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A&A

The Top 10 Scams, Schemes & Scandals for 2004

State securities regulators forecast that investors will be challenged with increasingly complex and confusing investment frauds and identified the Top 10 schemes investors are likely to see in 2004. New to the NASAA annual survey of state securities enforcement officials are mutual fund practices, senior investment fraud, and variable annuities.“Investors face a complex maze of scams, schemes and scandals," said Ralph A. Lambiase, NASAA's president and director of the Connecticut Division of Securities.
Practice Management

How to Avoid Getting Burned by Document Forgery

An increasingly common form of fraud involves forging signatures on checks, wills, business forms, property deeds and other important documents.
A&A

IRS Launches a New Program for Business Taxpayers

On January 12, the Internal Revenue Service launched a new program for new business taxpayers designed to boost electronic payment of taxes. This development offers some taxpayers new, quicker access to an electronic payment system.This initiative will be available using the Electronic Federal Tax Payment System (EFTPS), a service offered free by two bureaus of the U.S. Department of the Treasury, IRS and the Financial Management Service (FMS).
A&A

Spitzer Suit Tests Validity of New Federal Banking Rules

In an effort to test the laws governing whether federally chartered banks fall under state consumer protection regulations, New York attorney general Eliot Spitzer filed suit on Friday on behalf of a bank customer.The Bush administration has championed laws that keep federally chartered banks insulated from state consumer laws, a stand that many Democrats and most of the state attorneys general take issue with.The new rules were issued on Jan.
A&A

Congress to Consider Withholding Taxes From Contractor Pay

The taxpayer advocate is recommending that independent contractors have taxes withheld from payments, similar to the system used to tax regular employees. The advocate, Nina E. Olson, holds a position created by Congress in 1998 to ensure taxpayers are treated fairly by the Internal Revenue Service. Olson’s office is required to produce an annual report to Congress that lists the most pressing concerns in order of importance.
A&A

Report Says Top Execs Failing to Pay Off Company Loans

Many top executives are failing to pay back money they borrowed from their employers before the Sarbanes-Oxley Act stopped the practice 18 months ago, according to a new report.The Corporate Library’s study, released Friday, says the average outstanding loan is $4.7 million for the 44 companies that disclosed the information. The Union Pacific Corp.
A&A

SBA Lending Program Gets Cash Influx, Restarts Popular Program

Thanks to an infusion of $470 million from Congress on Tuesday, the Small Business Administration was able to restart its popular 7(a) loan guarantee program, which was shut down earlier this month due to a lack of funding.The SBA’s program is caught in the middle of some unusually rancorous political haggling over the federal budget, which has left a number of agencies — including the SBA — operating without funding for the fiscal year that began Oct. 1. Without its appropriation, the agency had no choice but to suspend the program.
Tax

The Impact of Sarbanes-Oxley on Corporate Tax Departments

By Raj Kushwaha, EVP Products and Services, Velosant, LPThe United States’ Sarbanes-Oxley Act (U.S. Public Company Accounting Reform and Investor Protection Act) of 2002 marks the most significant reform in US public financial reporting of recent times. Designed to restore public confidence in the management of public companies following the outcry over Enron, WorldCom and others, Sarbanes-Oxley has impacted directly on the responsibilities and liabilities of Corporate Executives, Board of Directors, Audit Committees, Auditors and Analysts.
Community News

Survey: Workers Put Off by Favoritism, Hypocrisy

When employers play favorites among employees or look the other way on some questionable behaviors, they are doing more harm than they realize in an already ethically challenged society. They are setting a tone of unethical leadership within an organization.With most of the attention these days focused on high-level accounting frauds, a recent survey shows that most employees find hypocrisy and favoritism to be the most egregious of workplace ethical breaches.
A&A

SEC Proposes New Investment Rules, Fund Firms Oppose

On Wednesday, the Securities and Exchange Commission voted to propose three regulatory initiatives designed to better protect the 95 million investors in mutual funds. Later in the day, two of the nation's largest mutual fund groups, Fidelity Investments and Vanguard Group, said they oppose the plan by the US Securities and Exchange Commission to require chairmen of mutual fund boards to be independent.
A&A

Spitzer, SEC Ponders Action in Grasso Pay Matter

New York Attorney General Eliot Spitzer said Tuesday his office may investigate whether the compensation of former New York Stock Exchange Chairman Richard Grasso was appropriate for the head of a nonprofit organization. According to the Wall Street Journal, the stock-exchange board opted to refer the Grasso inquiry to both Mr. Spitzer and the Securities and Exchange Commission, and both plan to undertake inquiries.
A&A

Mortgage Industry Has a Long Way to Go With Customer Satisfaction

New CFI Group Study Shows Challenges For Mortgage Industry In Face of Reforms, Rate Increases A new survey of recent mortgage purchasers by the international consulting firm CFI Group, co-sponsored by Mortgage Banking Magazine, shows that mortgage lending ranks relatively low on customer satisfaction among financial services organizations.
Tax

Top Ten Most Often Missed Business Tax Deductions

Calling the millions of dollars that is overpaid to the Internal Revenue Service (IRS) each year, "a widespread epidemic", the Tax Recovery Group (TRG) is releasing their list of the top ten most often missed business tax deductions. Failing to utilize these deductions accounts for the majority of businesses overpaying their taxes, which, according to statistics, businesses throughout the country overpay their taxes to the sum of millions of dollars each year.
Tax

Suit Alleges EY, UBS Knew of HealthSouth Fraud

A suit filed last Thursday in U.S. District Court in the Northern District of Alabama charges that HealthSouth’s former auditors and investment bankers knew about fraud within the company long before it became public last year.The suit, brought on behalf of stock and bond investors who bought into the company between 1998 and 2002, claims that its former auditors at Ernst & Young, and former investment bankers at UBS Warburg, knew about fraud within the company even as they signed off on financial statements and sold HealthSouth securities to the public, the New York Times reported.
A&A

Tyco CEO's Bonus Cut Amid Compensation Scandals

In a year full of compensation scandals, 2003 ended with news that Tyco’s chief executive saw his bonus cut by more than half and received none of the nearly $19 million in restricted stock and options that he got last year, according to a proxy statement filed with the Securities and Exchange Commission.CNN reported Friday that Edward D. Breen received a $1.5 million bonus for 2003, down significantly from the $3.78 million he received in 2002. However, his salary increased from $278,846 in 2002 to $1.5 million in 2003.
A&A

SBA, Running Low On Funds, Shuts Down Popular Loan Program

As the Small Business Administration moved to temporarily close down its most popular loan guarantee program, some worry that as the economy begins to recover, this is not the time to shut off funds to small businesses.The SBA, which oversees loan guarantees for companies that don’t qualify for traditional bank loans, has not received its funds for the fiscal year that began in October.
A&A

Corporate Boards Logged More Time in 2003, Compensation Declines

In the wake of corporate scandals, the new Sarbanes-Oxley law and other governance and accounting requirements, nearly two-thirds of corporate boards of directors spent more time on their duties during the past year, according to the PricewaterhouseCoopers Management Barometer. Despite the added workload, board compensation increased at only 20 percent of companies, and remained the same at 47 percent. The remainder was either uncertain about board compensation or did not report. For those receiving a raise, the average increase was 17.9 percent.
A&A

NYSE Names Chief Regulatory Officer

As part of its ongoing efforts to clean up operations in the wake of the Richard Grasso compensation scandal, the New York Stock Exchange is expected to hire its first chief regulatory officer.Richard Ketchum, general counsel of Citigroup Inc.'s investment bank, is widely expected be approved for the position he accepted Monday since he already enjoys the support of the Exchange’s board of directors and soon-to-be chief executive John Thain.The full board is expected to meet today to formally approve the appointment and make a public announcement.
A&A

Ad Executives Accused of Bilking the Government

Not even the government’s war on drugs is immune from the scandals gripping corporate America. The Associated Press reported yesterday that the government is charging two ad industry executives with conspiracy for supposedly overcharging the government for an anti-drug campaign.The Ogilvy & Mather advertising agency was hired in 1998 by the Office of the National Drug Control Policy, part of the Executive Office of the President, to oversee a print and broadcast campaign on the dangers of drugs, designed to discourage drug use among young people. The campaign concluded last week.

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