Small Companies May Be Excused from 404

The Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies has recommended to the full SEC that smaller businesses no longer be required to comply with the Section 404 provisions of Sarbanes-Oxley.The advisory committee voted 18 to 1 that most companies with a market ...

By Stephen Taub • Dec. 15, 2005

Cox Promises Policy on Large Fines

Securities and Exchange Commission chairman Christopher Cox has said that the regulator will soon set a firm policy on levying large monetary fines, according to Reuters.“We’ve been spending a great deal of time on it,” Cox told reporters after an SEC meeting in Washington, D.C. “It’s helped all ...

By Stephen Taub and Tim Reason • Dec. 14, 2005

404 Costs to Drop, Big Four Maintain

The cost of Section 404 of Sarbanes-Oxley, which governs internal controls over financial reporting, will drop “substantially” in a company’s second year of implementation, concludes a study by consultancy CRA International (formerly Charles River Associates) and commissioned by the Big Four acco...

By Stephen Taub • Dec. 9, 2005

SEC to Revisit ‘One Size Fits All’

The Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies is expected to make preliminary recommendations for its final report when it meets next Wednesday.According to an agenda published on the SEC website, the committee will vote on recommendations regarding four ...

By Stephen Taub • Dec. 8, 2005

SEC Enforcement Aims High

The target of a Securities and Exchange Commission enforcement action is increasingly likely to be a large company, according to Reuters, citing SEC data.In fiscal 2005, 24 percent of SEC financial reporting actions involved Fortune 500 companies, their executives, or those they do business with,...

By Stephen Taub • Dec. 8, 2005

Winds of Change

Many large corporations in the states of Louisiana, Mississippi, Florida, and Texas had prepared for the devastating hurricane season of 2005, assuring the continual flow of business through well-oiled disaster-recovery plans. But it’s the season’s aftermath that could take them by surprise: subs...

By Russ Banham • Dec. 8, 2005

Former Hollinger CFO Pleads Not Guilty

Former Hollinger International Inc. chief financial officer John Boultbee has pleaded not guilty to fraud charges, according to published reports.Judge Amy St. Eve of the U.S. District Court in Chicago ordered Boultbee, who lives in Vancouver, to post a $1.5 million cash bond and to restrict his ...

By Stephen Taub • Dec. 7, 2005

American Corporate Reputations Fall

The overall reputation of U.S. companies fell in 2005, according to a new survey conducted jointly by Harris Interactive and the New York-based Reputation Institute and reported by The Wall Street Journal.This year, 20,000 U.S. adults evaluated companies they were familiar with on 20 attributes t...

By Stephen Taub • Dec. 6, 2005

Fine Time at the SEC

Records were made to be broken. But when the Securities and Exchange Commission levied an unheard-of $10 million fine against Xerox in April 2002, few could have imagined the amounts that other companies would soon be shelling out. Less than four years later, the record fine — now held by WorldCo...

By Tim Reason • Dec. 1, 2005

Judge Drops Two Charges Against Scrushy

An Alabama judge has dismissed two civil fraud charges brought by the Securities and Exchange Commission against Richard Scrushy, the founder, former chairman, and former chief executive officer of HealthSouth Corp.In June, of course, Scrushy was found not guilty of criminal charges related to th...

By Stephen Taub • Dec. 1, 2005

Friedman’s Will Pay $2 Million in Settlement

Jewelry retailer Friedman’s Inc. has agreed to pay $2 million to the consumer-fraud fund of the United States Postal Inspection Service as part of a settlement of securities fraud charges, according to the Securities and Exchange Commission.In U.S. District Court for the Eastern District of New Y...

By Stephen Taub • Dec. 1, 2005

Former Gemstar CFO Reaches Plea Deal

A former chief financial officer of Gemstar-TV Guide International Inc. has agreed to settle charges stemming from the company’s accounting scandal, according to the Associated Press.The terms of the deal made with Elsie Leung, reportedly announced during a court hearing yesterday, were not discl...

By Stephen Taub • Nov. 30, 2005

SEC Votes to Allow Electronic Proxies

In a move expected to save U.S. corporations about $500 million or more a year in printing and postage costs, the Securities and Exchange Commission voted to allow companies to provide proxies to shareholders via the Internet, according to the Associated Press.Supported by all five commissioners,...

By Stephen Taub • Nov. 29, 2005

GAO Criticizes SEC Internal Controls

The Government Accountability Office has asserted that the Securities and Exchange Commission did not maintain effective internal control over financial reporting as of the end of its September 2005 fiscal year.The congressional watchdog agency cited continued material internal-control weaknesses...

By Stephen Taub • Nov. 23, 2005

California Sues Sempra Energy

California Attorney General Bill Lockyer has filed a lawsuit against Sempra Energy Trading, alleging that the company committed a large-scale fraud during the so-called energy crisis of 2000 and 2001 by manipulating wholesale electricity prices “through widespread playing of Enron games.”“Sempra ...

By Stephen Taub • Nov. 18, 2005

Feds Charge Former CFO Accused of Embezzlement

Jonathan Nelson, the former chief financial officer of oil driller Patterson-UTI Energy Inc., was charged by federal prosecutors with violating U.S. securities laws by signing off on financial reports that he knew were false, according to Bloomberg. The false financial reports, say prosecutors, w...

By Stephen Taub • Nov. 18, 2005

Former Hollinger CFO Indicted with Black

Former Hollinger International chief financial officer John Boultbee, former chairman and chief executive officer Conrad Black, and two other executives have been indicted for stealing $51.8 million from the company. They were accused of wire fraud and mail fraud in an 11-count expanded indictmen...

By Stephen Taub • Nov. 18, 2005

Monrad Officially Leaves TIAA-CREF

Elizabeth Monrad has resigned as executive vice president and chief financial officer of TIAA-CREF, the New York City–based retirement fund and financial services organization.She had not been performing her day-to-day duties since May 10, when she took a leave of absence after receiving a Wells ...

By Stephen Taub • Nov. 17, 2005

Judge Freezes Assets of Former CFO

A federal judge froze the assets of the former chief financial officer of Patterson-UTI Energy Inc. after the Securities and Exchange Commission accused him of embezzling more than $69 million from the company over a five-year period, according to the regulator.The SEC said the former CFO, Jonath...

By Stephen Taub • Nov. 17, 2005

Hedge Fund Pressures McDonald’s

McDonald’s is the most recent target of outside investor attempts to shake up management.William Ackman, managing partner at Pershing Square Capital Management, has called for the fast-food giant to spin off 65 percent of its 8,000 company-owned restaurants and borrow $14.7 billion against its re...

By Stephen Taub • Nov. 15, 2005

Sovereign Bancorp Fires Back at Investor

Sovereign Bancorp is mad as hell and is not going to take it anymore.Officials at the Philadelphia-based financial institution are pushing back at an institutional investor, saying the bank has rejected the demand by activist hedge fund Relational Investors LLC to inspect certain records of the c...

By Stephen Taub • Nov. 11, 2005

Rethinking the Worst Case

To understand how Hurricane Katrina is changing the way Corporate America thinks about disaster recovery, look no further than the computer-services company in New Orleans that located its data center to the third floor of its building to preclude any possible risk of flood damage. “I salute them...

By Randy Myers • Nov. 10, 2005

An Ounce of Retention

Two years ago, Gary Loveridge had a sudden realization — the bad kind. As general counsel for Sutter Health, a nonprofit health-care network, he realized that the way his organization handled growing volumes of E-mail posed a risk. Sutter Health is a highly decentralized group with 40,000 employe...

By Yasmin Ghahremani • Nov. 9, 2005

MBIA Restates, Sets Reserve

MBIA Inc. announced that it has set aside $75 million to settle several regulatory probes and will restate its financial results going back to 1998.The holding company for MBIA Insurance Corp., which provides financial guarantee insurance, added that it would file its delayed third-quarter result...

By Stephen Taub • Nov. 8, 2005

CEO Resigns, CFO to Leave RenaissanceRe

RenaissanceRe Holdings Ltd. announced that chairman and chief executive officer James Stanard has resigned. Neill A. Currie was named CEO and W. James MacGinnitie, non-executive chairman.The insurance company added that chief operating officer and chief financial officer John M. Lummis plans to r...

By Stephen Taub • Nov. 2, 2005