By Porter Wright on On Friday, September 9, the Department of Justice announced that it had entered into a Non-Prosecution Agreement with CSK Auto Corporation, a retailer of automotive parts and accessories which used to be publicly traded, to settle a criminal investigation into alleged securities law violations stemming from a corporate earnings manipulation and double-billing scheme. Under the … Continue Reading
By Porter Wright on On August 30, 2011, the SEC announced it had settled a case with James O’Leary, the former CFO of Beazer Homes USA under Section 304 of the Sarbanes-Oxley Act. Section 304’s "clawback" provision requires the reimbursement of compensation from executives under certain circumstances when their companies were in material non-compliance of financial reporting requirements due … Continue Reading
By Porter Wright on On Monday, August 1, 2011, the SEC filed suit against eight defendants for making false statements in public filings regarding the status of the human clinical trials for the drug SF-1019 by Argyll Biotechnologies LLC. The statements did not disclose that the Food and Drug Administration had issued clinical holds on testing for the drug, … Continue Reading
By Porter Wright on The SEC’s Commissioners have rejected a proposed settlement to "claw back" a portion of the bonuses and stock sale profits a former CEO received during a period of accounting fraud. The SEC had previously described the case as the first clawback case under the Sarbanes-Oxley Act against an individual who was not alleged to have … Continue Reading
By Porter Wright on On June 30, 2011, Lee Farkas, the former Chairman of Taylor Bean & Whitaker ("TBW"), was sentenced to 30 years in prison for his role the failure of his company and of Colonial Bank. While the sentence fell short of the Government’s request for a sentence of 385 years, it is likely that the 58-year old … Continue Reading
By Porter Wright on On Tuesday, April 19, 2011, in one of the first criminal trials arising out of the market crisis, a federal jury in Alexandria, Virginia convicted Lee Farkas of: one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. … Continue Reading
By Porter Wright on In a recent national survey of CFOs and senior comptrollers conducted by Grant Thornton, over 75% of respondents said the SEC should revise Form 8-K rules to require reasons for all company dismissals of auditors, for all auditor resignations, and for all instances in which the auditor chooses not to stand for reappointment. The results … Continue Reading
By Porter Wright on The SEC is investigating misuse of a 10b5-1 trading plan by Countrywide Financial Corp CEO, Angelo Mozilo, and securities experts continue to predict that such misuse will be the next big securities scandal. 10b5-1 trading plans allow executives to trade stock without worrying about trading on material, nonpublic information, also known as insider trading. The … Continue Reading
By Porter Wright on Yesterday, ISS blogged about Booz Allen Hamilton’s annual CEO succession study, which reported several interesting findings that I also think are worth sharing. The study, which is based on the world’s 2,500 largest public companies concludes that the imperial CEO has been replaced by the inclusive CEO, as reported in the press release on the study … Continue Reading
