chief executive officer Jeffrey Skilling, on Monday began his cross-examination of Mark Koenig, the company’s onetime head of investor relations, by challenging Koenig’s credibility.“You’re still in a mode of trying to prot...

By Stephen Taub • Feb. 6, 2006

Former CFO Seeks Shorter Sentence

While the individuals involved in the Enron trial take a Friday respite (the court is in session from Monday through Thursday), other corporate cases continue. For example, former HealthSouth chief financial officer William Owens filed a request to get his five-year prison sentence cut in half.Ow...

By Stephen Taub • Feb. 3, 2006

Enron Settles with Lehman

Examine our Enron archive.Lehman Holdings has agreed to pay Enron Corp. $69.9 million to settle charges that the investment bank improperly received certain payments from Enron before the energy company went bankrupt, according to Reuters.Under the deal, Lehman agreed to permanently withdraw its ...

By Stephen Taub • Feb. 3, 2006

Keeping Compensation under the Covers

How far should a business go to protect its compensation information? For The Capital Group Cos., a holding company for asset-management firms including the American Funds, the distance extends all the way to divorce court.The Los Angeles–based firm recently sought and won an order to seal practi...

By Alix Stuart • Feb. 3, 2006