SEC

Bank of America to Pay Record Fine for Failing to Cooperate with SEC

Proving that the in the new post-Enron environment, the Securities and Exchange Commission has no patience for stonewalling, the SEC said Wednesday that the Bank of America Corp.
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.

SEC to Scrutinize Companies Doing Business in Rogue Nations

The Securities and Exchange Commission is looking to hire five full-time staff members to take a hard look at companies with ties to rogue nations.The staff will work for the new Office of Global Security Risk, the Wall Street Journal reported. Congress, in its fiscal 2004 funding bill, required the SEC to identify companies operating in countries linked to terrorists and provide investors with information about the activities.The idea is to help investors who don’t want their money tied to companies that do business in countries that sponsor terrorists or violate human rights.
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.
Tax

Federal Prosecutors Issue Subpoenas in Coke Fraud Case

The Coca-Cola Co.
Tax

Treasury and IRS Issue Guidance on 'Swaps'

Earlier this week the Treasury Department and the IRS issued proposed regulations regarding the taxation of contingent nonperiodic payments with respect to notional principal contracts (NPCs). These contracts consist mainly of those transactions referred to in the financial marketplace as "swaps." Existing final regulations state that the income or deduction for a nonperiodic payment must be recognized by a party to the NPC in an economic manner over the full term of the NPC.
Community News

SEC Extends Sarbanes-Oxley Section 404 Compliance Dates

On Wednesday, the Securities and Exchange Commission announced that it has extended the deadline for compliance with section 404 of the Sarbanes-Oxley Act of 2002. Compliance was initially set to be reflected in annual reports ending on or after June 15, 2004, but has been pushed to November 15 2004 for "accelerated filers." According to the SEC press release, under the new compliance schedule, a company that is an "accelerated filer" as defined in Exchange Act Rule 12b-2 (generally, a U.S.
A&A

SEC Proposes Mandatory Redemption Fees for Mutual Fund Securities

The Commission voted this week to propose new Rule 22c-2 under the Investment Company Act of 1940. Redemption FeeThe rule would require all mutual funds to impose a 2 percent fee on the redemption proceeds of shares redeemed within 5 days of their purchase. The fund itself would retain the proceeds from the redemption fees. The rule is designed to require short-term shareholders to reimburse the fund for the direct and indirect costs that the fund pays to redeem these investors’ shares. In the past, these costs generally have been borne by the fund and its long-term shareholders.
Tax

SEC Files Civil Fraud Case Against Columbia Management Advisors, Inc.

The Securities and Exchange Commission filed a civil fraud action this week in federal court in Boston alleging that Columbia Management Advisors, Inc. and Columbia Funds Distributor Inc. allowed certain preferred mutual fund customers to engage in short-term and excessive trading, while at the same time representing publicly that it prohibited such trading. Columbia Management Advisors, Inc.

NYSE’s Thain Defends Trade-Through Rule, SEC Ruling Expected Soon

As the speed versus price debate continues within the Securities and Exchange Commission, the New York Stock Exchange’s new chief executive John Thain has spoken out in support of the specialist system and current practices that put price before speed. The SEC could rule as soon as this week about whether or not to change the trade-through rule, which requires securities traders to find investors the best price even if it is available on a competing exchange.
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.
A&A

Regulators, Specialists Reach Tentative Agreement

The New York Stock Exchange's five largest "specialist" firms reached a preliminary agreement Tuesday to pay about $240 million to settle a civil case claiming they failed to oversee traders who improperly traded ahead of their customers, The Wall Street Journal reported.The Journal reported that the deal could still unravel at the 11th hour, but if it stands, it would represent the biggest fine involving Big Board specialists ever.

In Need of Cash, Goodyear to Sell $650 Million in Bonds

A day after Goodyear announced that an informal SEC probe into accounting irregularities within the company had turned formal, the tire-maker also said it plans to sell $650 million in bonds through a private offering in what some say is a desperate attempt to raise cash.Goodyear is apparently in dire need of new financing, according to the Wall Street Journal, which reported the company has $1.9 billion in debt that will mature next year with another $1.3 billion maturing in 2006.

Global Accounting Standards Mired in Dispute

The lofty goal of one world: one set of accounting standards remains just out of reach as three major players in the world economy grapple over some major sticking points.The European Union is insisting that Japan use international accounting standards rather than Japan’s generally accepted accounting principles (GAAP) if Japanese companies want to list in Europe in 2005, Dow Jones Newswires reported.

Europe Looks to SEC as Regulatory Model in Light of Scandals

The European Parliament believes business and finance needs to be regulated across Europe rather than on a country-by-country basis.In an overwhelming vote Thursday, the European Parliament recommended creating a regulatory body similar to the Securities and Exchange Commission in the U.S., the Wall Street Journal reported. The way it works now, individual European countries write laws and implement them, but in light of the massive accounting scandal centering on Parmalat, the fallen Italian food giant, Parliament recommended a new course of action.
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.

SEC Votes for Clearer Mutual Fund Cost Information

The Securities and Exchange Commission will require more frequent and more understandable reports on mutual fund costs and fund holdings under new rules approved Wednesday.The SEC agreed unanimously to require fund companies to provide semiannual reports to shareholders showing expenses in dollar terms, based on a $1,000 investment, the Wall Street Journal reported. To help investors compare costs of different funds, reports will also have to include cost figures adjusted for a hypothetical, 5 percent annual return.

Companies Finding SOX Compliance Expensive Speak Out

Accountability is expensive.
Tax

Proposed SEC Budget Would Increase Funding by 13 Percent

President Bush’s budget for next year mirrors the headlines of the day in that only Defense, Homeland Security and the Securities and Exchange Commission would see any significant increase in their budgets.The SEC has seen its workload expand significantly over the last year as it has taken civil action in cases related to Enron and WorldCom as well as conflicts of interest in a number of investment companies and trading irregularities/marketing issues in mutual funds, the Associated Press reported.

SEC Considering Changes to Best-Price Rule

The Securities and Exchange Commission may require that the New York Stock Exchange revise the rule that forces markets to get investors the best price, even if it means they have to go to a competing market to get it, the Wall Street Journal reported.

Pages