A specialty chemical company recently informed the Securities and Exchange Commission that it violated new rules prohibiting loans to executives. It also said a deficiency identified by its auditor caused the company’s disclosure controls and procedures not to be effective at a “reasonable assurance level.” Although the case involves a very small company, it provides […]
Stephen Taub
Posted inFrom the Archive
Severance Packages Starting To Come Under Attack
In one sense, it still looks like business as usual when it comes to executives hauling in huge severance packages. For example, Wallace D. Malone Jr., the chief executive officer of SouthTrust Corp., is entitled to $59 million in termination awards, stock awards, and options over the next five years if he leaves the Birmingham-based […]
Posted inFrom the Archive
Cumulative Voting Disappearing In Governance Trade-Off
Back in June, Energy East agreed to declassify its board of directors, thus ending the staggered terms. Was this yet another case of a company voluntarily practicing good governance in this Sarbanes-Oxley world? Sort of. Because while it declassified its board, at the same time the company discontinued its practice of allowing cumulative voting of […]
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Is Cox Trying to Avoid SOX?
Is Cox Enterprises’ plans to buy the shares of Cox Communications that it doesn’t presently own part of a growing trend among companies to go private since the Sarbanes-Oxley Act went into effect more than two years ago? In this case, probably not. Cox Enterprises said it would shell out $32 per share in cash—a […]
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Halliburton Is The Latest To Pay For Non-Cooperation
When Halliburton settled charges by the SEC that it changed its accounting method without notice, observers seemed most interested in the $7.5 million fine, or the fact that the dispute stemmed from the days when Vice President Dick Cheney ran the company. Overlooked was the fact that the company wasn’t fined for failure to disclose […]
Posted inBoards & Shareholders
Broadcom Agrees To Allow Shareholders Nominate Directors
The folks at law firm Lerach Coughlin Stoia & Robbins LLP last week appeared to have hammered out their most significant governance-related settlement with shareholders when it resolved litigation with Broadcom Corp. Under the agreement, Broadcom, a maker of chips for cable modems, will be one of only a select group of U.S. companies that […]
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Is It ‘Wait Until 2006’ For Option Expensing?
Is option expensing dead? Probably not. But, the Financial Accounting Standards Board’s proposed rule requiring all public companies to expense the value of stock options beginning Dec. 15 does seem somewhat in jeopardy after the House of Representatives voted to oppose most of the key FASB provisions. The bill would only require companies to deduct […]
Posted inRegulatory Enforcement
Did the SEC Reward Stand-By Systems For Cooperating?
Did the Securities and Exchange Commission let off the hook a company it had charged with wrongdoing because it cooperated with an investigation? It sure seems like it at first glance. Last week, the regulator announced that Judge Barefoot Sanders, United States District Judge for the Northern District of Texas, entered an order dismissing the […]
Posted inRegulatory Enforcement
Lerach Coughlin’s Robbins Plays Hardball With Governance Weapon
Applied Micro Circuits Corp. is the latest company to agree to corporate governance changes as part of an overall settlement of a shareholder lawsuit. The designer of microchips for optical networks was sued after it was accused of making a series of false statements during late 2000 and early 2001, which allegedly boosted its stock […]
Posted inRegulatory Enforcement
Why Would Siebel Challenge Reg. FD Charges?
When the Securities and Exchange Commission recently charged Siebel Systems with violating Regulation Fair Disclosure, the maker of business software enjoyed a couple of dubious firsts. For example, it was the first company to be charged for a Reg. FD violation for the second time. In addition, the Commission charged Siebel with violating Exchange Act […]