In a recent administrative settlement involving an issuer that is not subject to the registration and reporting provisions of federal securities laws, the Securities and Exchange Commission raised eyebrows by premising its action, in part, on a weaknesses in internal controls. The case, settled in August, involved a so-called “Section 529” college savings plan, which […]
Martinek Paul J.
Posted inAccounting & Auditing
Deloitte U.K Probe Highlights Differing Non-Audit Regs.
Last week, a British government oversight board announced that it is investigating services that a United Kingdom division of Deloitte and Touche provided to failed automaker MG Rover. The probe highlights differences between the regulation of non-audit services in the U.K. and the United States, and demonstrates how foreign auditors can be subject to the […]
Posted inFrom the Archive
Customs Violations Can Have Consequences Under SOX
Fines totaling $20 million that were issued last month against Ford Motor Co. for violating federal customs laws highlight the need for companies that import goods to be aware of potential consequences under the Sarbanes-Oxley Act of being lax in their customs compliance. Although the conduct by Ford that was the subject of the two […]
Posted inInternal Controls
Companies Slow To Report Changes To Financial Systems
In filing a 10-Q last week, video giant Blockbuster became one of only a handful of companies to date to tell the Securities and Exchange Commission about a change to internal control over financial reporting regarding an upgrade to financial systems. Blockbuster informed the Commission that it had recently “implemented PeopleSoft Financial Modules, a new […]
Posted inRegulatory Enforcement
SEC Amends Rules To Protect Short-Swing Profits
The Securities and Exchange Commission has amended its rules on short-swing dealings by officers and directors to make clear that profits made from certain merger and acquisition transactions are exempt from restrictions on insider profit-making. The SEC’s actions come in the wake of a court decision by the Philadelphia-based 3rd Circuit two years ago limiting […]
Posted inFrom the Archive
‘Disclaimed Opinions’ Impact Analysts More Than SEC
An auditor’s issuance of a “disclaimed opinion” on Section 404 of The Sarbanes-Oxley Act of 2002—in which the accounting firm reports that it is unable to express an opinion regarding a company’s internal control over financial reporting—may have an impact on market analysts, but it probably won’t get much attention from the Securities and Exchange […]
Posted inFrom the Archive
New Delisting Rules Precursor To Deregistration Proposals
The Securities and Exchange Commission last month adopted new rules that simplify procedures for delisting from the New York Stock Exchange and the American Stock Exchange. But those rules are just a precursor to rules expected to be proposed in the comings months that are eagerly anticipated by securities lawyers: ones that address the deregistration […]
Posted inFrom the Archive
SEC Improves Tracking Of Environmental Disclosures
The Securities and Exchange Commission has fully complied with recommendations made a year ago by the Government Accountability Office to improve the way the Commission tracks environmental disclosures from public companies. Michèle Corash, a partner at Morrison & Foerster in San Francisco, tells Compliance Week that the SEC’s initiatives to increase the tracking and transparency […]
Posted inFrom the Archive
Plaintiffs’ Bar Emboldened On Compensation Disclosure
With plaintiffs’ lawyers increasingly bringing litigation challenging the adequacy and accuracy of statements concerning executive compensation, companies need to be much more careful in what they say about that compensation, experts tell Compliance Week. Michael Melbinger, a partner with Winston & Strawn in Chicago, says plaintiffs’ lawyers have been “emboldened” by the fact that “courts […]
Posted inFrom the Archive
Cases Raise Questions About Forward-Looking Statements
Adecision this month by a federal court in Boston, and the U.S. Supreme Court’s recent refusal to hear an appeal of a case from Chicago, underscore the importance of drafting forward-looking statements to make sure they will be protected by the “safe harbor” provision in the Private Securities Litigation Reform Act of 1996. Under the […]