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Tag >> Enron
Sep 28
2010

Securitization: don't take it for granted

Posted by dbedell in SIVsecuritizationRiskRepo 105EnronDealsasset backedarbitrageABS

dbedell

Securitization, at its most basic, is a sound financing technique. This is my basic tenet for today’s blog. With the ABS markets again beginning to pick up, spreads tightening and investor demand growing but supply still limited, it is time for a revisit of just what makes this market so important from a corporate perspective, and why it is way-past time for stakeholders to get it right in rebuilding the market.

I am not here to argue the validity of the regulatory arbitrage that drove the market to such great heights before the crisis. In fact, that is most definitely one of the things that should be addressed as the new world of securitization takes shape. What I am here to argue is the validity and soundness of securitization at its most basic, as a financing structure for corporates.

Aug 17
2010

Punish shareholders for managers' sins? By all means

Posted by Ron F in Securities and Exchange CommissionSarbanes-OxleyRegulationfraudfinancial reportingfinancial crisisEnroncomplianceCitigroupAccounting

Ron F

Barry Ritholtz today usefully repeats a point he made earlier this month in connection with an Andrew Ross Sorkin column about the SEC's proposed settlement with Citigroup and the court's refusal to go along with it.

And that is that shareholders of companies run by corrupt management are supposed to be punished.

Jun 28
2010

Supreme Court strikes down part of Sarbanes-Oxley

Posted by Stephen Taub in WorldcomSarbanes OxleyPublic Company Accounting Oversight BoardPCAOBEnroncompliance

Stephen Taub

In a major, stunning, but not totally unexpected ruling, the Supreme Court struck down part of the Sarbanes-Oxley Act that was created in the aftermath of a rash of corporate scandals in the early 2000s.

The High Court ruled 5-to-4 that the Act violates the Constitution's separation of powers mandate since the president is unable to remove members of The Public Company Accounting Oversight Board, which was created to oversee the outside accounting firms that audit public companies.

Jun 09
2010

The Fed once again proves to be a regulatory pushover

Posted by Ron F in Timothy GeithnerRegulationObama Administrationfinancial market reformfinancial crisisFederal ReserveFederal Deposit Insurance Corp.FedEnroncomplianceBanksbanking reformbanking industryBanking

Ron F

Anyone who thinks the Federal Reserve ought to oversee systemic risk ought to take a close look at this article.

By now, of course, it's no surprise that banks used yet another financing gimmick to make their capital look stronger than it really was. This one, involving Trust Preferred Securities known as TruPS, is doubly gimmicky, in so far as it involves both hybrid securities (i.e., a have your cake and eat it combination of debt and equity) and off-balance-sheet treatment. In terms of magnitude and significance, this stuff makes Andy Fastow look like a piker. Then again, Enron violated the letter as well as the spirit of the accounting rules. The banks were smarter than Fastow in that respect, or at least their lawyers and lobbyists were.

Apr 23
2010

Financial innovation inevitably leads to crisis, says new research

Posted by Ron F in WorldcomTroubled Asset Relief ProgramRiskRegulationinnovationGoldman SachsFedEnroncomplianceBanksbanking reformBankingbank failuresbailout

Ron F

Paul Krugman's column today called my attention to a paper that anyone interested in financial reform should check out.

The paper completely contradicts the conventional wisdom that innovation in finance is a good thing.

Mar 26
2010

Securities class action settlements surged in 2009, down from high

Posted by Stephen Taub in WorldcomsettlementlawsuitsIPOEnron

Stephen Taub

The number and value of securities class action settlements rose last year. However, the figures are still way down from what they were several years ago.

According to Cornerstone Research, which keeps score and cosponsors the Stanford Law School Securities Class Action Clearinghouse, in 2009 there were 103 court-approved securities class action settlements, up slightly from 97 in 2008. However, the settlements in 2009 involved $3.8 bil­lion in total settlement funds, up 35 percent from the prior year.

Mar 25
2010

Oxley: SarbOx saved the financial meltdown from being worse

Posted by Going Concern in WorldcomSarbanes OxleyRegulationEnroncomplianceCFOsArthur AndersenAccounting

Going Concern

Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.

We really don't foresee any scenario where a politician would denounce a piece of legislation with his/her name on it but since the mainstream media has the tendency to bludgeon the Enron/Andersen/Sarbanes-Oxley mantra into everyone's gray matter, Ox figured he'd better get on record saying that SOx might be the most important moment in US history since the Louisiana Purchase.

Mar 24
2010

Where's the CFO perp walk?

Posted by nicklord in WorldomsecSarbanes OxleyHSZEnronCLSA

nicklord

 

One thing is missing from this downturn that was present in so many previous downturns: the CFO perp walk. Post Worldcom and Enron, it was corporate officers who were hauled off to jail. In the 1980s in Europe it was crooked corporate bosses in companies such as Polly Peck and Guinness who were detained ‘at her majesty's pleasure'. But this downturn, CFOs can take a breather, for it is the bankers, financiers and hedge fund managers who are taking the heat.

Mar 20
2010

Another call to ban naked swaps

Posted by Ron F in RiskRegulationLehman BrothersFederal ReserveEnronderivativesdebtcredit-default swapcomplianceBanksBankingbank failuresbalance sheets

Ron F

We've been harping on the need to curb the use of credit default swaps for speculative purposes for some time. And after Congress briefly entertained the idea of banning naked swaps, those, that is, where neither the buyer or seller owns the debt of the reference entity and thus has an insurable interest in it, the idea is enjoying something of a comeback.

Not that we had anything to do with that. Instead, that was Goldman Sachs' doing, since the interest rate swaps the firm sold Greece to hide much of it debt has led to a huge amount of speculation through naked credit default swaps against that debt, and made it more difficult for the country to raise fresh capital to stem its financial crisis, thereby endangering the European Union.

Mar 05
2010

Jealousy, greed tore apart Arthur Andersen, says former CEO

Posted by Going Concern in RiskmanagementEnronconsultingcomplianceArthur AndersenAccounting

Going Concern

Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.

Retired Andersen CEO and Managing Partner, Duane Kullberg was part of a panel discussion that went on at Carthage College in Kenosha, Wisconsin this week where he was the featured speak on the "The Rise and Fall of Arthur Andersen".Kullberg was part of a panel that included our friend Jim Peterson of Re:Balance and Bill Goodman, President of Schneck SC, a firm with offices throughout Wisconsin that also discussed the future of the audit profession.

Kullberg served as the Andersen CEO from 1980 to 1989 but "the profit-driven company culture in the 1990s, that valued sales more highly than the ethically rigorous auditing practices that built the accounting firm," was ultimately brought the firm down.

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