SEC

Tax

Franklin Advisors Announces $20M Settlement

On Monday, The Securities and Exchange Commission (SEC) filed settled charges against Franklin Advisers, Inc. (FA) and Franklin Templeton Distributors, Inc. (FTDI) (collectively, Franklin), the investment adviser and principal underwriter and distributor affiliated with the Franklin Templeton mutual funds, alleging that Franklin, without proper disclosure, used fund assets to compensate brokerage firms for recommending the Franklin Templeton mutual funds over others to their clients.
A&A

SEC's Chief Accountants Statement on FASB's Action

On Thursday, the Financial Accounting Standards Board (FASB) issued its Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (Statement 123R), which addresses the accounting for employee stock options. The Commission's Chief Accountant, Donald T. Nicolaisen, issued the following comments on Statement 123R:The issuance of Statement 123R represents another important improvement in US generally accepted accounting principles. It will result in more comparable information in financial statements provided to investors.
Practice Management

Business Groups Begin Quiet Campaign to Oust SEC's Donaldson

The Business Roundtable, the U.S. Chamber of Commerce, the National Association of Wholesaler-Distributors played a critical role in reelecting President Bush. Now the groups are part of a quiet effort to convince the President that it's time for a new Securities and Exchange Commission chair, the Wall Street Journal reported.Believing the post-Enron reforms have led to a strangled business environment, in part because of the greater authority given to the SEC by the Sarbanes-Oxley corporate reform legislation.
Community News

WSJ: SEC Won't Fine Global Crossing Founder

The Wall Street Journal has reported that the Securities and Exchange Commission will not file securities charges against former Global Crossing Chairman Gary Winnick or fine him $1 million. The Journal, which cited people familiar with the matter, reported that SEC Chairman William Donaldson said that Winnick was a nonexecutive chairman who had not signed off on the disclosures involving a series of questionable transactions. The disclosures were inadequate, and Winnick had agreed to pay the $1 million fine as part of a settlement agreement.

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.

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