Legal issues

Tax

Judge Bars MCI from Paying Additional Professional Fees

A District Court judge has ordered MCI to stop paying the numerous professional firms that guided it through its complicated, $104 billion bankruptcy.Judge Jed Rakoff, of the Southern District of New York, told the telecommunications giant and the firms in question to explain why a budgeting process he set up was not followed, according to the New York Law Journal. Several firms, he said, submitted excessive requests or had not received the proper approval.
Community News

California City in Distress, Files Suit Against Auditor

Wracked with debt and forced to sell off property to pay its employees, California's King City has filed suit against its former auditor, Moss, Levy & Hartzheim of Santa Maria, the Monterey Herald reported.

SEC Suspends Trading in Securities of 26 Delinquent Companies

The Securities and Exchange Commission suspended trading today in the securities of twenty-six companies for not making required periodic filings with the Commission. Because of these delinquencies, investors were unable to obtain current and accurate information about these companies. The trading suspensions will last for ten business days.
Tax

Consumers Now Have Access to Free Credit Reports, Enhanced Fraud Alerts

Starting December 1, 2004 consumers will begin to have more tools at their disposal to fight identity theft, protect against credit card fraud, and check-up on the health of their total credit picture under a new federal law. The Fair and Accurate Credit Transactions Act of 2004 (FACT Act) was signed into law in December 2003 giving residents of the western part of the United States the right to a free copy of their credit report each year.
Tax

Louisiana Men Sued in '100 %Tax Freedom' Scam

The Justice Department announced this week that it has sued two Louisiana men in federal court, seeking to halt an alleged tax scam involving the preparation of fraudulent tax returns for customers. The lawsuit alleges that Richard A. Fuselier, Richard J.

Judge Upholds Sarbanes-Oxley In Scrushy Fraud Case

Arguments that the Sarbanes-Oxley corporate reform law is unconstitutionally vague did not convince a federal judge, who has rejected Richard Scrushy's claims in his HealthSouth fraud case.Attorneys for Scrushy, HealthSouth's former chief executive, said the law should not be part of the indictment accusing him of fraud, the Associated Press reported. U.S. District Judge Karon O.

NASD Bars Quattrone From Securities Industry

NASD's National Adjudicatory Council (NAC) has permanently barred Frank Quattrone from working in the securities industry in any capacity for refusing to testify in an NASD investigation concerning his role in possible document destruction, obstruction of justice and other matters while at Credit Suisse First Boston (CSFB). The NAC overruled an earlier NASD hearing panel decision to fine Frank Quattrone $30,000 and suspend him for one year.
Tax

Suit Alleges IL Man Sold Bogus ‘Defense’ to Refusal to File Returns & Pay Taxes

The Justice Department on Wednesday asked a federal court in Chicago to stop William J. Benson, of South Holland, IL, from selling an allegedly fraudulent tax scheme and from unlawfully interfering with the Internal Revenue Service (IRS).
Tax

OSHA Orders Whistleblower Reinstated

Whistleblower David Windhauser, a controller for the Trane Corporation, must be reinstated and paid more than $105,000 in back wages, ruled the Department of Labor's Occupational Safety and Health Administration (OSHA). OSHA referred to the whistelblowing provisions of the Sarbanes-Oxley Act of 2002 when making its ruling that Windhauser's termination after he raised questions about the company's accounting practices to his supervisors, Business & Legal Reports (BLR.com) reported.Windhauser complained to OSHA's New York regional office after he was terminated. Patricia K.
Tax

Former KPMG Consultant Pleads in Conspiracy Case

In a case of aiding and abetting a corporate fraud, former KPMG consultant Larry Alan Rodda pleaded guilty to federal fraud charges Tuesday, admitting he signed phony contracts with Peregrine Systems intended to boost Peregrine's earnings, the San Diego Union-Tribute reported. The contracts, worth $25 million, were part of an elaborate accounting fraud that was uncovered in 2002. Eleven people were indicted last month and Rodda, 54, is the sixth person to plead guilty on federal charges, the Union-Tribune reported.His attorney, Craig C.
Technology

Microsoft Agrees to Pay $536 Million in Novell Settlement

Microsoft added this week to the billions it has paid to settle antitrust lawsuits brought by competitors, agreeing to pay $536 million to rival Novell Inc. The world's largest software company also settled with a trade organization that it has done legal battle with for years, the Wall Street Journal reported.Microsoft also settled with Computer and Communications Industry of America (CCIA), a Washington-based trade organization that had fought for tougher sanctions against Microsoft in the U.S. and had backed an antitrust suit brought against Microsoft by the European Union.

Vioxx Withdrawal Subject of SEC, Justice Department Probes

The Justice Department has issued a subpoena to Merck & Co.
Tax

Justice Dept. Seeks Injunction Against Promoter of Fraudulent Tax Scheme

The Justice Department recently announced that it has sued a Cincinnati-area man in federal court, seeking to halt an allegedly fraudulent tax scheme. The lawsuit alleges that Richard W. Standring, of Batavia, Ohio, gives seminars at which he falsely claims that he can help customers “decode” IRS records to help them establish that they need not file federal income tax returns or pay federal income taxes.
Community News

Disney Trial Shows Hollywood at its Worst

A Disney shareholder lawsuit is revealing a decidedly unglamorous picture of Hollywood, where threats and manipulation are considered business as usual.Michael Ovitz, the former president of the Walt Disney Co., has testified not only about the deep divisions in the company but also about the gritty reality of the entertainment business."From the time I started in the entertainment business, every network and every studio has threatened to sue every other company on a daily basis," Ovitz said during the trial, according to the New York Times.
Tax

Defendants Convicted in First Enron Trial

The government has secured all-important convictions against the first group of Enron defendants, signaling that juries have had enough of corporate malfeasance, the New York Times reported.Convicted Wednesday in a Houston federal court were four former Merrill Lynch executives and a former Enron official, who were found guilty of conspiring to help Enron report false profits.

Time Warner Prepares for Settlement with $500M Reserve

A government investigation into accounting practices at America Online has prompted Time Warner to set aside $500 million to cover the costs of potential fines.The New York Times reported that the step led to a 7.8 percent drop in profits in the third quarter.The Securities and Exchange Commission and the Justice Department are looking into the accounting for a $400 million payment that AOL received from Bertelsmann, the German media company that once owned half of AOL Europe.

SEC Faces Controversial Agenda, Possible Turn Over

The Securities and Exchange Commission's make up could change now that the election is over and proponents of some reform measures are hoping to see their agendas through the process before there are changes, the Washington Post reported.Among the most controversial items pending before the SEC is a year-old proposal that would give unhappy shareholders more authority to nominate candidates to sit on corporate boards, in some cases.While such high-power lobby groups as the U.S.
Technology

Former E&Y Audit Partner Faces Five Years on Obstruction Charges

Former Ernst & Young audit partner Thomas Trauger went to great lengths to keep from being “second-guessed” and last week pleaded guilty to charges he obstructed a federal investigation.The subject of the government's probe was NextCard Inc., a San Francisco company that distributed credit cards via the Internet. The company's troubles began when it handed out too many cards to unqualified holders, the Associated Press reported.
Community News

Sarbanes-Oxley Credited for Revenue Increase in U.K. Firms

The Sarbanes-Oxley Act is giving a boost to United Kingdom accounting firms, which are helping 40 of the country's top 100 firms to comply with the act.Because those 40 firms are listed publicly in the U.S., they are required to comply with Sarbanes-Oxley, which was passed in 2002 to clean up corporate America.The U.K.
Community News

Wells Fargo Customer Data on Stolen Computers

Wells Fargo customers' names, addresses, Social Security numbers and account numbers are accessible on four computers stolen recently from a vendor. Wells Fargo officials would not say how many mortgage and student-loan customers were affected, but they did say that no passwords or personal identification numbers were in the database, the Associated Press reported. The customers were warned to file security alerts with the three major credit bureaus."There is no indication that the stolen information has been misused," said Wells Fargo spokeswoman Janis Smith.

Pages