Legal issues

Technology

Microsoft Launches New Software Piracy Check Point Program

Microsoft has recently launched a program to help address piracy issues with their popular software. This new program called "Windows Genuine Advantage" is a new validation on Microsoft's download center. The program, which is voluntary at present, asks visitors to the Download Center to check that the Windows software installed on their machines is in fact a legitimate and licensed copy. Eventually, Microsoft could make the program mandatory.
Tax

First Enron Case to Set the Stage for Others

What do electricity-producing barges off the coast of Nigeria have to do with the implosion of energy giant Enron nearly three years ago? Not much directly, but government prosecutors are hoping this first obscure Enron-related trial, beginning today in Houston federal court, could lay the groundwork to catch the bigger fish.The government believes that Enron's sale 1999 sale of an interest in the Nigerian barges to Merrill Lynch & Co. was fraudulent and allowed the company to record nearly $12 million in pretax profit, the Wall Street Journal reported.
Community News

Ernst & Young, Capgemini Agree to $20 Million Travel Expense Settlement

The class action travel-billing lawsuit that has plagued Big Four firms Ernst & Young, PricewaterhouseCoopers and KPMG, and consultancies BearingPoint and Capgemini has finally come to an end.
A&A

Enron Sells Pipelines, Uses Proceeds to Fund Pension Plans

As part of an agreement with the federal government's Pension Benefit Guaranty Corporation (PBGC), beleaguered energy giant Enron Corp. has agreed to place $321 million in an escrow account in order to fully fund four defined-benefit pension plans. The money will come from proceeds of the $2.45 billion sale of the company's U.S. pipeline business.
Tax

Former Executive Joins Most Wanted List

Getting your picture on the wall in the post office is not usually a time for celebration. For Tomo Razmilovic, the disgraced former president and CEO of Symbol Technologies Inc., the Holtsville, NY bar code scanner company, it simply means he is in no hurry to return to his former home in the United States. "I still believe in the American judicial system," the 62-year-old Mr.
Community News

Identity Theft Perpetrator Pleads Guilty

A 35-year-old former help desk associate at Teledata Communications Inc. (TCI) has pleaded guilty in federal court to charges in what may be the largest identity theft case in U.S. history. New Yorker Philip Cummings appeared in federal court Tuesday to plea to wire fraud, fraud, and conspiracy charges in the case which reportedly bilked more than 30,000 victims out of more than $2.7 million.Cummings was employed at TCI during 1999 and 2000. TCI is a company that provides computer access to credit reports for banks and other financial institutions. During his employment with TCI, Mr.

Qwest Nearing $250M Settlement with SEC

Qwest Communications International and federal regulators have reportedly agreed to a $250 million settlement of a two-year investigation into the alleged financial misdeeds of former Qwest executives.The agreement has not been finalized, and neither the Securities and Exchange Commission nor Qwest would comment on the matter, according to the Business-Standard, an Indian business daily.Union leaders at the Communications Workers of America told the newspaper that Qwest informed them about the pending agreement.
Tax

IRS Claims Waddell & Reed Chief Executive Owes $21.7M

The Internal Revenue Service is seeking $21.7 million from Waddell & Reed Financial chief executive Keith Tucker, who allegedly used an abusive tax shelter to claim $39.2 million in deductions, the Kansas City Star reported.The IRS rejected the deductions contained in the 2000 federal tax return, saying the companies that generated the losses lacked “economic substance for federal income tax purposes.” Tucker and his wife are fighting the IRS in U.S.
Community News

Deloitte & Touche to be Questioned in DVI Bankruptcy Case

Creditors of the fallen medical finance firm DVI Inc. can question the company's former accounting firm, Deloitte & Touche, about their audits and regulatory filings, a bankruptcy judge ruled Thursday.According to the Wall Street Journal, the firm opposed the examination of their records because others suing the firm could take advantage of the information uncovered in the probe.A court-appointed examiner in April found that DVI became “addicted” to the steady cash flow of securitizations and manipulated them, leading to the company's collapse.
Community News

Trucking Company is Seeking Permission to Sue E&Y Over Merger

Swift Transportation Co. Inc. is seeking court permission to sue its former accounting firm for an “erroneous audit report” of a company it merged with in 2001.Swift said in court documents that it relied on a “fraudulent” audit, resulting in damages of more than $100 million, according to the Arizona Republic. "As a result of E&Y's wrongful conduct, Swift concluded a merger with M.S. Carriers that it otherwise would not have consummated," Swift said in court records.
Community News

Big Four Lose Campaign to Limit Auditor Liability in UK

The United Kingdom has rejected a proposal to place a cap on the liability auditors face when a company goes under.The decision, by the UK's Department of Trade and Industry, struck a blow to the Big Four's hopes that the UK would agree to the cap and spur other European countries to follow.Jeremy Jennings, global director of regulatory and government relations for Ernst & Young Global in Brussels, told the Wall Street Journal: "It is doubtful whether the EU will conclude there is a need for change when one large member state has decided there is not.”The Big Four - PricewaterhouseC

SEC Faces Lawsuit over Independent Fund Director Rule

The U.S. Chamber of Commerce has gone to federal court to stop a requirement that mutual fund boards have independent chairmen and majorities of independent directors.The group, representing 3 million businesses, says the SEC's requirements go too far. The 1940 Investment Company Act says that only 40 percent of directors must be independent, the court papers say. The suit was filed last Thursday in U.S District Court for the District of Columbia and the U.S. Court of Appeals for the D.C.
Tax

Judge Allows Tax Shelter Suit Against Law Firm to Proceed

A federal judge has allowed an aggrieved tax shelter client to pursue a fraud lawsuit against Deutsche Bank AG and the law firm of Sidley Austin Brown & Wood.While the courts have thrown out similar suits against Sidley Austin and others, U.S. District Court Judge Shira A. Scheindlin has ruled that a Virginia telecommunications executive can pursue his lawsuit, although not in New York, the Wall Street Journal reported. Scheindlin said the allegations of malpractice, breach of contract and breach of fiduciary duty could be refiled in Virginia.
Tax

Former CEO Gets 9 Years in Prison, $3.5M Fine

A federal judge has ordered a former chief executive to pay $3.5 million and serve more than nine years in prison for his part in a scheme that plunged his company into bankruptcy in 2001. The former executive of National Environmental Services Co. (Nesco), Eddy Lynn Patterson, was convicted in December on 22 counts of conspiracy, fraud, tax evasion and making false statements on loan documents, the Associated Press reported. His September 1 sentencing called for a federal prison term of nine year and two months.
Tax

Court Orders Hearing on IRS Whistle-blower Case

The Ninth Circuit Court of Appeals has given whistle-blower status to a former IRS chief tax collector who contends that he was demoted for speaking out about wealthy California taxpayers getting preferential treatment.Peter W. Coons, the former collection chief in Northern California, was demoted in 1999 after he complained that his supervisors told him to play favorites with several prominent taxpayers facing collection actions, the San Francisco Chronicle reported.
A&A

Former Invesco Executives Settle Market Timing Abuses

The Securities and Exchange Commission (SEC) announced this week settled enforcement actions against Timothy J. Miller, the former chief investment officer and a portfolio manager for Invesco Funds Group, Inc. (IFG); Thomas A. Kolbe, the former national sales manager of IFG; and Michael D. Legoski, a former assistant vice president in IFG's sales department. The Commission issued orders alleging that Miller, Kolbe and Legoski violated federal securities laws by facilitating widespread market timing trading in certain Invesco funds in contravention of those funds' public disclosures.
Tax

SEC Supports Extension on Statute of Limitations on Fraud Cases

The Securities and Exchange Commission has asked a U.S. federal appeals court to allow investors to sue companies for fraud even if the alleged violation took place after the statute of limitations had expired. Investors have been allowed to file lawsuits within one year of discovering fraudulent behavior and three years after the violation occurred. The Sarbanes-Oxley Act of 2002 changed those time limits to two years and five years, respectively. However, investors who have recently alleged fraud have done so even though the three-year limit had expired.
Community News

AFC Enterprises Takes Arthur Andersen to Court

AFC Enterprises wants its former accounting firm, Arthur Andersen, to pay back the fees it received from the fast-food chain from 2000 to 2002 and to cover the cost of professional fees it took to get its books back in order."We relied on Arthur Andersen to tell us if we had violated any generally accepted accounting procedures and standards, and they did not do that," said Neal Pope, whose law firm represents AFC.According to the Associated Press, the suit, which alleges malpractice and breach of contract, seeks unspecified monetary damages from Andersen.
A&A

Judge Tells Freddie Mac to Stop Withholding $60M in Ex-CEO's Pay

The former chief executive of mortgage giant Freddie Mac will receive about $60 million in compensation that was withheld by the company on orders from its regulator.A federal judge ruled Monday that the Office of Federal Housing Enterprise Oversight lacks the legal authority to freeze the assets of Leland Brendsel, who was ousted during last year's accounting scandal. The regulator told Freddie Mac to stop all pay and benefits for Brendsel while it was pursuing a civil lawsuit against him, the Wall Street Journal reported.U.S. District Court Judge Richard J.
Community News

Investigators Tell Story of Ex-CEO's Looting of Hollinger Millions

Conrad Black, the former CEO of Hollinger International, boldly and methodically abused his power to pocket millions of dollars that should have gone to the company, an internal investigation revealed.Three outside Hollinger directors prepared the dramatic, 500-page report, filed with the Securities and Exchange Commission on Tuesday.

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