SEC

Community News

Federal Governmental Offices, Markets to Close Friday: National Day of Mourning

On Monday, President Bush announced the closing of government departments and agencies this Friday, June 11 as a mark of respect for Ronald W. Reagan, the 40th President of the United States, who passed away last week. Former President Reagan died Saturday at his home in Los Angeles at the age of 93. A state funeral for the former president will be held at the National Cathedral in Washington, on Friday morning. Trading on the New York Stock Exchange, Nasdaq Stock Market and American Stock Exchange will be suspended for the day and all governmental offices will be closed.
Tax

Symbol Technologies to Pay $37M SEC Fine for Accounting Fraud

On Thursday, the Securities and Exchange Commission charged Symbol Technologies, Inc. with securities fraud and related violations of the reporting, record-keeping and internal control provisions of the federal securities laws. Eleven former Symbol executives were also charged in connection with their roles in the fraud.

SEC Overhauls Rule Proposal for Banks

On Wednesday The Securities and Exchange Commission unanimously approved a rule proposal exempting banks from some of the regulations that affect brokers.This is the SEC's second attempt to revise the rules for banks as mandated by the Gramm-Leach-Bliley Act of 1999. The Gramm-Leach-Bliley Act (GLBA) replaced banks' complete exception from the definition of "broker" with eleven "functional exceptions." The Commission today voted to propose new rules to implement the GLBA definition by defining some of the statutory terms used in the eleven exceptions.

SEC Looks to Hire Psychologist to Boost Employee Morale

Some think employee morale at the Securities and Exchange Commission (SEC) is at a new low in the wake of seemingly endless scandals, long hours for less pay than in the private sector and a series of embarrassments.To combat stress, burnout and conflict, the SEC is planning to hire an organizational psychologist to boost employee morale. The new, full-time job pays upwards of $147,978 per year and is a two-year appointment with the possibility of an extension. The SEC seeks a candidate with a degree in psychology with a master’s or doctorate preferred.
Tax

New SEC Rule Establishes Ethics Standards for Mutual Funds

The Securities and Exchange Commission voted this week to adopt a new Rule 204A-1 under the Investment Advisers Act and related amendments to Advisers Act Rule 204-2, Advisers Act Form ADV, and Rule 17j-1 under the Investment Company Act. New Rule 204A-1 would require registered investment advisers to adopt and enforce codes of ethics applicable to their supervised persons. The new rule is designed to prevent fraud by reinforcing the fiduciary principles that must govern the conduct of advisory firms and their personnel.
Community News

SEC Shoots Down Contingent Fee Loophole

The Securities and Exchange Commission's chief accountant has ruled that a tactic some accounting firms have used to justify charging audit clients contingent fees for tax advice flies in the face of auditor-independence rules.The ruling puts a damper on a lucrative practice for some firms, who are also suffering a revenue dip from shutting down questionable tax shelters.The Wall Street Journal reported that under a contingent-fee deal, a firm charges a percentage cut of whatever savings a client realizes as a result of the firm's advice.

Strong Capital Management Executives Barred from Mutual Fund Industry, Fined $140M

The Securities and Exchange Commission announced today a settled enforcement action against Strong Capital Management, Inc. (SCM), its founder and majority owner, Richard S. Strong, two affiliated entities and two other SCM executives, for allowing and, in the case of Strong, engaging in undisclosed frequent trading in Strong mutual funds in violation of their fiduciary duties to the Strong funds and their investors. The settled order requires the payment of more that $140 million in monetary remedies, and imposes regulated industry bars and other reliefStephen M.

PCAOB Auditing Standard No. 1 Effective May 24

The Public Company Accounting Oversight Board announced that its Auditing Standard No. 1, References in Auditors' Reports to the Standards of the PCAOB, has been approved by the U.S. Securities and Exchange Commission. PCAOB Auditing Standard No. 1 requires that auditors' reports on audits and other engagements relating to public companies and other issuers include a reference that the engagement was performed in accordance with the standards of the PCAOB. This replaces the previous reference to generally accepted auditing standards.
Tax

Lucent Agrees to a $25M Settlement; Ten Individuals Charged With Securities Fraud

The Securities and Exchange Commission today charged Lucent Technologies Inc. with securities fraud, and violations of the reporting, books and records and internal control provisions of the federal securities laws. The SEC also charged nine current and former Lucent officers, executives and employees, and one former Winstar Communications Inc. officer with securities fraud and aiding and abetting Lucent's violations of the federal securities laws.
A&A

Business-Owned Life Insurance is Topic of Latest GAO Report

A recent report out by the Government Accounting Office (GAO) titled BUSINESS-OWNED LIFE INSURANCE - More Data Could Be Useful in Making Tax Policy Decisions looks into the subject of Business Owned Life Insurance. Federal and state regulators, in pursuing their regulatory responsibilities, have collected limited data on the prevalence and use of business-owned life insurance. Federal bank regulators have collected more data than other regulators.
Practice Management

Shareholders Become More Active in Executive Pay Debate

Just because every other company is doing it doesn’t mean all shareholders are going to sit idly by and dole out huge pay packages to executives who aren’t producing equally high rates of return for investors.The Seattle Post-Intelligencer reported this weekend that a shareholder of a Southeast bank holding company has proposed a resolution for the company’s annual meeting, that basically asks, "If we shareholders aren't doing very well, why should you executives?"The shareholder’s resolution claims that even though the company’s stock fell over three years, top executives rece

GAO Recommends Twelve Actions For Exchange Listing Standards

Investors need timely and ongoing information on the listing status of issuers for use in making investment decisions.

Fannie Mae to Adopt New Accounting Standard

Fannie Mae is instilling a tougher accounting standard in response to reforms demanded by its regulator, the federal Office of Federal Housing Enterprise Oversight (OFHEO).The change, reflected yesterday in a regulatory filing, will help the mortgage giant to account for about $8 billion in manufactured home loans — mostly mortgages on mobile homes — and $300 million in aircraft leases.
A&A

SEC Files Civil Fraud Charges Against PIMCO

The Securities and Exchange Commission today filed civil fraud charges in federal court against PIMCO Advisors Fund Management LLC (PAFM), PEA Capital LLC (PEA), PIMCO Advisors Distributors LLC (PAD), Stephen J. Treadway, the chief executive officer of PAFM and PAD as well as the chairman of the board of trustees for the PIMCO Funds: Multi-Manager Series, and Kenneth W. Corba, PEA's former CEO, for their defrauding of PIMCO mutual fund investors, in connection with an undisclosed market timing arrangement with Canary Capital Partners LLC.
Tax

Skilling Ordered to Avoid Alcohol, Given Curfew

Facing more than three dozen counts of fraud and other crimes related to Enron’s 2001 collapse, Jeffrey Skilling has now been ordered to quit drinking, told to enter a rehab program and given a curfew by a federal judge.Skilling, 50, and his wife were involved in an April 9 melee in New York City, during which he accused other bar patrons of being FBI agents, attempted to pull the license plate off a car and lifted the shirt of a woman to see if she was wearing a wire.
Community News

Arizona Firm Fails PCAOB Inspection

The Public Company Accounting Oversight Board (PCAOB), created by the Sarbanes-Oxley Act of 2002, has rejected an Arizona audit firm’s application to audit publicly traded companies, the Washington Post reported.As part of its charge to clean up the accounting industry after a spate of scandals rocked the profession, the PCAOB conducts regular inspections of firms that audit public companies. James C.
A&A

Vanguard’s Founder Calls For Better Fund Governance, Highlights Nine Emerging Issues

In a speech before the Mutual Fund Regulation and Compliance Conference entitled, "Mutual Funds in the Coming Century ... While We're At It, Let's Build A Better World," John Bogle called on the mutual fund industry to heed the Investment Company Act of 1940, which requires that mutual funds be managed in the interest of the fund shareholders, and not in the interest of their managers. Mr.
Community News

Oxley Covers SOX, Stock Options and Mutual Fund Issues

It’s been two years since Congress passed sweeping reform legislation intended to clean up corporate accounting and stem the wave of fraud that swept through corporate America. Now one of the Sarbanes-Oxley Act sponsors wants to know if the legislation is working as intended.Rep.
Practice Management

‘Controlled’ Companies Taking Advantage of Loophole

By calling themselves "controlled" corporations, dozens of companies are dodging rules created to make corporate boards more isolated from management, the Wall Street Journal reported.Companies that have filed with the Securities and Exchange Commission saying that a majority of their board members will not be independent include Cox Communications, EchoStar Communications Corp. and Weight Watchers International Inc., the Journal reported. Another avenue around the new rules involves companies that are not forming independent compensation committees to oversee executive pay.
A&A

Google IPO Sparks Excitement among Investors, Wall Streeters

First Google became a verb: Have you goggled today?

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