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Will Lord Black Be the Next to Try the “Honest-but-Ignorant CEO” Defense?
An article in Saturday’s Wall Street Journal (here — a nice addition to the weekend) discusses the possible response of former Hollinger International CEO Lord Conrad Black if the government indicts him for siphoning money from the company. In August, the U.S. Attorney’s Office for the Northern District of Illinois announced the indictment (press release…
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SEC Charges Former Fleming Cos. Executives with Accounting Fraud
The SEC filed a civil fraud complaint alleging that five former officers of food wholesaler Fleming Cos., Inc., engaged in accounting fraud to pump up the companies revenue and earnings in 2001, before its collapse into bankruptcy. Among those named in suit are Mark David Shapiro, the company’s former chief accounting officer, and Phil Murphy,…
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Former Illinois Governor’s Corruption Trial Scheduled to Begin
The trial of former Illinois Governor George Ryan and lobbyist Larry Warner is scheduled to begin Monday, Sept. 19, in U.S. District Court in Chicago, with the selection of the jury. Ryan is charged with RICO conspiracy, mail fraud, tax evasion, and lying to the FBI; his campaign committee and former chief of staff have…
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Former Atlanta Braves Pitcher Receives Jail Time
A former pitcher for the Atlanta Braves (Rick Camp) received a sentence of 37 months in prison "for conspiring to steal more than $2 million from a mental health agency." (see AP in Sports Illustrated here). The cast of characters in this case include a former state Representative (who received 10 years in prison) and…
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Will Deutsche Bank Get Sucked Into the Tax Shelter Investigation?
The fallout from the KPMG tax shelter business may now be reaching the firms that assisted in the execution of the transactions underlying the shelters. The New York Times reports (here) that Deutsche Bank has been sued for its role in one of the shelters that involved currency trading, and the government’s investigation of KPMG…
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Interpublic Group Discloses Substantial Accounting Problems
Interpublic Group of Companies, Inc., the international advertising agency, disclosed that it will not be able to file its 10-K annual report, and that it will have to restate its financials due to internal control problems and other accounting issues. More ominously, the company stated that some of its (now former) employees engaged in misconduct…
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Larry Ellison’s $100 Million “Charitable” Contribution to Resolve Insider Trading Claim
An earlier post (here) discussed the settlement by Oracle CEO Larry Ellison of a law suit in California alleging that he sold $900 million of Oracle stock while he was privy to information about declining earnings at the company that were announced only a month later, i.e. insider trading. Ellison has agreed to make $100…
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Attorney Sentenced to 18 Months for Contempt and Perjury
Providence, RI, attorney Joseph Bevilacqua received an 18-month prison term for leaking a government surveillance tape to a local television station, in violation of a court order sealing materials related to the case, during the prosecution of former Mayor Vincent (Buddy) Cianci and others. Bevilacqua represented one of the defendants in the case, and the…
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Are White Collar Crime Sentences Too Severe?
The sentencing of former Tyco CEO Dennis Kozlowski and CFO Mark Swartz is scheduled for Monday, Sept. 19 in New York Supreme Court before Judge Michael Obus. A New York Times article (here) raises the question whether sentences in white collar crime cases have become too severe, looking at the prison terms that Bernie Ebbers…
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The Same Refrain: Insider Trading By Company Employees
This is one we’ve heard before, yet somehow it just keeps happening. The SEC sued four employees of Cryolife, Inc., and two of their spouses, for selling shares in the company immediately before a product recall. Cryolife sells implantable human tissue, and the FDA ordered a nationwide recall of the company’s product. Before the news…
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