Legal issues

Technology

Internet Providers Team up to Sue Alleged Spammers

Four Internet providers have filed a series of lawsuits accusing hundreds of people of clogging e-mail boxes with millions of unwanted e-mail solicitations.The four companies — Microsoft Corp., Time Warner Inc.'s America Online Inc., EarthLink Inc. and Yahoo Inc. — filed six lawsuits in the first test of the federal Can Spam legislation that went into effect Jan. 1, the New York Times reported.
Community News

Firm Settles Two Class-Action Lawsuits over Tax Shelters

One of the biggest law firms in Dallas has agreed to pay $75 million to about 100 former clients who claim the firm designed and sold tax shelters that were rejected by the IRS.The firm, Jenkens & Gilchrist, issued a statement Friday saying the settlement "does not indicate we agree with any of the plaintiffs’ claims," and calling it "a sound business decision." The agreement, involving two class-action suits filed in 2002 and 2003, still needs court approval."Suffice it to say there's hundreds of millions of dollars in fees paid to people, and that doesn't include penalties" levied by
Technology

American Companies Failing to Address Retention of E-mail, Electronic Documents

Nearly half of American companies haven't adopted records retention policies for e-mail and other electronic documents, despite the serious issues raised about corporate records keeping over the past two years.In a new survey of 2,200 records managers, 47 percent said their company does not include electronic records in its retention and destruction schedules.
Tax

Judge Throws Out Most Serious Count in Tyco's Kozlowski Case

The most serious charge of enterprise corruption was tossed out Friday by the State Supreme Court justice overseeing the now five-month long trial of former Tyco Chief Executive Dennis Kozlowski, 57, and former Chief Financial Officer Mark Swartz, 43.The two remain on trial for alleged grand larceny, falsifying business records and violating state business laws, the Associated Press reported.
Community News

SEC Subpoenas 65 Former NYSE Directors in Grasso Pay Flap

Former New York Stock Exchange Chairman Richard Grasso has made it clear he has no plans to return any of the $139.5 million compensation package that forced his ouster last September.
Technology

Deluge of Worms May be Work of Dueling Hackers

Some security experts believe the flood of malicious Internet worms over the last several days may be the work of competing hackers."It's not some attempt to destroy the world, but I see it as clearly concerted," said Vincent Gullotto, vice president of McAfee's AVERT virus research team, as reported by TechWeb News. "There's some kind of competition going on between two individuals or two groups," he said, referring to the Bagle and Netsky worm writers.
Practice

Executives Will ‘Never be Above the Law’

About two years ago it began and now the names Enron, WorldCom, Tyco, HealthSouth and Adelphia Communications are among those associated with scandal.
Community News

Deloitte to Defend Executives Caught Up in Parmalat Scandal

With Grant Thornton’s American branch severing ties with its Italian affiliate in the wake of the Parmalat scandal, Deloitte Touche Tohmatsu is taking the opposite approach, saying yesterday it will "vigorously defend" two of its partners facing charges in the case.Deloitte took over auditing duties of the now defunct dairy giant from Grant Thornton in 1999 and remained the company’s auditor until the company declared bankruptcy late last year.
Tax

WorldCom’s Ebbers Indicted on Federal Charges

Former WorldCom chief executive Bernard Ebbers was indicted yesterday on federal charges, including securities fraud, conspiracy to commit securities fraud, and making false filings with the Securities and Exchange Commission. In a surprise move, the company’s former chief financial officer Scott Sullivan pleaded guilty and agreed to cooperate with prosecutors.The 31-page Ebbers indictment was filed in U.S. District Court in Manhattan and was announced by U.S.
A&A

FleetBoston’s Specialist Unit Settles With SEC, NYSE

FleetBoston Financial Corp. has disclosed that its Fleet Specialist Unit will pay $59.4 million in a settlement with the Securities and Exchange Commission and the New York Stock Exchange.The settlement stems from an investigation of the NYSE’s five largest specialist firms, who were accused of failing to oversee traders who improperly traded ahead of their customers. In a preliminary agreement announced Feb.
Community News

NYSE Wants Money Back, Grasso Digs In

Former New York Stock Exchange chairman Richard Grasso has let the Big Board know that he has no intention of returning any of the $139.5 million in retirement pay that led to his resignation last fall and he still intends to seek the $57.7 million he thinks he is owed. In a letter from his attorney Brendan V. Sullivan, Grasso says he "has no intention of returning any portion of his compensation to the Exchange," and that "if the Exchange believes it has a valid claim, it should file it, rather than conducting a campaign through the press…in an attempt to pressure Mr.
Tax

KPMG Tax Shelter Probe Widens, Another Firm Enters the Picture

Presidio Advisory Services LLC, a San Francisco-based company founded by two former KPMG partners, has been "informally" contacted by federal prosecutors looking into three of KPMG’s tax shelter strategies.KPMG, one of the "Big Four" accounting firms, admitted last week that it is the subject of a federal probe "in connection with certain tax strategies," the Wall Street Journal reported.
Tax

Enron's Skilling Indicted for Fraud, Pleads Not Guilty

Former Enron chief executive Jeffrey Skilling surrendered to the FBI in Houston Thursday, accused of fraud, insider trading and lying about the company’s finances in a 42-count criminal indictment.Skilling, 50, is the highest ranking former executive to be charged in the implosion of the once-formidable energy giant. After surrendering, Skilling was taken in handcuffs to the federal courthouse, where an arraignment hearing was held.
Tax

SEC Charges Enron's Skilling With Fraud, Seeks Disgorgement of all ill-gotten Gains

The Securities and Exchange Commission announced on Thursday of this week that it has charged Jeffrey K. Skilling, Enron Corp.'s former President, Chief Executive Officer and Chief Operating Officer, with violating, and aiding and abetting violations of, the antifraud, lying to auditors, periodic reporting, books and records, and internal controls provisions of the federal securities laws. The charges, which amend the Commission's Complaint filed against Richard A. Causey, Enron's former Chief Accounting Officer, in U.S.
Tax

Sham Site's a Scam: There Is No 'National Do Not E-mail Registry'

Have you submitted your e-mail address to a "National Do Not E-mail Registry" that promises to reduce the amount of spam (unsolicited e-mail) you receive? If so, you are the victim of a scam, according to the Federal Trade Commission, the nation’s consumer protection agency.The Web site at "unsub.us" mimics the language, look, and navigation of the Web site for the National Do Not Call Registry, a legitimate free service of the federal government. The unsub.us site is not run or authorized by the FTC.
Tax

Criminal Charges Against Enron’s Skilling Expected Soon

A criminal indictment against former Enron chief executive Jeffrey Skilling is expected to be handed up sometime this month, sources close to the case say.Two sources, who spoke to the Houston Chronicle last week on condition of anonymity, said federal prosecutors were finalizing criminal charges against Skilling. Specific charges were not known, but the sources said that the Department of Justice investigation has heated up in recent weeks and that information provided by former finance chief Andrew S.
A&A

Firms to Pay Over $21.5 Million in Penalties to Settle SEC, NASD Charges

The Securities and Exchange Commission (SEC) and NASD announced this week enforcement and disciplinary actions against a total of 15 firms for failure to deliver mutual fund breakpoint discounts during 2001 and 2002. Breakpoint discounts are volume discounts applicable to front-end sales charges on Class A mutual fund shares (front-end loads). SEC and NASD each brought cases against a group of 7 firms, and NASD separately brought actions against the other 8 firms.
A&A

FASB Confirms Existing Rules on Medicare Accounting

The Financial Accounting Standards Board (FASB) on Wednesday cleared up some of the confusion surrounding accounting for the effects of the new Medicare law.The Medicare Act, signed into law in December, has sparked not only political arguments but also an accounting debate over how companies should book the amount of federal subsidy they expect to receive in their financial statements.FASB’s Wednesday vote confirmed that existing rules governing post-retirement benefit costs should be used.
Tax

IRS, States Move Forward in Fight Against Abusive Tax Avoidance

Internal Revenue Service officials announced this week that they will begin sharing leads on more than 20,000 taxpayers engaged in abusive tax avoidance with tax agencies in 45 states, the District of Columbia and New York City. The IRS also announced the latest results of another effort to combat abusive tax avoidance, the Offshore Voluntary Compliance Initiative (OVCI).The sharing of leads was the first large transfer of information under the terms of the new IRS-state partnership unveiled in September.
A&A

Massachusetts Financial Strikes Tentative Deal with Regulators

Boston-based Massachusetts Financial Services Co. reached a tentative settlement last week with regulators whereby it will pay pay $225 million in penalties and cut its management fees by $125 million, according to people familiar with the talks, the Wall Street Journal reported.This would mark the second-largest penalty levied in the ongoing mutual fund investigations. MSF is a subsidiary of Sun Life Financial Services of Canada Inc.

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