SEC

SEC Says Homestore's 'Round-Trips' Were Fraudulent

The U.S. Securities and Exchange Commission (SEC) filed charges against three former executives of Homestore Inc. for arranging fraudulent "round-trip" barter transactions involving online advertising. The SEC's complaint explains that online advertisements were a major source of revenue for Homestore, and that the company engaged in sham transactions related to advertising to meet Wall Street estimates.

SEC Explores Creative Approach to Corporate Accountability

In a speech to the Council of Institutional Investors, Securities and Exchange Commission Chairman Harvey Pitt introduced a new and creative approach to accounting reforms. He called on these major shareholders to exert their influence in constructive ways to help improve corporate accountability. "After all, institutional investors are really just large agglomerations of regular folks," explained Chairman Pitt. "People who choose to invest their money in the same mutual fund ...
Practice Management

Kmart's CFO Steps up to Accounting Questions

Bankrupt retailer Kmart explained the impact of accounting irregularities in a Form 10-Q filed with the U.S. Securities and Exchange Commission (SEC) this week. Chief Financial Officer Al Koch said several employees involved in questionable accounting practices are no longer with the company.Speaking to the concerns about vendor allowances recently raised in anonymous letters from in-house accountants, Mr.

SEC Fills Opening For Deputy Chief Accountant

The U.S. Securities and Exchange Commission named former Andersen partner Scott A. Taub to serve as Deputy Chief Accountant for the Commission. In his new position, Mr. Taub will share with Jackson M. Day responsibilities for the day-to-day operations of the Office of the Chief Accountant, including resolution of accounting and auditing practice issues, rulemaking projects and oversight of private sector standard-setting efforts, and regulation of auditors.Mr.
Practice Management

GE's Ex-CEO Gives Up Perks as SEC Opens Inquiry

In the latest ripple effect of the recent wave of accounting scandals, Jack Welch, former CEO of General Electric, asked GE to take back some retirement perks made public in his recent divorce proceeding. Separately, the company received word of an inquiry into the matter by the U.S. Securities and Exchange Commission (SEC).

SEC Charges Former Tyco Officers With Fraud

The U.S. Securities and Exchange Commission (SEC) has filed fraud charges against three former officers of Tyco International. Due to the nature of some of the violations cited, the enforcement action became known as "a looting case." Other charges include financial reporting violations and lying to the company's auditor, PicewaterhouseCoopers.The former officers named in the complaint are the CEO, CFO and general counsel.

SEC Narrows Search For Chair of New Oversight Board

The U.S. Securities and Exchange Commission (SEC) has been trying to recruit a chairman for the new accounting oversight board created under the Sarbanes-Oxley Act of 2002. But it hasn't been easy. Yesterday, the Washington Post reported that forerunner Paul Volcker has all but turned down the post.Mr. Volcker has many supporters who believe his reputation would help instill public confidence in the board. In addition to being a former Federal Reserve Chairman, Mr.

SEC Sues CEO for Falsifying 80% of Company's Revenues

The U.S. Securities and Exchange Commission filed a complaint against the former president, chairman and CEO of HPL Technologies, charging him with fabricating over 80% of the company's reported revenues for fiscal 2002.According to the complaint, the CEO began his fraud in anticipation of HPL's initial public offering in July 2001.
Practice Management

SEC Settles with Ex-Officers of Sunbeam Corporation

The U.S. Securities and Exchange Commission (SEC) announced the settlement of charges against former officers of Sunbeam Corporation. The company's former CEO and CFO agreed to pay civil penalties and are permanently barred from serving as officers or directors of any public company.

SEC Agrees to Phase in Faster And Fuller Reporting Rules

In its first rule-making session this year with a full complement of five commissioners, the Securities and Exchange Commission (SEC) agreed to expand and accelerate the reporting requirements for large public companies. Smaller companies caught a break. The SEC decided to phase in certain requirements over time and according to the size of the company, thereby allowing smaller companies to grow into the faster and fuller reporting requirements.
Practice Management

SEC OKs 98% of U.S. Oaths - Europeans Prepare to Swear

The Securities and Exchange Commission (SEC) announced the final results of the corporate certifications due by August 14, 2002.

Some Companies Unable to Meet SEC Attestation Requirement

Last week's deadline came and went. Nine hundred forty-seven companies were asked by the Securities and Exchange Commission (SEC) to provide CEO/CFO certification of their financial statements by 5:30 p.m. EST Wednesday, August 14. Although a few stragglers have yet to be checked off the list as either complying with the SEC request or being unable to comply, most of the companies have turned in their sworn statements attesting to the accuracy of the firm's financial statements.To date, 12 companies have indicated they are unable to comply with the order.

SEC Deadline Passes Quietly - Accounting Jitters Subside

Investors breathed a collective sigh of relief when the markets closed up on August 14, 2002 on preliminary indications the vast majority of companies had met an important deadline set by the Securities and Exchange Commission. The SEC had given CEOs and CFOs of designated large companies until the end of the day to swear to the accuracy of their companies' financial results, and many waited until the very last minute. The SEC is still sifting through the last-minute deluge and publicly tagging statements that are inconsistent with the standard SEC format.

Markets and Credit Agencies Brace for SEC Deadline

Today is the deadline set by the Securities and Exchange Commission (SEC) for CEOs of 745 major public companies to certify the accuracy of their companies' financial statements. So far, fears of a wave of restatements have not materialized.

Warning Sign: Companies Narrowly Meeting Expectations

The Securities and Exchange Commission (SEC) is experimenting with a list of warning signs that may signal a need for additional investigation. These red flags include a pattern of narrowly meeting or exceeding the earnings estimates of securities analysts.Charles Niemeier, chief accountant of SEC's enforcement division, reportedly told the Wall Street Journal a company that consistently met earnings expectations would be of special interest to the SEC, if it also showed revenue increases while cash flow was falling.

SEC Blasted For Allowing IBM to Retain PwC as Auditor

Congressman Edward Markey blasted the Securities and Exchange Commission (SEC) for its "dead wrong" decision to allow IBM to keep PricewaterhouseCoopers as its auditor after the company completes its acquisition of PwC's consulting practice. Rep. Markey faulted the decision for being inconsistent with a decision previously made by the SEC that PwC's independence would be impaired if it continued to audit Hewlett-Packard after it was acquired by H-P.

Senate Confirms Two SEC Nominees With Accounting Ties

In a victory of sorts for the accounting profession, the Senate Banking Committee confirmed nominees with accounting ties for appointment as two of the four incoming Securities and Exchange Commissioners. But it was a bittersweet victory, showing that accounting firm experience is not the best credential to have these days, at least not for SEC hopefuls.

SEC Charges Adelphia, Founder With Fraud

The Securities and Exchange Commission (SEC) filed charges yesterday against Adelphia Communications Corporation, its founder, his three sons, and two senior executives. Earlier in the day, the founder and two sons were led from a Manhattan apartment building in handcuffs. The SEC's complaint charges that Adelphia fraudulently excluded billions of dollar of liabilities from its consolidated financial statements by hiding them on the books of off-balance sheet affiliates.

SEC Chairman Counsels Investors on Accounting Jitters

On Friday, July 19, 2002, as the Dow Jones industrial average plunged to its lowest level in almost four years, Harvey Pitt, chairman of the Securities and Exchange Commission (SEC), reassured investors with accounting jitters. The main reason for accounting jitters is the anticipation of another wave of corporate restatements before the August 14, 2002 deadline for corporate officers to personally certify their companies' reports.
Community News

PwC Settles Rash of Auditor-Independence Violations

The Securities and Exchange Commission (SEC) announced a settled enforcement action against PricewaterhouseCoopers (PwC) for another rash of alleged auditor-independence violations. The charges involve incidents that occurred between 1996 to 2001 and focus attention on a different set of rules than the violations for which PwC was censured in 1999. The most recent charges involve contingent fees and improper accounting for PwC's consulting fees.Contingent fees.

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