SEC

Court Defies SEC, Upholds Limitations on Expiring Fraud Claims

Before Sarbanes-Oxley, the law stated that investors who were made aware of fraudulent activities had to file lawsuits against the misbehaving companies within one year of discovering the fraud and within three years of the actual fraudulent activity.
Community News

Accounting Firm Trades In SEC Practice for Governance Practice

Many accounting firms expanded into providing corporate governance services in the wake of the Sarbanes-Oxley Act of 2002, but very few have also divested themselves of their own public company clients.
Community News

SEC’s Laura Cox to Leave Commission to Join PricewaterhouseCoopers

The U.S. Securities and Exchange Commission has announced that Laura L. Cox, Managing Executive for External and Governmental Affairs and a member of Chairman Donaldson’s three-person, senior management team will leave the Commission to join PricewaterhouseCoopers LLP, as Partner-In-Charge of Professional and Governmental Activities. Chairman William H. Donaldson said, "Laura has played a critical role at an historic and challenging time in the Commission’s history.

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.
Community News

Former Executives Settle SEC Civil Charges in Kmart Fraud

Five former executives from Kmart and its vendor companies settled Securities and Exchange Commission civil charges this week stemming from a $24 million accounting fraud they oversaw at the retail giant, the Associated Press reported.The SEC had been looking into Kmart's spiral into bankruptcy protection in January 2002 and discovered that Kmart had boosted earnings by improperly booking millions in vendor payments from Eastman Kodak Co., Coca Cola Enterprises Inc., and PepsiCo Inc.

SEC Grants Extension On Internal Controls Reporting

The U.S. Securities and Exchange Commission on Tuesday issued an exemptive order to grant certain accelerated filers up to an additional 45-days to include in their annual reports management’s report on internal control over financial reporting and the related auditor’s report on management’s assessment of internal control over financial reporting. Both internal control reports are required under Commission rules implementing Section 404 of the Sarbanes-Oxley Act of 2002.

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.
Community News

PCAOB Releases Additional Guidance for Audits of Internal Control

The Public Company Accounting Oversight Board (PCAOB) this week released the third in a series of staff questions and answers to assist in the implementation of PCAOB Auditing Standard No. 2, regarding audits of public companies' internal control over financial reporting. The questions and answers, prepared by the PCAOB’s Office of the Chief Auditor, emphasize the flexibility provided by Auditing Standard No.

SEC Postpones Final Phase-In Period for Acceleration of Periodic Report Filing Dates

On Wednesday, the U.S. Securities and Exchange Commission issued a release adopting amendments to postpone, for one year, the final phase-in period for acceleration of periodic report deadlines that apply to larger companies known as "accelerated filers." The primary purpose of the postponement is to allow additional time and opportunity for accelerated filers and their auditors to focus their efforts on complying with new requirements regarding internal control over financial reporting that were mandated by Section 404 of the Sarbanes-Oxley Act of 2002.
Tax

Boiler Room Operations Charged with Fraud, Investor Warning

The Securities and Exchange Commission ("SEC") this week filed civil fraud charges in federal court in the Southern District of Florida against six boiler room operations in connection with their operation of a series of recovery room advance-fee schemes directed primarily at previously victimized investors from a number of countries. A "recovery room advance fee" scheme is a fraud wherein the perpetrators prey on investors who have lost money on particular stocks they purchased in the past.
Community News

SEC Contemplates Extension on Some Internal Control Reviews

Section 404. Just the words are enough to add to the collective stress level of corporate America, as executives scramble to clear the next hurdle brought about by sweeping reforms. Dow Jones Newswires reported last week that some smaller companies may get an extension on filing internal control documentation-showing they have effective controls in place and have had the controls attested to by an independent auditor.
Tax

SEC Files Fraud Charges Against Hollinger, Inc. & CEO, Conrad Black

The Securities and Exchange Commission announced on Monday that it has filed an enforcement action against Hollinger International's former Chairman and CEO Conrad M. Black, former Deputy Chairman and COO F. David Radler, and Hollinger, Inc., a Canadian public holding company controlled by Black. The Commission's complaint alleges that from approximately 1999 through 2003, Black, Radler and Hollinger Inc. engaged in a fraudulent and deceptive scheme to divert cash and assets from Hollinger International, Inc., a U. S.

SEC's Future Up for Debate

As the Bush administration makes plans for its second term, a looming question is whether Securities and Exchange Commission Chairman William Donaldson will remain a part of it.
A&A

SEC Debates Whether Whopping Fines Hurt More than Help

Do huge corporate fines deter fraudulent behavior or harm the very shareholders they are intended to benefit?The five Securities and Exchange Commissioners are becoming more divided on the question, as the two Republican commissioners are frequently voting against huge fines imposed upon publicly traded companies for shaky accounting procedures, mismanagement and fraud. The Wall Street Journal gave these examples: Republicans Paul Atkins and Cynthia Glassman earlier this month voted against a $37 million fine against Wachovia Corp.
Community News

SOX Takes Toll on Industry Confidence, Client Ratings of Accounting Firm Performance

The stress of meeting the requirements for corporate financial accountability is taking a toll on confidence and client ratings within the accounting industry, according to the J.D. Power and Associates 2004 Audit Firm Performance Study(SM) released today. The study, which measures audit firm performance in the wake of the Sarbanes-Oxley Act of 2002, is based on interviews with 1,007 audit committee chairs and 944 chief financial officers. The study finds a significant amount of angst among audit committee chairs and CFOs in the industry.
A&A

SEC Considering Plan to Standardize Exchange Governance

The Securities and Exchange Commission's five commissioners agreed to float a plan released today that would require 10 U.S. stock markets to file quarterly reports with regulators, Bloomberg reported.The exchanges, which include the New York Stock Exchange, would also have to ensure that a majority of their directors are independent.
Community News

Marsh Plans Steep Job Cuts Amid Plummeting Returns

Marsh & McLennan Cos. announced plans to lay off 3,000 workers as its profits nosedive and it prepares for a potentially costly settlement related to bid-rigging charges. The company said it has set aside a $232 million settlement reserve, which hurt third-quarter profits, the Wall Street Journal reported.
Community News

SEC Looking At 'Best Execution' Obligations

The Securities and Exchange Commission has an investigation that could uncover another instance of brokerage firms considering their bottom line ahead of their investors, the New York Times reported.The SEC is looking into more than 10 brokerage firms, including Morgan Stanley, Merrill Lynch, Ameritrade, Charles Schwab and E*Trade Financial, suspecting the firms failed to get the best prices for their customers on Nasdaq-listed securities when the markets open for the day.

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.

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