SEC

Tax

College 529 Plans Under Scrutiny, SEC Says Fees Paid May Offset Tax Benefits

Rep. Michael Oxley, a co-sponsor of the 2002 Sarbanes-Oxley accounting industry reform legislation, has set his sights now on what he calls high fees parents pay to save for college through state-run 529 plans.Bloomberg reported this week that Oxley, chairman of the House Financial Services Committee, said he may call for hearings on the regulation of 529 plans since they involve "perhaps one of the most important decisions a parent has to make -- that is, creating enough capital for their kids"' to go to college.
Tax

Bank of America to Pay $375 Million, Exit Mutual Fund Clearing Business

The Securities and Exchange Commission announced a settlement agreement in principle with Bank of America of securities fraud charges arising from arrangements to permit timing in certain Nations Funds mutual funds and for facilitating market timing and late trading by certain customers. The agreement in principle is subject to the approval by the Commission. Bank of America has agreed to pay a total of $375 million, consisting of $250 million in disgorgement and $125 million in penalties.
Community News

SEC Votes To Adopt Additional 8-K Requirements

The U.S. Securities and Exchange Commission today voted to publish for comment proposed amendments to Form 20-F, to adopt additional reporting requirements on Form 8-K and to publish for comment proposed disclosure requirements for portfolio managers of mutual funds and other registered management investment companies.1.

Companies Rush to Clean up Old Mistakes

U.S. companies are hurriedly correcting financial statements and restating earnings in a "get-tough" regulatory environment that shows no signs of letting up.As the Securities and Exchange Commission takes a more critical look at how public companies come up with their numbers, accounting experts say that internal auditors are getting tougher, too.Reuters Research announced at least 60 cases this year in which companies have made earnings revisions or clarified financial reports at the request of regulators.
Community News

SEC Proposes Some Relief for Companies Adopting New IAS

In an effort to provide some relief to non-U.S.

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.

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