SEC

Tax

SEC Charges Raymond James With Fraud

The Securities and Exchange Commission's Division of Enforcement last week brought civil fraud charges against Raymond James Financial Services, Inc., a registered broker-dealer and investment adviser headquartered in St. Petersburg, Fla., based on the conduct of one of its former brokers, Dennis Herula.

SEC Warns Insurer that Misleading Statements May Result in Civil Action

The Securities and Exchange Commission has threatened legal action against American International Group Inc., saying the insurer made misleading statements about government investigations into questionable financial transactions.The statements came in three press releases the company issued between 2002 and last week, the Wall Street Journal reported. The releases discussed transactions that one of AIG's units arranged for PNC Financial Group several years ago that helped the bank's quarterly results look less volatile.
Technology

AICPA Welcomes SEC's Proposed Rule on Use of XBRL

In response to last week’s proposing and concept releases by the U.S. Securities and Exchange Commission (SEC) on XBRL-Tagged Data in Commission Filings, the American Institute of Certified Public Accountants (AICPA), believes this is an ideal time for companies to embrace the XBRL (Extensible Business Reporting Language) standard as an important step in helping to enhance and modernize financial reporting.
Technology

SEC Proposes Voluntary Rule for Reporting on Edgar Using XBRL

As part of its initiative to assess the benefits of tagged data and its potential for improving the timeliness, accuracy and analysis of financial disclosure in Commission filings, the Securities and Exchange Commission issued a proposing release today to establish a voluntary program

SEC Chairman: Find Solutions Before Problems Explode

Securities and Exchange Commission Chairman William H. Donaldson wants the regulator to fix small problems before they become front-page news.It's a change in philosophy for an agency that has spent the last couple of years chasing after wrongdoing uncovered by New York Attorney General Eliot Spitzer.
Technology

Auditors are Urged to Test Information System Integrity

Sarbanes-Oxley is clear: companies must have internal controls in place and the effectiveness of those controls must be audited.
Tax

GE Settles Enforcement Over Failure to Disclose Welch's Perks

The Securities and Exchange Commission announced last week that it has instituted settled enforcement proceedings against General Electric Company (GE). The Commission charged that GE failed to fully describe the substantial benefits it had agreed to provide its former chairman and CEO John F.

GE's Statement on Recent SEC Action

General Electric Company (GE) issued the following statement recently regarding the Securities and Exchange Commission's (SEC) announcement on the Employment and Post-Retirement Consulting Agreement of former GE CEO Jack Welch: GE has cooperated fully with the SEC's informal investigation into the disclosure of Jack Welch's Employment and Post-Retirement Consulting Agreement. As part of that cooperation and in keeping with GE's longstanding emphasis on compliance, GE has settled this administrative matter, while neither admitting nor denying the SEC's findings.
Community News

SEC Under Fire Over Implied Rule

Financial planners are crying foul and asking the Securities and Exchange Commission to crack down on brokers who offer fee-based accounts and investment advisory services without having to follow the same strict rules required of financial planners, Dow Jones reported.The SEC has received more than 900 letters from financial planners urging resolution of an issue that has been around for years."These brokers are trying to provide essentially the same services that I provide as a financial planner," wrote Charles O'Connor, who runs a Torrance, Calif., advisory firm, and reported by Dow J

U.S. Chamber Seeks to Block SEC Mutual Fund Company Rule

A controversial new rule from the Securities and Exchange Commission is under attack by the U.S. Chamber of Commerce, which filed an emergency motion Monday in the U.S. Court of Appeals for the D.C. Circuit.The Chamber of Commerce, which represents U.S. businesses, is looking to protect the interests of mutual fund companies who will be required to ensure that 75 percent of company directors, including the chairman, be independent of the fund company beginning in 2006, the Associated Press reported. The Chamber of Commerce requested a court ruling by Oct.
Community News

SEC's Chief Accountant Objects to KPMG's Recent Statement to Clients

KPMG LLP has removed a contested statement that appeared in a summary of findings from the firm's first-ever inspection by the Public Company Accounting Oversight Board (PCAOB).

Lawmaker: Fannie Mae May Have Manipulated Earnings

Fannie Mae's federal regulator has suggested that the mortgage finance company may have manipulated earnings to justify bigger bonuses to executives.According to a lawmaker briefed on the findings of the regulator's eight-month investigation, Fannie Mae apparently used questionable practices to make volatile earnings appear more steady from quarter to quarter, the Associated Press reported.The Office of Federal Housing Enterprise Oversight (OFHEO) presented its report on Fannie Mae's accounting practices to the board of directors Monday. A spokesman for U.S. Rep.
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

SEC Warns Big Four Against Dropping Small Clients

The Securities and Exchange Commission is worried that the Big Four accounting firms are using the Sarbanes-Oxley Act as a handy excuse to drop smaller, less profitable audit clients.The firms, however, say they simply do not have the staffing they need to help big companies meet the new internal control requirements of the law while serving the same number of smaller businesses, Bloomberg reported.Ernst & Young CEO James Turley, for example, has testified before Congress that Sarbanes-Oxley has drained resources across the profession.
Tax

Charles Schwab Settles Mutual Fund Probe for $350K

On Tuesday, the Securities and Exchange Commission (SEC) announced that it has instituted settled enforcement proceedings against San Francisco-based broker-dealer Charles Schwab & Co., Inc. The Commission charged that Schwab allowed investment adviser customers to change mutual fund orders after the 4:00 p.m. Eastern time market close, creating the risk that such customers could unfairly capitalize on late-breaking news at the expense of other mutual fund investors.
Tax

Pimco Settles Fraud Charges for $50 Million

The Securities and Exchange Commission this week announced that PA Fund Management LLC (PAFM), PEA Capital LLC (PEA), and PA Distributors LLC (PAD) (collectively, the PIMCO Entities) agreed to a settlement of charges that they defrauded investors in the PIMCO Funds: Multi-Manager Series in connection with an undisclosed market timing arrangement. Under the settlement, the PIMCO Entities have been ordered to pay $50 million, consisting of $10 million in disgorgement and a civil penalty of $40 million.

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.
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.
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.

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